JAKARTA. Minister of Finance Regulation (PMK) No. 28 of 2026 introduces a new requirement for accelerated tax refunds available to low-risk VAT-registered persons (PKP).
One of the key changes is the introduction of an 80% threshold for certain business activities as a condition for obtaining a preliminary tax overpayment refund.
The Directorate General of Taxes (DGT) stated that the requirement is intended to ensure that accelerated tax refunds are granted only to taxpayers whose principal business activities meet the criteria for low-risk taxable entrepreneurs.
Aligning with the Substance Over Form Principle
Director General of Taxes Bimo Wijayanto explained that the 80% threshold strengthens the application of the substance over form principle in the accelerated refund process.
"The 80% threshold is essentially intended for low-risk taxable entrepreneurs. It strengthens a strategic instrument based on the substance over form principle," Bimo said during the APBN KITA 2026 press conference on May 5, 2026.
According to him, the DGT needs to conduct a more thorough verification process to ensure that accelerated refunds are granted only to entities whose core business genuinely meets the requirements.
Not for Incidental Business Activities
The policy is intended to prevent taxpayers from obtaining accelerated refunds merely because they engage in qualifying activities on a limited or incidental basis, even though those activities do not represent their principal business.
Bimo emphasized that taxpayers failing to meet the 80% threshold remain eligible to claim a tax refund. However, the refund will be processed through the regular tax audit mechanism rather than the accelerated procedure.
"If the qualifying activities account for less than the 80% threshold, taxpayers are still entitled to a refund. We will simply process it through a tax audit," he said.
When reviewing applications for accelerated refunds, the DGT will assess whether the qualifying activities account for at least 80% of the total eligible supplies, as stipulated under the regulation. (KEN)
