Indonesia: New rules for preliminary tax refunds
Introducing new thresholds and compliance standards for specific taxpayers and taxable entrepreneurs
The Minister of Finance on April 29, 2026, issued Regulation No. 28 of 2026 (PMK-28) to update the preliminary refund procedures for tax overpayments.
The regulation replaces previous rules and establishes that tax overpayments can be refunded through an administrative review of applications submitted by certain-criteria taxpayers, taxpayers meeting specific requirements, and low-risk taxable entrepreneurs.
Key changes introduced by the regulation include:
- Certain-criteria taxpayers face higher compliance standards.
- Taxpayers meeting specific requirements face clear numerical limits.
- The VAT refund threshold for taxpayers meeting specific requirements has been lowered to IDR 1 billion, and preliminary VAT refunds are only granted if the value of taxable supplies reported in the monthly VAT return does not exceed IDR 4.2 billion
- Low-risk taxable entrepreneurs face a new activity threshold requiring that at least 80% of activities be related to taxable supplies and/or exports to qualify for preliminary refunds
- The low-risk taxable entrepreneur status may be revoked if the taxpayer has failed to submit their monthly VAT return on time within the last 12 months
Existing certain-criteria taxpayer designations issued under the previous rules are revoked, and affected taxpayers may reapply for the designation between June 1, 2026, and June 10, 2026, provided they meet the updated requirements
Read a May 2026 report prepared by the KPMG member firm in Indonesia