SP2DK Case Study: How InCorp Reduced a Tax Correction by 92% Without an Audit

A complex tax issue, such as SP2DK, can create significant exposure to the tax office (the Directorate General of Taxes, or DJP). The authority may identify a discrepancy between a company’s tax reporting and the information available in its system. 

In this case study, InCorp Indonesia (an Ascentium Company) assisted an Indonesian IT services company in responding to an SP2DK. Inside the letter, questions were raised concerning intercompany expenses paid to overseas parties. 

Through a detailed case review, supporting documentation, technical tax analysis, written explanations, and clarification meetings with the DJP, the proposed tax correction was reduced by approximately 92%. 

The matter was resolved during the SP2DK clarification stage without proceeding to a tax audit, tax investigation, or further dispute process. 

Key Takeaways

• The proposed tax correction was reduced by approximately 92%.
• The SP2DK case study was resolved at the SP2DK clarification stage without progressing to a tax audit, tax investigation, objection, or appeal.
• The SP2DK review covered one tax year and focused on intercompany expenses paid to overseas parties.
• Written explanations, clarification meetings, and a key supporting document helped support the company’s position.

SP2DK Case Study Overview 

Item	Details
Client Type	Indonesian IT services company
Company Structure	PT PMDN
Tax Period Reviewed	One tax year
Main SP2DK Issue	Deductibility of intercompany expenses paid to overseas parties
Initial Risk	Significant proposed tax correction
Support Provided	Case assessment, document review, written explanations, technical tax analysis, and clarification meetings
Outcome	Proposed correction reduced by approximately 92%
Escalation Status	Resolved without a tax audit or tax investigation

What Triggered the SP2DK? 

As part of the SP2DK process, the tax office requested confirmation, clarification, and explanations regarding discrepancies between the company’s tax reporting and the data available in the Directorate General of Taxes (DJP) system. The review covered one year of tax, with one of the main concerns involving intercompany expenses paid to overseas parties. 

The issue involved different views on the deductibility of these expenses: 

• The Company’s Position: The expenses were related to its business activities and were therefore considered deductible for tax purposes. 
• DJP’s Position: The DJP took a different view, proposing a significant tax correction. 
• Potential Risk: If the questions were not adequately addressed, the matter could progress beyond the SP2DK clarification stage. 

The company therefore needed to demonstrate that its tax reporting reflected the actual transactions and was supported by relevant explanations, information, and documentation. 

READ MORE:

• Tax Supervision in Indonesia: From SP2DK to Audit and Assessment
• How SP2DK Can Resolve Tax Disputes in Indonesia
• How to Handle SP2DK and Avoid Tax Audits in Indonesia

How InCorp Indonesia Supported the SP2DK Process 

Our tax team started by compiling and reviewing all questions and creating an action plan to address each issue raised in the SP2DK by the DJP. 

Reviewed the Issues and Tax Exposure 

The team compiled and analyzed the questions raised by the DJP, assessed the related tax exposure, and prepared an action plan for each issue. 

Collected the Supporting Documents 

The team coordinated with the company to obtain the relevant data and documentation needed to support its tax position. 

Prepared the SP2DK Response 

Written explanations were prepared with relevant evidence and technical tax analysis based on applicable tax regulations. 

Attended Clarification Meetings 

The team participated in discussions and meetings with the DJP to explain the company’s position, address further questions, and clarify the supporting documents. 

Presented the Key Supporting Document 

During the final meeting, the team presented a key supporting document based on its understanding of the facts and the overall case flow. After reviewing the document, the DJP agreed with the company’s position and withdrew most of the proposed tax exposure.

The Result: Proposed Tax Correction Reduced by 92% 

The matter was successfully resolved during the SP2DK clarification process. 

The result included: 

• An approximately 92% reduction in the proposed tax correction 
• Resolution covering the reviewed tax year 
• No escalation to a tax audit 
• No escalation to a tax investigation 
• No ongoing objection, appeal, dispute, or other active proceeding 

The outcome was achieved through a combination of case analysis, supporting documentation, technical tax explanations, written responses, and direct clarification with the DJP. 

Why SP2DK Should Be Addressed Before It Escalates 

This SP2DK case study shows that a significant proposed tax correction can still be addressed during the clarification stage when the company has a supportable tax position. 

However, a strong response requires more than a general explanation. Companies need to: 

• Understand the specific concerns raised by the tax office 
• Assess the potential tax exposure 
• Review the facts behind each transaction 
• Identify the relevant supporting documents 
• Prepare a clear technical explanation 
• Maintain consistency throughout the written response and clarification meetings 

This is especially important when the SP2DK concerns intercompany or overseas transactions, where the company may need to explain the business purpose of the expenses and support the tax treatment applied. 

Addressing the issues early gives the company a better opportunity to clarify its position. At the same time, the matter remains at the SP2DK stage, before it progresses to a tax audit or other further proceedings. 

Conclusion 

An SP2DK is an opportunity to clarify the company’s tax position, but the response must be timely, accurate, and supported by the right evidence. 

The earlier the issues are assessed, the more time the company has to reconstruct documents, identify exposure, and prepare a consistent explanation. 

Talk to InCorp Indonesia’s tax team to review your SP2DK and determine the most appropriate response strategy. 

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