New Regulation on Preliminary Evidence Investigation Procedure relating to Tax Crimes

AHRP Legal Alert Page 1 of 7
Legal Alert December 2022
New Regulation on Preliminary Evidence
Investigation Procedure relating to Tax Crimes
I. Introduction
The Minister of Finance Regulation Number 177/PMK.03/2022 of 2022 on
Procedures for Preliminary Evidence Investigation Procedure of Crimes in the
Taxation Field (“MoFR No. 177/2022”) was issued to provide legal certainty on the
implementation of preliminary evidence in tax crimes by revoking the preceding
regulation of the same subject matter, the Minister of Finance Regulation Number
239/PMK.03/2014 of 2014 (“MoFR No. 239/2014”), as well as to serve as the
implementing regulation of Article 43A paragraph (4) of Law Number 6 of 1983 on
General Provisions and Procedure of Tax as lastly amended by Law Number 7 of
2021 (“Law No. 6/1983”).
Preliminary evidence is defined as circumstances, actions, and/or evidence in the
form of information, texts, or objects which may lead to a strong presumption that
a criminal offense is being or has been committed in the field of taxation,
undertaken by anyone which may cause loss to the state revenue (“Preliminary
Evidence”).1 Whereas investigation of Preliminary Evidence is an investigation
conducted to obtain Preliminary Evidence on an alleged crime in the field of
taxation (“Preliminary Evidence Investigation”).2
Article 43A paragraph (1) Law 6/1983 stipulates that based on information, data,
report, and complaint, the Director General of Tax (“DGT”) is authorized to examine
Preliminary Evidence prior to investigation of tax crime. Information, data, report,
and complaint received by DGT will be developed and analyzed through
intelligence activities and/or other activities in which the result could be followed
by examination, investigation of preliminary evidence, or may be decided not to be
pursued.3 Additionally, the preliminary evidence investigation shall be conducted
by the Civil Investigator within the DGT who receives the Preliminary Evidence
Investigation Warrant.4
Provisions on procedure of Preliminary Evidence Investigation is further regulated
in MoFR No. 177/2022, which will be further elaborated below.
1
Article 1 (26) Law No. 6/1983 Jo. Article 1 (8) MoFR No. 177/2022.
2
Article 1 (27) Law No. 6/1983 Jo. Article 1 (9) MoFR No. 177/2022.
3
Elucidation of Article 43A (1) Law No. 6/1983.
4
Article 43A (1) Law No. 6/1983.
On 5 December 2022, the
Minister of Finance issued
MoFR No. 177/2022
regarding further
arrangements related to
Preliminary Evidence
Investigation. This
regulation stipulates the
further procedures in
conducting open and
closed preliminary
evidence investigation.

II. Key Changes
A. General Provisions on Implementation of Preliminary Evidence
Investigation
At the outset, it is worth noting that the said regulation will enter into force 60 (sixty)
days after the promulgation date.5 Taking into account that MoFR No.177/2022
was promulgated on 5 December 2022, thus the regulation shall enter into force
starting on 3 February 2023. Key changes relating to Preliminary Evidence
Investigation regulated under MoFR No. 177/2022 are as follows:
A.1. Basis of Preliminary Evidence Investigation
Preliminary Evidence Investigation is conducted prior to investigation of tax
crime.6 Nevertheless, Preliminary Evidence Investigation shall not advance
into investigation of tax crime provided that the Taxpayer voluntarily disclose
through a written statement on their erred conduct accompanied by the
settlement of the underpayment of the actual tax payable along with its
administrative sanction per Law No. 6/1983.7
Preliminary Evidence Investigation is conducted based on the development
and analysis of:8
a. Intelligence Activities
Development and analysis through intelligence activities are
conducted towards information, data, report, and complaint received
by DGT, where the result is produced in the form of tax intelligence
information sheet.9
a. Other Activities
Development and analysis though other activities are carried out by
way of supervision, inspection, development, examination,
development of preliminary evidence Investigation, or development of
investigation, with the result produced in the form of a report
containing proposal of Preliminary Evidence Investigation.10
In its implementation, there are 2 (two) methods provided by MoFR No.
177/2022, namely: (i) Open Preliminary Evidence Investigation; and (ii)
Closed Preliminary Evidence Investigation.11 Both methods are applicable
towards suspected criminal events specified in the Preliminary Evidence
Investigation Warrant.12 The primary difference between these two methods
is that Open Preliminary Evidence Investigation begins with the delivery of
5
Article 32 of MoFR No. 177/2022.
6
Article 2 (3) of MoFR No. 177/2022.
7
8
9
10
11
Article 5 (1) MoFR No. 177/2022.
12

