Conditions and Implementation of a Special Power of Attorney in Tax Matters

A Special Power of Attorney to exercise the rights and obligations of a tax payer is necessary where the tax payer chooses to utilize the service of others in completing any tax related business. However, there are strict conditions with respect to who may be granted the special power of attorney. The legal basis for this Minister of Finance Regulation is Article 32(3a) of Law No. 6 of 1983 as finally amended by Law No. 2007 and Article 31 of Government Regulation No. 80 of 2007.

Simply the attorney-in-fact is any person who satisfies the conditions to be granted the special power of attorney. The attorney-in-fact must possess a tax payer number, already submitted their most recent tax return, satisfy all the relevant prevailing legal provisions, and be in possession of a special power of attorney granted by the tax payer they are to act on behalf of. The standard format of the Special Power of Attorney is Attachment I to this Regulation.

Generally, attorneys-in-fact are to be accredited tax consultants. However, a tax payer can grant a special power of attorney to an employee with some restrictions. The restrictions relate to income during the relevant financial year. For individuals this is not to exceed gross income of IDR 1.4 billion and for businesses this limit is IDR 2.4 billion.

It must be noted that an attorney-in-fact that does not satisfy the requirements can not act on behalf of the tax payer even where the special power of attorney has been granted. Once granted a power of attorney the attorney-in-fact cannot grant the special power of attorney or delegate any powers under the special power of attorney to another.

In the event that the attorney-in-fact breaches the prevailing laws and regulations, then the special power of attorney is revoked and the tax payer must fulfill their own obligations or appoint a new attorney-in-fact.

Any additional regulations required to facilitate implementation of this Regulation will be in the form of Director General of Taxation Regulations.

This Regulation has been in force since 6 February 2008.