Directory of Decisions of the Supreme Court of the Republic of Indonesia

 

DECISION

Number 1806/B/PK/Pjk/2021

FOR THE SAKE OF JUSTICE BASED ON THE ALMIGHTY DEITY OF THE SUPREME COURT

examining tax cases on judicial review has decided in the case:

DIREKTUR JENDERAL OF TAX, domiciled at Jalan Jenderal Gatot Subroto Number 40-42, Jakarta;

In this case represented by the attorney Teguh Budiharto, Indonesian citizenship, position Director of Objections and Appeals, Directorate General of Taxes, and friends, based on Special Power of Attorney Number SKU-4478/PJ/ 2020, dated 27 October 2020;

Reconsideration Applicant;

Opponent

PT    HINO    MOTORS    MANUFACTURING      INDONESIA,

located at Wisma Indomobil II, Jalan MT Haryono Kaveling 09, Bidara Cina, Jatinegara, East Jakarta, represented by Satoshi Kajita, Director;

Furthermore, in this case represented by the attorney Mulyana, S.H., LL.M., and friends, Indonesian citizenship, Advocates at the Mochtar Karuwin Komar Law Firm, with address in Jakarta, based on a Special Power of Attorney dated 4 December 2020;

Respondent of the Judicial Review;

The Supreme Court;

Read the relevant documents which form an integral part of this judgement;

Considering, that based on the relevant letters, it is evident that the Petitioner for Review has filed a petition for review of the Tax Court Decision Number PUT- 011133.15/2018/PP/M.VIIIB of 2020, dated 29 July 2020, which has permanent legal force, in his case against the Respondent for Review with the following appeal petitum:

1.  Declare that the appeal filed by the Appellant is admissible because it fulfils all formal requirements;

2.  Grant the Appellant's appeal in its entirety. Therefore, the tax calculation according to the Appellant's calculation should be as follows:

 

Description

Originally

(Rp)

1. Net income

(135.541.085.571,00)

2. Loss Compensation

0,00

3. Taxable Income

(135.541.085.571,00)

4. Income Tax Payable

0,00

5. Tax Credits

108.339.355.610,00

6. Income Tax Under / (Over) Paid

(108.339.355.610,00)

7. Administrative Sanctions

0,00

8. Amount of income tax accrued/(over) paid

(108.339.355.610,00)

Considering, that upon the appeal, the Appellant filed a letter of appeal description dated 13 February 2019;

Considering, that the ruling of the Tax Court Decision Number PUT- 011133.15/2018/PP/M.VIIIB of 2020, dated 29 July 2020, which has permanent legal force is as follows:

- Granting entirely the Appellant's appeal against the Decision of the Director General of Taxes Number KEP-00917/KEB/WPJ.19/ 2018, dated 28 September 2018, concerning Taxpayer's Objection to the Income Tax Overpayment Assessment Letter Number 00087/ 406/15/092/17, dated 19 July 2017, Tax Year 2015 as corrected by the Decision of the Director General of Taxes Number KEP-00058/WPJ.19/KP.0203/2017, dated 23 November 2017, regarding the Correction of Tax Assessment Letter of Overpayment of Income Tax by Position, in the name of PT Hino Motors Manufacturing Indonesia, NPWP 01.060.143.3-092.000, located at Wisma Indomobil II, Jalan MT Haryono Kav 09, Bidara Cina, Jatinegara, East Jakarta 13330, so that the calculation becomes as follows:


Description

Total

(Rp)

1. Net Income

(315.541.085.571,00)

2. Loss Compensation

0,00

3. Taxable Income

(315.541.085.571,00)

4. Income Tax Payable

0,00

5. Tax Credits

108.339.355.610,00

6. Income Tax Under/(Over) Paid

(108.339.355.610,00)

7. Administrative Sanctions

0,00

8. Amount of income tax accrued/(excess)

paid

(108.339.355.610,00)

