DGT Issues Procedures on Blocking, Seizure, and Auction of Shares of Tax Debtors
The Directorate General of Taxes (DGT) has issued new provisions on procedures for the blocking, seizure, and sale of shares owned by tax debtors under DGT Regulation Number PER-26/PJ/2025 (PER-26/PJ/2025). The regulation serves as an implementing regulation of the Minister of Finance Regulation Number 61/2023 concerning tax collection.
In general, PER-26/PJ/2025, which entered into force on 31 December 2025, regulates three principal areas.
First, the use of bank accounts in the execution of share seizure and sale in the capital market.
Second, the blocking of shares in securities sub-accounts and assets held in customer fund accounts belonging to the tax debtor.
Third, the procedures for the seizure and sale of shares traded in the capital market.
Objects of Seizure and Utilized Accounts
A seizure may be carried out against shares traded in the capital market and owned by a tax debtor.
A tax debtor refers to an individual or entity responsible for the payment of taxes, including representatives exercising rights and fulfilling obligations on behalf of a taxpayer.
To conduct a share seizure, the DGT is required to maintain a securities account, a customer fund account, and a temporary holding account to facilitate the transfer, sale, and administration of tax collection proceeds.
Request for Financial Account Information
Prior to blocking and seizing shares, the DGT must first submit a request for information to the Depository and Settlement Institution, namely Indonesian Central Securities Depository (KSEI).
The information requested includes, among others:
- Single Investor Identification Number (SID)
- Securities sub-account number
- Type, quantity, name, and share code
- The securities broker managing the account
- Customer fund account number and its administering bank
- Information regarding corporate actions relating to shares owned by the tax debtor.
Blocking of Shares and Accounts
Blocking may be executed after a warrant for seizure has been issued. In addition, the DGT must possess complete information on the tax debtor’s financial accounts.
Then, the blocking request is submitted to the Financial Services Authority (OJK), which subsequently forwards the request to KSEI for the blocking of shares in the securities sub-account and to the relevant customer fund account bank for the blocking of fund balances.
It is important to note that each blocking action is documented in an official report of blocking. If not possible, the blocking action shall be recorded in an equivalent document and submitted to the DGT and the tax debtor.
Seizure of Shares and Funds
If, after the blocking action, the tax debtor fails to settle the outstanding tax liabilities and collection costs, seizure may then be undertaken. The seizure is executed by a tax bailiff and may cover:
- Shares held in the securities sub-account
- Asset balances in the customer fund account
The implementation of the seizure must be recorded in an official report of seizure and delivered to the tax debtor and the relevant financial institution.
Sale of Seized Shares
If, within 14 days of the seizure, the tax debt remains unpaid, the DGT may proceed with the sale of the seized shares or transfer the fund balance to the DGT’s customer fund account.
The sale of shares may be conducted through the stock exchange under the following conditions.
- The selling price must be at least equal to the market opening price on the date of sale.
- The sale may be repeated if the shares have not been fully sold, and the tax debt remains unsettled.
Each share sale must be documented in an official report of share sale and all costs incurred shall be deducted from the sale proceeds.
The proceeds from the sale may subsequently be:
- Held in the DGT’s customer fund account;
- Transferred to a temporary holding account;
- Allocated first toward collection costs and settlement of tax liabilities; and
- Paid to the state treasury in accordance with prevailing regulations.
Refund of Excess Collection Proceeds
If the shares' value sold exceeds the outstanding tax arrears, the DGT is obligated to refund the excess amount to the tax debtor.
The refund may be carried out through a transfer of funds or by returning shares to the tax debtor’s securities sub-account. Such a refund must also be accompanied by the revocation of the seizure and an official report on the return of seized assets. (ASP)
