As the 2025 financial year comes to a close, companies are entering a critical period of preparing documentation and financial data ahead of annual tax filing. Timely preparation not only ensures compliance with Indonesian tax regulations but also helps businesses avoid unnecessary stress as filing deadlines draw closer.
Here’s what your company should finalize before entering the 2026 reporting cycle:
- Review and Reconcile Your 2025 Financial Records
Before determining a final tax position, all transactions for 2025 should be recorded, verified, and reconciled. This includes aligning the general ledger with bank statements, outstanding balances, and supporting documentation. Resolving discrepancies early helps prevent adjustments after the tax return has been completed.
- Validate Your VAT (PPN) Invoices
Verify that all VAT invoices, both input and output, are properly issued, received, and recorded in the system and e-Faktur. Address any missing invoices, incorrect data, or unmatched values before year-end to avoid corrections or potential follow-up from tax authorities during filing.
- Finalize Your Financial Statements
Annual financial statements serve as the basis for Corporate Income Tax Return (SPT Badan). Whether audited or unaudited, they should be completed with proper disclosures, reconciliations, and supporting schedules. Verifying records early ensures consistency between accounting data and what’s reported in the tax return.
- Compile Tax Withholding & Payment Evidence
Gather all supporting documents related to taxes, such as PPh 21, PPh 23, or any other applicable taxes, along with proof of tax payments. These records are required to validate creditable taxes and support the figures presented in the annual return. Ensuring completeness now helps avoid mismatches during submission.
- Update Employee Data for PPh 21
Review and update employee information, such as tax IDs, marital status, allowances, compensation changes, or applicable natura treatment, to ensure final year-end PPh 21 calculations are accurate. Proper payroll data management helps minimize corrections and ensures employee tax reporting reflects the correct entitlements and obligations.
- Analyze Potential Under- or Over-Payments
Conduct a preliminary year-end tax calculation to identify any potential underpayments or overpayments. This helps management prepare for potential payments, compensations, or refund processes, avoiding unexpected impacts on early-year cashflow.
- Prepare Corporate and Individual Annual Tax Returns
Begin gathering and organizing documents needed for both the Corporate Income Tax Return (SPT Badan) and the Individual Income Tax Returns (SPT Orang Pribadi) for directors or shareholders. Preparing early gives teams enough time to confirm accuracy, complete attachments, and resolve administrative issues well before filing deadlines.
- Consider Tax Planning for 2026
With the financial year ending, companies should evaluate opportunities and exposures that may influence the next period. This may include reviewing the effectiveness of existing policies, identifying potential efficiencies, and assessing changes in tax regulations that could impact operations in 2026. Early planning allows improvements to be implemented from the start of the new fiscal year.
NEED SUPPORT COMPLETING YOUR YEAR-END CHECKLIST?
Moores Rowland Indonesia is ready to assist with year-end reconciliation, VAT invoice verification, preparation of annual tax returns (SPT), and proactive tax planning to support a smooth and compliant reporting process.
Reach out to Moores Rowland Indonesia today to ensure your 2025 year-end checklist is completed on time and in compliance with Indonesian tax regulations.
