DGT Limits Applications for Penalty Reduction to 2 Times
JAKARTA, DDTCNews – Taxpayers may apply for a reduction of administrative penalties (pengurangan sanksi administrasi/PSA in Indonesian) up to a maximum of 2 times. This limit applies in respect of a single notice of tax assessment (surat ketetapan pajak/SKP in Indonesian) or notice of tax collection (surat tagihan pajak/STP in Indonesian).
Nevertheless, the opportunity to resubmit a PSA application in respect of the same notice of tax collection or notice of tax assessment is not available without restriction. Pursuant to the provisions under MoF Reg. 118/2024, as amended by MoF Reg. 71/2026, a taxpayer may submit such an application no later than 3 months from the date on which the decision letter on the first application was sent.
"...The application shall be submitted within a maximum period of 3 months from the date the director general of taxes decision letter for the first application is delivered unless the taxpayer can show that the period cannot be fulfilled due to circumstances beyond the taxpayer’s contro," reads an excerpt from Article 24 paragraph (3) of MoF Reg. 118/2024, as cited on Monday (9/11/2026).
Accordingly, once a decision has been issued on the first application, the taxpayer still has the opportunity to submit a second application. This opportunity also applies where the previous decision rejected the taxpayer's application.
As with the first application, the second application must likewise satisfy the prescribed requirements. Those requirements refer to the provisions of Article 23 paragraph (2), paragraph (3) and paragraph (5) of MoF Reg. 118/2024, as amended by MoF Reg. 71/2026. See Applications for Penalty Reduction in an STP: General Requirements
It should be noted that the count of opportunities is calculated on the basis of PSA applications that have received a decision. Meanwhile, a PSA application that is returned for failure to fulfil formal requirements does not count towards the two-application limit.
For information, pursuant to Article 29 paragraph (1) of MoF Reg.118/2024, the director general of taxes must issue a decision on an application for reduction/nullification of administrative penalties no later than 6 months from the date the application for reduction/nullification of administrative penalties is received.
The decision may take the form of: (i) full approval; (ii) partial approval; or (iii) rejection. The decision is made on the basis of examination results stipulated under MoF Reg. 118/2024, as amended by MoF Reg. 71/2026 and KEP-239/PJ/2026.
On the other hand, the director general of taxes may also return a PSA application. Such a return is conducted when the application does not fulfil the formal requirements. In this circumstance, the taxpayer will be issued a return letter rather than a decision letter. See PSA Application Requirements Incomplete? DGT Will Return the Application (dik)