Director General of Taxation Deactivates PKP Status Effective 22

The Directorate General of Taxation issued Regulation No. PER‑19/PJ/2025, effective 22 October 2025. The rule authorises the deactivation of Taxable Entrepreneur (PKP) status for taxpayers that do not meet defined criteria.

The criteria include three consecutive months without withholding or collecting tax, failure to file the annual Income Tax (PPh) return, and failure to file monthly VAT (PPN) returns for three months or six periods within a calendar year. Taxpayers with arrears of at least IDR 250 million (for KPP Pratama offices) or IDR 1 billion (for other KPP offices) are also subject to deactivation.

Losing PKP status removes the right to issue Tax Invoices, potentially disrupting business transactions. The head of the taxpayer’s registered Tax Service Office (KPP) will implement the deactivation mandate under the Director General’s direction.