A tax audit is an examination carried out by the Directorate General of Taxes (DGT) to test a taxpayer's compliance with tax obligations. Basically, it differs from other audits that a company assigns to an internal or external audit team to examine its finances and operations.
This is because a tax examination is not assigned by an organization or company, but carried out by the tax authority based on its authority.
In addition, not all taxpayers are examined. An examination is carried out when certain criteria are met, for example a taxpayer selected based on compliance risk or a tax return stating an overpayment or a loss (Article 4 of PMK 15 of 2025).
A taxpayer who is examined is, in principle, obliged to fulfill their obligations during the examination, for example showing the books, records, and documents requested (Article 29 of the KUP Law). An examination itself does not always mean there is a violation.
What Is Tax Audit?
Audit tax audit is a series of examination activities by the DGT to collect and process data, information, and/or evidence objectively and professionally based on examination standards in order to test taxpayer compliance with tax obligations (Article 1 number 6 of PMK 15 of 2025; as of 14 October 2026, check the latest provisions).
The DGT delivers a Notice of Examination to the taxpayer at the start of the examination, and a Notice of Examination Results (SPHP) after testing is completed.
The submission of the SPHP will also attach a list of the findings of the examination that need to be considered and understood by taxpayers to ensure the fulfillment of their rights and obligations during the tax audit.
The DGT or Directorate General of taxes under the Ministry of Finance of the Republic of Indonesia directs a tax auditor to conduct a tax audit.
This DGT examination differs from the financial statement audit by public accountants and from a compliance audit or internal tax reviews (tax review) carried out by the company itself, and is not replaced by either of them.
Why Is Tax Audit Necessary?
Basically, the tax system in Indonesia self-assessment is the reason why the need for tax audits.
The system allows taxpayers, including individuals, organizations, and corporations, to calculate and report their own taxes.
This makes it necessary to check the conformity of the report to the relevant rules.
The legal basis for tax examinations is Article 29 of the KUP Law, or the General Provisions and Tax Procedures Law (as amended several times) and its implementing regulation, namely PMK No. 15 of 2025 on Tax Examination. These provisions may change; as of 14 October 2026, check the latest version at pajak.go.id or the Ministry of Finance JDIH.
Among the criteria for examinations to test taxpayer compliance with tax obligations (Article 4 of PMK 15 of 2025) are the following:
- Examination of tax returns (SPT) stating an overpayment (including requests for refund of overpaid tax) or a loss.
- Examination of taxpayers selected based on compliance risk, or when the DGT has concrete data showing that tax payable has not been paid or has been underpaid.
Conveniently, this examination is carried out to ensure the conformity of the taxpayer's report with reality and the absence of non-compliance or violation of taxation.
In addition, the DGT may also carry out examinations for other purposes (not compliance testing), among others in the following cases:
- Submission of deletion of Taxpayer Identification Number (NPWP) that is not effective
- Issuance of Taxpayer Identification Number (NPWP) based on position
- Confirmation of taxable entrepreneurs (PKP) by position
- Revocation of PKP
- Settlement of objections
- Collection of supporting information to compile the norm for calculating net income (NPPN)
- Identification and determination of taxpayers in remote areas
- Identification and localisation of Value Added Tax (PPN) payable and other administrative purposes
What Are the Types of Tax Audit?
According to PMK No. 15 of 2025 (effective since 14 February 2025 and replacing the old regulation), examinations to test compliance are divided into three types: complete, focused, and specific examinations. The old division into field examinations and office examinations is no longer used as a type. Examinations may be carried out at the DGT office, the taxpayer's residence or place of domicile, place of business, or another place deemed necessary by the tax examiner. The testing time limit for each type is detailed below (Article 6 of PMK 15 of 2025) and may change, so check the latest provisions at pajak.go.id or the Ministry of Finance JDIH. For a general picture of types of audits in general, read the related article.
1. Complete Examination
Scope: tests compliance across all items in the taxpayer's tax return in depth.
Testing time limit: at most 5 months, counted from delivery of the Notice of Examination to the taxpayer until delivery of the Notice of Examination Results (SPHP).
Purpose: examination of the fulfillment of tax obligations by taxpayers.
Results: the tax examiner delivers the SPHP along with a list of findings, followed by a final discussion of the examination results.
2. Focused Examination
Scope: tests compliance focused in depth on one or several items in the tax return.
Testing time limit: at most 3 months, counted from delivery of the Notice of Examination to the taxpayer until delivery of the SPHP.
Purpose: examination to ensure compliance and suitability of the taxpayer's tax report with tax regulations.
Results: the tax examiner delivers the SPHP along with a list of findings, followed by a final discussion of the examination results.
3. Specific Examination
Scope: tests compliance in a simple way on one or several items in the tax return, certain data, or certain tax obligations.
Testing time limit: at most 1 month, counted from delivery of the Notice of Examination to the taxpayer until delivery of the SPHP. For specific examinations based on concrete data held by the DGT, testing takes at most 10 working days.