Considering, that after this final decision was notified to the Applicant for Reconsideration on 24 August 2020, then the Applicant for Reconsideration filed a written request for reconsideration at the Registrar of the Tax Court on 11 November 2020, accompanied by the reasons which were received at the Registrar of the Tax Court on 11 November 2020;

Considering that the petition for review along with its reasons have been notified to the opposing party carefully, filed within the time and in the manner prescribed by Law Number 14 of 1985 concerning the Supreme Court as amended by Law Number 5 of 2004 and the second amendment by Law Number 3 of 2009, in conjunction with Law Number 14 of 2002 concerning the Tax Court, the petition for review is formally acceptable;

Considering, that based on the memory of the review received on 11 November 2020, which is an integral part of this Decision, the Applicant for Reconsideration requests the Supreme Court to give the following decision:

1.  Receive and grant the petition for review of the Tax Court Decision Number PUT-011133.15/2018/PP/M.VIIIB Year 2020, dated 29 July 2020, requested by the Petitioner for Reconsideration in its entirety;

2.  Cancel the Tax Court Decision Number PUT- 011133.15/2018/PP/M.VIIIB of 2020, dated 29 July 2020, related to the dispute a quo, because the court decision has been made contrary to the provisions of the applicable tax laws and regulations;

3.  By adjudicating alone:

3.1.      Reject the Respondent's appeal;

3.2.      Stating that the Decree of the Director General of Taxes Number KEP-00917/KEB/WPJ.19/2018, dated 28 September 2018, concerning Taxpayer's Objection to Income Tax Overpayment Assessment Letter Number 00087/406/15/092/17, dated 19 July 2017, Fiscal Year 2015 as corrected by Decree of the Director General of Taxes Number KEP-00058/WPJ.19/KP.0203/2017, dated 23 November 2017, regarding the Correction of Tax Assessment Letter of Overpayment of Income Tax by Position, on behalf of PT Hino Motors Manufacturing Indonesia, NPWP 01.060.143.3-092.000, located at Wisma Indomobil II, Jalan MT Haryono Kav 09, Bidara Cina, Jatinegara, East Jakarta 13330, is in accordance with the provisions of the applicable tax laws and regulations and therefore has been valid and legally enforceable;

3.3.      Stating that the Income Tax Overpayment Assessment Letter Number 00087/406/15/092/17, dated 19 July 2017, Fiscal Year 2015 as corrected by the Decree of the Director General of Taxes Number KEP- 00058/WPJ.19/KP.0203/2017, dated 23 November 2017, concerning the Correction of the Income Tax Overpayment Assessment Letter by Position, in the name of PT Hino Motors Manufacturing Indonesia, NPWP 01.060.143.3-092.000, located at Wisma Indomobil II, Jalan MT Haryono Kav 09, Bidara Cina, Jatinegara, East Jakarta 13330, is in accordance with the provisions of the prevailing tax laws and regulations and is therefore valid and legally enforceable;

3.4.      Order the Respondent to pay all costs in this case;

Or if the Panel of Judges of the Supreme Court who examines and hears this request for Reconsideration is of another opinion, then please give the fairest possible decision (ex aequo et bono);

Considering, that against the memory of the review, the Respondent for Reconsideration has submitted a counter-memory for reconsideration on 21 December 2020, which in essence the decision of the Tax Court is correct and correct and rejects the request for reconsideration from the Petitioner for Reconsideration;

Considering, that against the reasons for the review the Supreme Court is of the opinion:

-          That the tax court's decision is correct and in accordance with the prevailing laws and regulations;

-          That the correction of Corporate Income Tax for Fiscal Year 2015 with a positive correction on the positive fiscal adjustment item amounting to Rp127,749,174,678.00 cannot be maintained, because the positive correction on the positive fiscal adjustment item that has been calculated by the Appellant to its affiliated parties has fulfilled the principles of reasonableness and business prevalence;

-          The selection of the Appellant's four comparability factors in terms of characteristics and function is closer to the Appellant's business function. The five-year multi-year period (2011-2015) was appropriate because using a three-year multi-year period as the Appellant did was not appropriate because in 2013-2014 the economy in the automotive sector was in a state of declining sales;


