A foreign-owned company that receives an SP2DK in Indonesia should identify the discrepancy raised by the Directorate General of Taxes (DGT), reconcile the DGT’s data against its Indonesian tax returns and underlying transactions, determine whether the position already reported can be substantiated or requires correction, and submit its response within the applicable Indonesian procedure.
An SP2DK (Surat Permintaan Penjelasan atas Data dan/atau Keterangan) is a formal request from the DGT for clarification of tax data or information. It is not, by itself, a tax assessment or a determination that additional tax is payable. Under Minister of Finance Regulation No. 111 of 2025 (PMK 111/2025), taxpayers generally have 14 days from the issuance of the SP2DK to respond.
Identify, Reconcile, and Determine the Company’s Tax Position
The starting point is the data identified in the SP2DK. The company needs to determine which tax period, tax obligation, transaction, and amount the DGT is questioning and then trace the discrepancy through its Indonesian tax filings and accounting records.
Facing an SP2DK? Contact MAP Resources Indonesia at info@mapresourcesindonesia.com for support with your response.
The reconciliation should follow the specific discrepancy rather than begin with a general review of the company’s entire tax position. If the SP2DK questions revenue, for example, the company should trace the DGT figure against the relevant annual corporate income tax return, financial statements, general ledger, invoices, and transaction records. If the issue concerns withholding tax, the analysis should instead trace the underlying payment, applicable withholding treatment, tax filing, and payment evidence.
This is particularly important because DGT supervision can compare taxpayers’ reported information with data from other sources. Differences between those datasets may prompt the DGT to seek clarification through an SP2DK.
A useful sequence is:
DGT data → Indonesian tax return → accounting entry → underlying transaction → supporting document → tax treatment
Consider an Indonesian subsidiary whose SP2DK identifies IDR 2 billion (USD 111,000) of revenue as potentially unreported. The company should not automatically treat the entire IDR 2 billion as additional taxable income. If its reconciliation establishes that IDR 1.5 billion (USD 83,000) was already recognized but appears differently because of timing or classification, while IDR 500 million (USD 28,000) was genuinely omitted, the response should distinguish between the amount that can be substantiated and the amount requiring correction.
Once the reconciliation is complete, the company should determine whether the tax position originally reported remains supportable. Where the underlying transactions and applicable Indonesian tax treatment support the filing, the response should substantiate that position with the relevant records. Where the review identifies an error, the company should determine which tax return is affected, quantify the resulting exposure, and assess whether a correction and additional payment are required.
Examine Indonesian Tax Exposure on Cross-Border and Related-Party Transactions
For a foreign-owned company, the discrepancy may involve transactions between the Indonesian entity and its overseas parent, shareholder, regional headquarters, or another group company. These transactions can raise several Indonesian tax questions simultaneously.
An intercompany service or management fee, for example, may require the Indonesian company to substantiate the nature of the services, the basis for the charge, applicable withholding tax treatment, deductibility of the expense, and whether the pricing satisfies Indonesia’s transfer pricing requirements.
A royalty paid to an overseas-related party can similarly raise questions concerning the underlying intellectual property arrangement, withholding tax, any tax treaty position relied upon, and the arm’s-length amount of the payment. Intercompany financing can combine questions concerning the financing arrangement, interest expense, withholding tax, and transfer pricing.
Indonesia’s transfer pricing framework under PMK 172/2023 requires transactions influenced by related-party relationships to comply with the arm’s-length principle. The DGT is also authorized to test compliance with that principle and, where applicable, redetermine income or deductions.
PMK 172/2023 establishes specific thresholds for preparing master file and local file transfer pricing documentation. The requirement can apply where the taxpayer’s gross revenue in the preceding tax year exceeds IDR 50 billion (US$3.1 million). It can also apply where preceding-year related-party transactions exceed IDR 20 billion (US$1.2 million) for tangible goods, or IDR 5 billion (US$308,000) for each category of services, interest payments, use of intangible property, or other related-party transactions.
Need to assess your tax position? Speak with MAP Resources Indonesia at info@mapresourcesindonesia.com.
The thresholds are not the only trigger. Transactions with a related party located in a country or jurisdiction whose income tax rate is lower than the applicable Indonesian income tax rate can also trigger the documentation requirement irrespective of those transaction-value thresholds.
These thresholds determine when the relevant transfer pricing documentation must be prepared; they do not determine whether the arm’s-length principle applies. A taxpayer conducting transactions influenced by related-party relationships remains subject to the arm’s-length principle even where the documentation thresholds are not met.
An SP2DK concerning a related-party transaction should consequently not be treated solely as an accounting reconciliation. The company may need to demonstrate that the commercial arrangement, actual transaction, accounting treatment, withholding position, tax return, and transfer pricing analysis are consistent.
Respond Within Indonesia’s SP2DK Procedure
Under PMK 111/2025, taxpayers generally have 14 days from the date the SP2DK is issued to provide their response. If additional time is required, the taxpayer can submit a written request for an extension of up to seven days, provided the request is submitted before the original response period expires.
The response can be submitted through Coretax, directly to the relevant Tax Service Office (Kantor Pelayanan Pajak or KPP), or through post, expedition service, or courier.
For electronic submissions, Coretax provides a dedicated SP2DK response service. The taxpayer, its representative, or an authorized proxy can access the taxpayer portal, complete the response, attach supporting documents, and submit it electronically. The system generates an electronic receipt (Bukti Penerimaan Elektronik or BPE) after successful submission.
Respond to the DGT with confidence. Contact MAP Resources Indonesia at info@mapresourcesindonesia.com for SP2DK support.
The relevant Coretax service is AS.29-03, Surat Tanggapan atas Surat Permintaan Penjelasan dan Keterangan (SP2DK).
What Happens After the DGT Reviews the Response?
Submitting the response does not itself close the SP2DK. The DGT reviews the explanation and supporting documentation and determines the appropriate follow-up based on its findings.
| Possible outcome | Implication for the company |
|---|---|
| Position substantiated | The evidence supports the company’s explanation and the discrepancy can be resolved without changing the relevant tax position. |
| Further clarification required | The company may need to provide additional information or documentation concerning the discrepancy. |
| Error identified | The relevant tax return may need to be corrected and any resulting tax liability addressed. |
| Issue remains unresolved | The DGT may take further action under Indonesia’s tax supervision and examination framework. |
An SP2DK should be distinguished from a formal tax audit. It is a clarification mechanism used within DGT taxpayer supervision rather than a tax assessment establishing that a liability is due. Where the discrepancy remains unresolved, further action may follow under Indonesia’s applicable tax supervision and examination procedures.
Contact MAP Resources Indonesia for SP2DK Support
MAP Resources Indonesia helps foreign-owned companies respond to SP2DKs by identifying the underlying tax exposure and building a documented position for submission to the DGT. Contact us today at info@mapresourcesindonesia.com for support.
