INSPIRED VOL.3/AUGUST 2026:
CORPORATE REPORTING OBLIGATIONS,
THE STATUTORY AUDIT, AND ADJUSTMENTS TO REGULATIONS IN THE FIELD OF INCOME TAX
REGULATION INSIGHTS & TAX ALERTS Corporate Reporting Obligations: Implementation of Permenkum 49/2025 and PP 43/2025
and the Audit Obligation under UU PT 40/2007
In general, the financial reporting practice of closely-held companies in Indonesia has been to prepare financial statements only as needed, doing just enough to satisfy tax obligations and to give limited accountability to shareholders. No audit is performed, the Annual General Meeting of Shareholders (“RUPS”) is often disregarded, and nothing is ever reported to the ministry. However, two regulations issued in 2025 have upended this status quo.
PP No. 43 of 2025, promulgated on 19 September 2025, significantly raises reporting quality standards. It requires complete statements prepared under financial accounting standards by competent personnel, accompanied by a Directors’ Statement of Responsibility and supported by an adequate internal control system. Complementing this framework, Permenkum No. 49 of 2025 expands the scope of who must report, extending the filing obligation to every Capital Partnership Company, not just those subject to a statutory audit.
PP No. 20 of 2026: Adjustments to Regulations in the Field of Income Tax
Government Regulation No. 20 of 2026, enacted on 22 April 2026, introduces significant amendments to PP No. 55 of 2022.
The 0.5% final tax rate for MSMEs remains unchanged, as does the annual gross revenue exemption of up to Rp 500 million for individual taxpayers, but the criteria for eligibility have been considerably narrowed. Corporate entities, including limited partnerships (CV), firms, private limited companies (Perseroan Terbatas) and village-owned enterprises (BUMDes), no longer qualify for this preferential rate. Consequently, the scheme is now strictly reserved for individual taxpayers, sole proprietorships (Perseroan Perorangan) and cooperatives, provided their annual gross revenue does not exceed the Rp 4.8 billion threshold.
Furthermore, the statutory period allowed for utilizing this final tax facility has been restructured. Under the new framework, individuals and sole proprietorships face no time limits at all, removing the respective seven-year and four-year restrictions previously imposed by PP No. 55 of 2022. Conversely, cooperatives retain their four-year entitlement window. A newly inserted Article 20A also clarifies that bribes, gratuities, or illicit payments of any kind are not deductible from gross income. Transitional provisions allow taxpayers already inside a period granted under PP No. 55 of 2022 to run it out, provided they continue to satisfy that regulation’s eligibility criteria; the cut-off differs by category, and cooperatives registered before the new regulation took effect are covered through fiscal year 2029.