Results: the tax examiner delivers the SPHP along with a list of findings.
After the SPHP is delivered, the period for the final discussion of examination results and reporting is at most 30 working days (10 working days for specific examinations based on concrete data). The testing period may be extended by up to 4 months for taxpayers in the same group or those indicated to have engaged in transfer pricing transactions and/or other special transactions indicated to involve financial engineering. Examinations for other purposes (not compliance testing) take at most 4 months. Source: Article 6 of PMK 15 of 2025; as of 14 October 2026, check the latest provisions because other exceptions may apply.
What Documents Are Required for Tax Audit?
The documents requested may differ according to the type and scope of the examination and the tax examiner's request. Examples of documents that generally need to be prepared:
- Financial statements or bookkeeping
- Tax reporting documents
- Internal audit report
- Bank account documents
- Contract documents relating to tax activities
- Asset documents
- Other documents relating to the taxpayer
What Is the Tax Audit Process?
Now that you’ve learned a few important things about tax audits, you need to understand the steps involved in the tax audit process.
Below is a general picture of the stages of a tax examination. The order and details may differ according to the type of examination and the provisions in force:
- Identify and determine the location of the taxpayer to be examined
- Develop the scope of the examination covering the areas and aspects to be examined
- Determine documents or financial statements belonging to the taxpayer that need to be checked
- Deliver a Notice of Examination to the taxpayer
- Checking the completeness of files or documents required in the tax audit process
- Checking and analyzing the suitability of financial statements and tax returns of taxpayers against tax rules
- Prepare audit findings based on the identification of problems or nonconformities found during the tax audit process
- Deliver the SPHP along with a list of findings to the taxpayer, discuss the taxpayer's response in the final discussion of examination results, then prepare the examination report
Read Also: Complete Guide to Audit procedures, stages, and examples
Tax Audit Example
The following example is not an ordinary tax examination, but an investigation of a tax crime by the DGT. According to a DGT release, HBW, a director of PT BPE, allegedly used tax invoices not based on actual transactions, causing losses to state revenue of at least Rp3.7 billion.
The alleged acts are said to have occurred from 2018 to 2019.
The DGT investigation team then handed over responsibility for the suspect and evidence (stage II) to the public prosecutor. The suspect's status remains an allegation until there is a court ruling.
In the release, the suspect was charged under Article 39A letter a in conjunction with Article 43 paragraph (1) of the KUP Law.
The criminal penalties mentioned in that DGT release (as of 14 October 2026; check the latest provisions):
- Threat of punishment: minimum 2 years and maximum 6 years in prison
- Fine: 2 to 6 times the amount of tax in the tax invoice
Thus, an alleged tax violation can proceed to a preliminary evidence examination and investigation, which are regulated separately from examinations to test compliance. Source: DGT release on the stage II handover of the suspect.
FAQ About Tax Audits
What is a tax audit?
A tax audit is an examination activity that allows the Directorate General of Taxes to gather and analyze tax data to ensure taxpayer compliance with applicable tax obligations and regulations.
Why are tax audits necessary?
Because Indonesia's tax system is self-assessment , with taxpayers calculating and reporting their own tax, so an examination of whether those reports conform is needed. The legal basis is the General Provisions and Tax Procedures Law (UU KUP) and its implementing regulations; as of 14 October 2026, check the latest provisions at pajak.go.id.
Will all taxpayers be audited?
No. An examination is carried out when certain criteria are met, for example when a taxpayer is selected based on compliance risk. A taxpayer who is examined is, in principle, obliged to meet their obligations during the examination.
What are the types of tax audits?
According to PMK 15 of 2025, examinations to test compliance consist of three types: complete, focused, and specific examinations, with testing time limits of at most 5 months (complete), 3 months (focused), and 1 month (specific), counted from delivery of the Notice of Examination until delivery of the SPHP (Article 6 of PMK 15 of 2025; as of 14 October 2026; check the latest provisions). The old division into field examinations and office examinations is no longer used as a type.
Which documents need to be prepared for a tax audit?
Financial statements or bookkeeping, tax reporting documents, internal audit reports, bank account documents, contracts related to tax activities, asset documents, and other documents relevant to the taxpayer.
What is an SPHP in a tax audit?
An SPHP is the Notification Letter of Examination Results delivered by the DGT along with the list of examination findings. Taxpayers need to understand this document to ensure their rights and obligations are fulfilled during the audit process.
Conclusion
That is the explanation of tax audits, namely examinations by the DGT whose role is to test taxpayers' tax compliance.
Not only tax audits have an important role in reviewing tax obligations, because other audits such as compliance audits, financial audits, and others are also necessary for the sustainability of a company or organization.
Audithink is an application that allows the audit team to be more easily able to run the audit process, this is because with the efficiency of time and energy can provide optimal results.
Audithink helps your internal audit team through risk assessment, audit planning, work program templates, notifications, follow-up monitoring, and automatic reports. Audithink does not perform tax audits or tax consultation. Contact us now schedule an app demo for your company and see how Audithink will help your audit process!
