Preliminary examination hearing of the judicial review of the General Provisions and Procedures of Taxation (KUP) Law, Wednesday (13/11) in the Plenary Courtroom of the Constitutional Court. Photo by Humas MK/Gani.
JAKARTA, Public Relations of the Constitutional Court—The preliminary examination hearing of the judicial review of Article 2 paragraph (4a) of Law Number 6 of 1983 concerning General Provisions and Tax Procedures as amended into Law Number 16 of 2009 concerning General Provisions and Tax Procedures (KUP), and Article 9 paragraphs (2) and paragraph (8) letter a of Law Number 8 of 1983 concerning Goods and Services and Sales Tax on Luxury Goods as well as Value Added Tax on Goods and Services and Sales Tax on Luxury Good (PPN & PPnBM Law) was held by the Constitutional Court (MK) on Wednesday (13/11/2019).
The hearing of case No. 68/PUU-XVII/2019 filed by PT Wira Pratama Gasindo was presided over by Constitutional Justice Suhartoyo (chairman), with Constitutional Justices Enny Nurbaningsih and Manahan M. P. Sitompul (panel members).
The Petitioner\'s legal counsel Syawaludin and partners explained that the Petitioner is a private legal entity and an employer of taxpayers who took the tax amnesty and reported all of their assets at the district tax service office (KPP). However, the Petitioner’s constitutional right to obtain justice and legal certainty over the enactment of the provisions on the lack of recognition of the tax input in the Petitioner\'s tax returns before it was confirmed as a taxable entrepreneur (PKP) is potentially impaired.
Thus, the Petitioner filed an objection to the issue. The Petitioner is an (non-subsidized) LPG agent from PT Pertamina and has paid input VAT in 2016. The Petitioner has never collected output VAT from buyers of non-subsidized LPG prior to being confirmed as a taxable entrepreneur. In addition, underpaid VAT based on gross income which must collect its own VAT, factually means it must be borne and paid by the Petitioner.
Article 2 paragraph (4a) of the KUP Law reads, “Taxation Obligation for the Taxpayer whose Taxpayer Code Numbers has been issued or has been established as Taxable Entrepreneur in ex officio, as set forth in section (4), since the Taxpayer meets the subjective and objective requirement in accordance with the provision of the taxation legislation, not longer than 5 (five) years prior the issuance of Taxpayer Code Number and/ or prior the establishment as the Taxable Entrepreneur”
Article 9 paragraph (2) of the PPN & PPnBM Law reads, “Input Tax in a Taxable Period is credited with an Output Tax in the same Taxable Period.” Article 9 paragraph (8) letter a reads, “Crediting of the Input Tax as referred to in paragraph (2) cannot be applied to expenditures for: a. acquisition of Taxable Goods or Taxable Services prior to the establishment of the Entrepreneur as a Taxable Entrepreneur.”
The Petitioner argues that Article 2 paragraph (4a) of the KUP Law shows real injustice because it only states the "tax obligation" of taxpayers who are confirmed as taxable entrepreneurs is now maximum 5 (five) years. Even though the taxpayers have their "taxation rights", when it is limited to no longer than 5 (five) years, it should apply equally to the taxation rights and obligations of the entrepreneurs.
"Therefore, in order to create fairness and fair legal certainty, Article 2 paragraph (4a) of the KUP Law must be interpreted as taxation rights and obligations for taxpayers whose Taxpayer Identification Number is issued and/or that are confirmed as a Taxable Entrepreneur as intended in paragraph (4), starts when the taxpayers fulfill subjective and objective requirements in accordance with the provisions of tax legislation, no later than five years before the issuance of the Taxpayer Identification Numbers and/or are confirmed as Taxable Entrepreneurs," said Syawaludin, one of the Peittioner’s attorneys.
According to the Petitioner, Input Tax is the VAT paid by taxpayers and/or PKP to the seller when buying goods and or Taxable Services (JKP) in the customs area. Output Tax is the VAT collected/taken by the PKP from the buyer when selling goods and/or JKP in the customs area. The crediting provision only takes effect after the entrepreneur is confirmed as a PKP and when retroactive (PKP) tax obligations are made, the PKP’s Input Tax is not recognized.
If the PKP’s Retroactive Taxation Rights are recognized, the Petitioner is concerned that the Input Tax that can be credited is only in December because technically according to the Directorate General of Taxes (DJP), the calculation of PKP tax obligations in a certain year before being confirmed as PKP is determined from a tax year to a particular tax period usually the December tax, so the January and November Input Taxes cannot be credited.
The taxpayer obligation as a PKP that must be deposited to the state is the net value of the Output Tax minus the Input Tax. Before a taxpayer is confirmed as a PKP, the input Tax paid by the taxpayer to buyers who collect it cannot be credited (cannot be reduced) from the Output Tax it receives. This raises the injustice of the tax treatment between rights and obligations before and after taxpayers are confirmed as PKP.
Constitutional Justice Enny Nurbaningsih highlighted Law No. 6 of 1983 as the object for the judicial review. "Have you read the Law being reviewed carefully? Is there Article 2 paragraph (4a) in that Law? It is rather difficult to understand the Taxation Law because there are so many changes. From Law Number 6 of 1983, Law Number 16 of 2000, Law Number 28 of 2007, Law Number 16 of 2009. I read all of the Taxation Laws, apparently Article 2 paragraph (4a) exists in Law Number 28 of 2007. Try to cross check [it], because it involves the object and is very important. If the object is not clear, it\'s hard to understand which object you are actually [petitioning]," she Enny.
Constitutional Justice Manahan M. P. Sitompul observed a lack of care in preparing the judicial review petition. "While in fact the attorneys are 14 people. There should be no more errors in writing, let alone in [elaboration of the] laws. The point is, on page 2 of your petition, the numbers of the laws are [muddled], [some have] the same numbers but the laws are different. That is visible," he said.
Constitutional Justice Suhartoyo stress that the Petitioner be clearer about the article being tested. "It should be clear that what you are reviewing, the articles are in [which] law? Please check again. If you are firm with the article in the law, go ahead. But the Constitutional Court has decided the case against Article 2 paragraph (4) and paragraph (4a) in Law Number 28 of 2007 with many considerations here that indeed the issue of retroactive enforcement of PKP has actually been given room for assessment," he explained. (Nano Tresna Arfana/NRA)
Translated by: Yuniar Widiastuti
Tuesday, November 26, 2019 | 16:59 WIB 176