The Ministry of Finance has introduced a significant regulatory update through Regulation No. 117 of 2024, which outlines a new framework for the write-off of tax receivables. This regulation supersedes the previous provisions set forth in Regulation No. 68 of 2012 and Regulation No. 43 of 2018, marking a pivotal shift in the management of tax debts.

Overview of the New Provisions

The new regulation aims to streamline the process of writing off tax receivables, ensuring a more efficient and equitable approach to tax debt management. The scope of tax receivables eligible for write-off under this regulation is comprehensive and includes:

• Underpaid tax assessment letters
• Additional underpaid tax assessment letters
• Land and building tax assessment letters
• Tax collection letters
• Land and building tax collection letters
• Notifications of payable tax
• Tax assessment letters
• Additional tax assessment letters
• Decrees of joint agreement, decrees of correction, decrees of objection, appeal decisions, and judicial review decisions that result in an increase in the amount of payable tax

Criteria for Write-Off

To qualify for a write-off, tax receivables must meet one of the following criteria:

• The right to collect the tax has expired.
• The tax bearer is deceased and has no inheritance.
• The tax bearer cannot be found, and there are no assets available to settle the tax debt.
• The state's right to collect the tax cannot be implemented due to changes in tax laws or regulations.

Implementation Process

The write-off process will be overseen by the Ministry of Finance. However, for tax receivables assessed at up to IDR 100,000,000 (one hundred million Rupiah), the Director General of Tax is authorized to conduct the write-off on behalf of the Ministry. This delegation ensures that smaller cases are managed efficiently without overburdening the central authority.

The Director General of Tax shall undertake the following steps:

1. List Preparation: Compile a comprehensive list of tax receivables that qualify for write-off based on their uncollectibility.
2. Review: Conduct a thorough review of the proposed list to ensure accuracy and compliance with the regulation.
3. Decision: Determine the specific tax receivables to be written off.
4. Execution: Carry out the write-off process in accordance with the regulation.
5. Submission: Submit the final proposal for write-off to the Ministry of Finance for approval.

Final Decree

Upon receipt of the proposals, the Ministry of Finance will issue a decree formally approving the write-off of the specified tax receivables. This decree will serve as the official documentation of the write-off process, ensuring transparency and accountability.

Significance of the New Regulation

The introduction of Regulation No. 117 of 2024 represents a significant advancement in tax debt management. By providing a clear and structured framework for writing off tax receivables, the Ministry of Finance aims to enhance the efficiency of tax administration and promote fairness in the tax system. This regulation not only simplifies the process for taxpayers but also ensures that the state's resources are allocated more effectively.

Conclusion

The new provisions outlined in Regulation No. 117 of 2024 mark a crucial step forward in modernizing tax debt management. This regulation promises to bring clarity, efficiency, and fairness to the process of writing off tax receivables. It is essential for all stakeholders, including taxpayers and tax professionals, to familiarize themselves with these changes to navigate the evolving tax landscape effectively.