a Preliminary Evidence Investigation notice to the individual or entity subject
to the Preliminary Evidence Investigation,13 whereas Closed Preliminary
Evidence Investigation is carried out without the delivery of such notice.14
A.2. Period of Preliminary Evidence Investigation
Based on Article 6 paragraph (1) of MoFR No. 177/2022, Open Preliminary
Evidence Investigation is carried out within a maximum period of 12 (twelve)
months from the date of delivery of the Preliminary Evidence
Investigation notice. Meanwhile, Closed Preliminary Evidence
Investigation is carried out within a maximum period of 12 (twelve) months
as of the date the Preliminary Evidence Investigation notice is received
by the Preliminary Evidence Investigator.15
The above stated procedural period on Open Preliminary Evidence
Investigation and Closed Preliminary Evidence Investigation differs from the
previous regulation. Under MoFR No. 239/2014, the Open Preliminary
Evidence Investigation is conducted within a maximum period of 12 (twelve)
months from the date of submission of the Preliminary Evidence
Investigation notice until the date of the Preliminary Evidence
Investigation report,16 while Closed Preliminary Evidence Investigation
could be conducted within a maximum period of 12 (twelve) months from
the date the Preliminary Evidence Investigation warrant is received by
the Preliminary Evidence Investigator until the date of the Preliminary
Evidence Investigation report.17
Moreover, should the Open Preliminary Evidence Investigation or Closed
Preliminary Evidence Investigation cannot be completed within the set
period, the Preliminary Evidence Investigator may request an extension to
the DGT 18 for a maximum of 12 (twelve) months of extension from the
initial period expiration date.19
The foregoing provision also changes the previously prevailing extension
period set out in MoFR No. 239/2014, as Open Preliminary Evidence
Investigation and Closed Preliminary Evidence Investigation were able to be
extended for a maximum of 24 (twenty-four) months.20
13
14
15
16
17
18
19
20

A.3. Authorities/Rights and Obligations in Preliminary Evidence
Investigation
The obligations and authorities of Preliminary Evidence Investigator, as well
as the rights and obligations of the individual or entity subject to Preliminary
Evidence Investigation, are summed up in the table below:
Party Obligations
Authorities/
Rights
Preliminary
Evidence
Investigator
a. deliver notice of
Investigation, notice of
Amendment of Preliminary
Evidence Investigation
Warrant, notice of
extension of Preliminary
period, Notification of
Investigation Result,
notification of follow-up of
Investigation, or notification
of amendment of follow-up
of Preliminary Evidence
Investigation to individual
or entity subject to
Investigation;
b. present identification card
of the Preliminary Evidence
Investigator, should it be
requested by the individual
or entity subject to the
Investigation;
c. present Preliminary
Order or Investigation of
Investigation Warrant of
Change, if requested by
person individual or entity
that is being audited
Preliminary evidence;
d. return Evidence Materials
that have been obtained at
the completion of
Investigation;
e. maintain confidentiality to
other parties who are not
entitled to any matters
a. borrows and examines
books or records,
documents which serve
as the basis for
bookkeeping or
recording, and other
documents related to
income generated,
business activities,
taxpayer's independent
work, or payable tax
object;
b. access and/or download
electronically managed
data, information, and
evidence;
c. access and inspect
certain places or rooms,
movable and/or
immovable property
suspected or reasonably
suspected of being used
to store books or
records, documents that
serve as the basis for
bookkeeping or
recording, other
documents, money,
and/or items that may
provide clues regarding
income generated,
business activities,
taxpayer's independent
work, or payable tax
objects;
d. conduct sealing of
certain places or rooms
as well as movable
and/or immovable
property;
e. request information
and/or evidence required
from third parties related
to the Taxpayer who is

