Office or Field Audits? Here Are the Criteria for Targeted Taxpayers

JAKARTA, DDTCNews – An audit to assess compliance with the fulfilment of tax obligations is conducted in a field audit or office audit according to the conditions or criteria of the taxpayer being audited. 

Referring to Article 4 of the Minister of Finance Regulation (MoF Reg.) No. 17/2013 as last amended by MoF Reg. 18/2021, there are 10 criteria for taxpayers who can be tested for compliance with tax obligations.

“The audit to assess compliance with the fulfilment of tax obligations … is conducted in a field audit or office audit,” reads Article 5 paragraph (1) of MoF Reg. 17/2013 as last amended by MoF Reg. 18/2021, quoted on Thursday. (26/10/2023).

For a taxpayer applying for tax refunds as referred to in Article 17B of the General Provisions and Tax Procedures Law (GPTP Law), audits are conducted using office audits insofar as the taxpayer fulfils two requirements.

First, the taxpayer's financial statement for the audited tax year is audited by a public accountant or the financial statement of one of the tax years of the two tax years before the audited tax year has been audited by a public accountant with an unqualified opinion.

Second, the taxpayer is not being subject to preliminary audits, investigations or tax crime prosecution and/or the taxpayer in the last five years has never been sentenced for a tax crime.

Next, the taxpayer that has concrete data resulting in the tax payable being unpaid or underpaid is audited using an office audit.

Further, audits with the taxpayer criteria referred to in Article 4 paragraph (1) subparagraph c to subparagraph g and subparagraph j of MoF Reg. 17/2013 as last amended by MoF Reg. 18/2021 are conducted using office audits or field audits.

Taxpayers that do not file or file the tax return but past the period specified in the reprimand letter selected to be audited based on the risk analysis shall be audited using field audits.

Field audits also apply to taxpayers filing tax returns selected to be audited based on risk analysis.

In the event that in an office audit, indications of transactions related to transfer pricing and/or other special transactions are found indicating the existence of manipulation of financial transactions, the implementation of the office audit is changed to a field audit. (rig)