Through Minister of Finance Regulation No. 28 of 2026 on Procedures for Preliminary Refund of Tax Overpayments (MoF 28/2026), the government offers streamlined Value Added Tax (VAT) refund mechanisms for Low-Risk Taxable Entrepreneurs (PKP).
Under this scheme, eligible PKPs can receive VAT overpayment refunds without waiting for a comprehensive tax audit to conclude. This policy is designed to expedite tax services while safeguarding corporate cash flow—particularly for businesses that regularly experience VAT overpayments due to export activities or specific transactions.
While offering a faster timeline, this facility is strictly available to PKPs that meet the administrative requirements and eligibility criteria set out under MoF 28/2026.
Categories of Low-Risk PKPs Eligible for Accelerated VAT Refunds
Under Article 13 of MoF 28/2026, several categories of taxpayers can be designated as Low-Risk PKPs and qualify for preliminary VAT refunds:
- Publicly Listed Companies
Companies whose shares are listed and traded on the Indonesia Stock Exchange (IDX) can obtain Low-Risk PKP status.
- State-Owned and Regionally Owned Enterprises
State-Owned Enterprises (BUMN) and Regionally Owned Enterprises (BUMD) that comply with relevant regulations are eligible for this expedited refund facility.
- Main Customs Partners
Companies holding Main Customs Partner (MITA) status are recognized for high compliance levels, granting them access to this scheme.
- Authorized Economic Operators (AEO)
PKPs certified as Authorized Economic Operators (AEO) qualify as Low-Risk PKPs.
- Manufacturing Companies
Manufacturers or producers operating their own production facilities are also eligible for streamlined refunds.
- Wholesale Pharmaceutical Distributors
Pharmaceutical distributors holding the requisite licenses and distribution certifications in accordance with regulations may apply through this process.
- Medical Device Distributors
Distributors of medical devices holding proper business licenses and Good Distribution Practice certificates for medical devices fall into the Low-Risk PKP category.
- Subsidiaries of State-Owned Enterprises
Companies in which a State-Owned Enterprise directly holds a majority stake exceeding 50% are also eligible for this status.
Eligible Business Activities
Beyond meeting the entity categories above, a PKP must engage in specific business activities to utilize the expedited refund facility:
- Export of tangible Taxable Goods (BKP);
- Export of intangible Taxable Goods (BKP);
- Export of Taxable Services (JKP);
- Deliveries of Taxable Goods and/or Services to designated VAT Collectors; and
- Deliveries where VAT is non-collected under applicable tax laws.
These requirements indicate that expedited refunds are prioritized for PKPs with well-documented transactions that are easily verifiable by the Directorate General of Taxes (DGT).
Formal Administrative Verification Before Processing
Refund requests are submitted by checking the preliminary refund box on the Periodic VAT Return.
Upon receipt of the application, the DGT conducts an administrative review to confirm full compliance. Key verification checkpoints include:
- Valid Low-Risk PKP status at the time of application;
- On-time filing of Periodic VAT Returns over the past 12 months;
- No ongoing tax audit for the tax period in question;
- No pending preliminary evidence examination or criminal tax investigation; and
- No criminal tax convictions by a final and binding court judgment within the last five years.
Once all formal requirements are satisfied, the DGT proceeds to examine the substance of the refund claim.
Critical Technical Requirements for PKPs
In addition to administrative criteria, MoF 28/2026 establishes technical thresholds that form the foundation of the DGT’s assessment.
Specifically, at least 80 percent of the total turnover from deliveries and exports must stem from qualifying business activities eligible for preliminary refunds. This threshold calculation covers:
- Deliveries of BKP and/or JKP to VAT Collectors;
- Non-collected VAT deliveries;
- Export of tangible BKP;
- Export of intangible BKP; and
- Export of Taxable Services (JKP).
Conversely, VAT-exempt deliveries and non-vatable transactions are excluded from this minimum threshold calculation.
Furthermore, the DGT will verify that all credited Input VAT strictly adheres to administrative standards and is validated in the tax database. Any Input VAT failing to meet these standards will be excluded from the refund base.
Processing Timeline for Accelerated VAT Refunds
If the administrative review confirms that all requirements are met, the DGT will issue a Decision Letter on Preliminary Tax Overpayment Refund (SKPPKP) no later than one month from the application receipt date.
If no decision or rejection notice is issued within this timeframe, the application is deemed approved by law.
In certain cases, the approved refund amount may differ from the claimed amount. Should a discrepancy occur, the PKP remains entitled to apply for the unrefunded balance, provided the DGT has not commenced a full tax audit and the application is lodged within the regulatory deadline.
Conclusion
MoF 28/2026 provides clarity and certainty regarding accelerated VAT refunds for eligible Low-Risk PKPs. By granting preliminary overpayment refunds, this framework allows compliant businesses to bypass lengthy full tax audits, protecting corporate cash flow and liquidity.
To leverage this facility effectively, taxpayers must maintain their Low-Risk PKP status, ensure their operational activities fall within eligible categories, and consistently meet all tax compliance obligations. Accurate VAT return filings, valid tax invoices, properly credited Input VAT, and robust supporting documentation remain critical to navigating the DGT’s verification process smoothly.
