No More Book Transfers: Income Tax Article 25 Overpayments Must Be Refunded or Credited

Taxpayers who record an overpayment of Income Tax Article 25 (ITA 25) installments during the current year can no longer transfer it to the following month’s installment.

Under Directorate General of Taxes Regulation Number PER-11/PJ/2025, if there is an overpayment of ITA 25 installments, taxpayers may now only request a refund (restitution) of the overpayment or apply it as a credit to the ITA installment for the following month.

With the enactment of PER-11/PJ/2025, the previous regulation governing ITA 25 installments, Director General of Taxes Decree Number KEP-537/PJ/2000, is officially revoked and no longer in effect.

This regulation applies to overpayments arising from several conditions:

First, when a taxpayer submits their Annual Tax Return (SPT) after the deadline. Second, when a taxpayer requests an extension to submit the Annual Tax Return.
Third, when a taxpayer files a correction to the Annual Tax Return.

READ: Reform of Tax Reporting Mechanism: 25 Previous Regulations Officially Revoked

It is important to remember that if you submit your Annual Tax Return (SPT) late, request an extension, or file a correction to the Annual Tax Return, you must recalculate the amount of Income Tax Article 25 (ITA 25) installments for the months following the submission of the Annual Tax Return.

The recalculated ITA 25 installment amount must then be compared with the installments paid before the Annual Tax Return was submitted or corrected.

If the ITA 25 installments paid before the submission or correction of the Annual Tax Return exceed the recalculated amount, the overpaid portion can only be refunded (restituted) or credited.

Requirements for Recalculating Income Tax Article 25 (ITA 25) Installments

According to PER-11/PJ/2025, there are specific conditions under which a taxpayer's ITA 25 installments must be recalculated. The details are as follows:

• The taxpayer is entitled to fiscal loss compensation.
• The taxpayer earns irregular income.
• The Annual Income Tax Return (SPT) for the previous tax year is submitted after the deadline.
• The taxpayer receives an extension to submit the Annual Income Tax Return.
• The taxpayer files a correction to the Annual Income Tax Return, resulting in a higher monthly installment compared to before the correction.
• There is a change in the taxpayer's business condition or activity.

Reduction of Income Tax Article 25 (ITA 25) Installments

PER-11/PJ/2025 also regulates the reduction of ITA 25 installment amounts in the current fiscal year. As in the previous regulation, taxpayers may still submit a request to reduce their ITA 25 installments during the year.

However, there are several substantive changes in the new regulation compared to the previous Directorate General of Taxes Regulation No. PER-11/PJ/2022.

First, the requirements that taxpayers must fulfill have increased. In addition to providing calculations of the estimated income tax payable, taxpayers are now also required to submit:

• The Annual Income Tax Return (SPT) for the last two tax years before the year in which the reduction request is submitted.
• The VAT (Value-Added Tax) Return for the last three tax periods.

Second, regarding the procedure for submitting the ITA 25 installment reduction request, while it previously had to be filed in writing to the Directorate General of Taxes, it can now also be submitted electronically via the taxpayer’s portal.

Other conditions remain the same as in the previous regulation: the request can only be made after three months of the tax year have passed, and the estimated tax payable must be less than 75% of the previous calculated ITA 25 installment.

Following the submission, the Directorate General of Taxes is required to issue an approval or rejection notice within a maximum of 30 days after the request is received.

Increase of Income Tax Article 25 (ITA 25) Installments by Official Assessment

PER-11/PJ/2025 also regulates the authority of the Directorate General of Taxes (DJP) to recalculate the amount of ITA 25 installments for the current tax year when a taxpayer’s financial performance exceeds previous estimates.

Under the previous regulation, a recalculation was triggered if the actual income tax payable reached 150% of the initially estimated amount. However, in the latest regulation, this threshold has been lowered to 120% of the initially estimated tax payable.(ASP/KEN)