Party Obligations
Authorities/
Rights
known or disclosed to the
Investigator in relation to
the Preliminary Evidence
Investigation; and
f. secure the Evidence
Materials discovered in the
Investigation.21
The obligations of the
Investigator stated in letters a, b,
c, and d above, are exempted in
the Closed Preliminary Evidence
Investigation.22
subject to Preliminary
through the DGT;
f. request information from
related parties, and
record it in the official
report of information
inquiries; and
g. conduct other actions
required in relation to the
Investigation of
Preliminary Evidence.23
Individuals /
entities
a. provide an opportunity for
Examiner to enter and / or
examine certain places or
rooms, movable goods,
and / or immovable goods
that are suspected or
suspected to be used to
store Evidence Materials;
b. provide opportunities for
Investigator to access
and/or download Electronic
Data;
c. present and/or lend
Evidence Materials to the
Investigator;
d. provide verbal and / or
written information to the
Investigator; and
e. assist the Preliminary
Evidence Investigator in
order to ensure the
efficiency of the
Investigation.24
a. requests the Preliminary
Evidence Investigator to
submit a notice of
Investigation, notice of
the Amendment of
Investigation Order,
notice of the extension of
the period of Preliminary
Evidence Investigation,
Notification of
Investigation Results,
Investigation, or
notification of changes in
the follow-up to the
Investigation;
b. checking the
identification card of the
Investigator;
c. examine the Preliminary
Warrant or the
Amendment to the
21
22
23
24

Party Obligations
Authorities/
Rights
The obligations of individuals or
entities subject to Preliminary
Evidence Investigation are
exempted in a closed Preliminary
Evidence Investigation.25
Investigation Warrant.;
and
d. Recover the borrowed
Evidence upon
completion of the
Investigation.
The rights of individuals or
entities subject to the above
Investigation are exempted in
a Closed Preliminary
Evidence Investigation.26
Table 1. Authorities/Rights and Obligations in Preliminary Evidence Investigation
B. Preliminary Evidence Investigation Procedure
As explained in part A above, Preliminary Evidence Investigation can be carried
out through Open Preliminary Evidence Investigation and Closed Preliminary
Evidence Investigation, the procedure of those investigation are as follows:
Flowchart 1. Preliminary Evidence Investigation Procedure
25
26

Bibliography/References
1. Law Number 6 of 1983 on General Provisions and Procedure of Tax as lastly
amended by Law Number 7 of 2021 (“Law No. 6/1983”).
2. Minister of Finance Regulation Number 177/PMK.03/2022 of 2022 on
Procedures for Investigation Preliminary Evidence of Crime in the Taxation
Field (“MoFR No. 177/2022”).
3. Minister of Finance Regulation Number 239/PMK.03/2014 of 2014 on
Procedures for Investigation Preliminary Evidence of Crime in the Taxation
Field (“MoFR No. 239/2014”)

This publication has been prepared by AHRP for educational and informational purposes only. The information contained in this publication is not
intended and should not be construed as legal advice. Due to the rapidly changing nature of law, AHRP makes no warranty or guarantee
concerning the accuracy or completeness of this content. You should consult with an attorney to review the current status of the law and how it
applies to your circumstances before deciding to take any action.
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We will continue to follow the developments on this topic and provide additional information
as it becomes available. If you have any questions on this topic, please contact:
Gradita Maharani Purukan
gradita@ahrplaw.com
Zaka Hadisupani Oemang
zaka@ahrplaw.com
Tariq Hidayat Pangestu
tariq@ahrplaw.com

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