-          The fact that the impact of foreign exchange rates (forex adjustment) in 2013 did not affect the Appellant's condition because most of the Appellant's companies were located in China where the fluctuations in the CYN economy did not have a major effect;

-          It is evident in the Calculation of Return on Total Cost (ROTC) of the Appellant and the comparable companies as well as the calculation of the comparable interquartile range for a five-year multi-year is as follows:

 

Description

ROTC TNMM

(Appellant)

Quartile Range

ROTOC Comparison Data

A. ROTC calculation with 11 comparators (in accordance with TP Doc 2015, company comparable manufacturing units/trucks and buses and spare parts)

 

3,72%

 

2,64% - 5,31%

B. ROTOC calculation with 4 comparators (in accordance with TP Doc 2015, unit/truck and bus manufacturing comparator companies only)

 

3,72%

 

1,61% - 4,73%

C. ROTOC calculation with 6 comparators (4 manufacturing unit/truck comparators received in TP Doc and 2 comparators new information received by the Appellant)

 

3,72%

 

2,01% - 4,24%

D. ROTOC calculation with 13 comparators (11 comparators used in TP Doc 2015 and 2 Appellants of the Appellant)

 

3,72%

 

2,22% - 5,19%

-      That based on the transfer pricing analysis with 11,4,6 and 13 comparators as a whole, the weighted average value of the Appellant's ROTC for 2011-2015 of 3.72% was always between the weighted average inter quartile ranges of the comparable companies for 2011-2015. Thus, it can be concluded that the Appellant's controlled transactions were in accordance with the arm’s length principle;

Based on the above considerations, the request for reconsideration filed by the Applicant for Reconsideration is unwarranted and must be rejected;

Considering that because the request for reconsideration is rejected, the court costs in this review must be borne by the Applicant for Reconsideration;

Taking into account the articles of Law No. 48 of 2009 on Judicial Power, Law No. 14 of 1985 on the Supreme Court as amended by Law No. 5 of 2004 and the second amendment by Law No. 3 of 2009, Law No. 14 of 2002 on the Tax Court, and related laws and regulations;

JUDGE:

1.     Reject the request for reconsideration from the Applicant DIREKTUR JENDERAL PAJAK;

2.     To order the Applicant for Reconsideration to pay the costs of the case under review in the amount of Rp2,500,000.00 (two million five hundred thousand Rupiah);

Thus decided in a deliberation meeting of the Panel of Judges on Tuesday, 13 July 2021 by Dr. Irfan Fachruddin, S.H., C.N., Supreme Court Judge appointed by the Chief Justice of the Supreme Court as Chairman of the Panel, together with Dr. H. Yodi Martono Wahyunadi, S.H., M.H., and Dr. H. Yosran, S.H., M.Hum., Judges of the Supreme Court as Members, and was pronounced in a session open to the public on the same day by the Chairman of the Tribunal in the presence of the said Member Judges, and Dewi Eliza Kusumaningrum, S.H., M.H., Substitute Registrar without the presence of the parties.

 

Member of the Tribunal:                                    Chairman of the Tribunal,

 

 

ttd.                                                                 ttd.

 

 

 

Dr H. Yodi Martono Wahyunadi, S.H., M.H. Dr Irfan Fachruddin, S.H., C.N.

 

 

ttd.

 

 

 

Dr H. Yosran, S.H., M.Hum.


Substitute Registrar,

 

 

ttd.

 

 

 

Dewi Eliza Kusumaningrum, S.H., M.H.

 

 

Costs:

1.     Stamp                 Rp     10.000,00

2.     Editorial              Rp     10.000,00

3.     PK Administration IDR 2,480,000.00

4.     Total                   IDR 2,500,000.00

 

For Supreme Court of Indonesia copies on behalf of the Registrar

Junior Registrar of State Administration,

 

 

 

 

 

Simbar Kristianto, S.H. NIP 19620202 198612 1 001