Indonesia’s Supreme Court of Indonesia has taken a decisive step toward legal certainty in tax-crime enforcement through the issuance of Regulation No. 3 of 2025 (“Regulation 3/2025”), which entered into force on 23 December 2025.
The regulation introduces a unified procedural framework for handling tax-related criminal cases—long a grey area that produced inconsistent interpretations across courts and investigators. Importantly, the new rules apply not only to individuals but also to corporations, including complex group structures.
Why This Matters
Tax enforcement in Indonesia has moved beyond administrative corrections. Regulation 3/2025 confirms that criminal procedures may run independently of administrative ones, and that asset freezing, seizure, and even trials in absentia are now firmly anchored in procedural law.
Key Highlights Under Regulation 3/2025
1. Expanded Scope of Liability
➤ Liability applies to individuals and corporations, regardless of taxpayer registration status
➤ Corporate liability may arise from:
o Orders, participation, assistance, or inducement
o Proven intent (mens rea) or negligence
o Benefits derived from the offense
➤ Directors, commissioners, controlling persons, and decision-makers may be held personally liable
➤ Bankruptcy, dissolution, resignation, or death of management does not extinguish corporate criminal liability
2. Administrative vs. Criminal Proceedings
Regulation 3/2025 draws a sharp distinction:
➤ Administrative violations → administrative sanctions
➤ Criminal acts → criminal prosecution
However, these processes do not need to wait for each other. Criminal cases may proceed even while administrative processes are ongoing.
3. Asset Blocking and Seizure
Investigators are empowered to:
➤ Freeze assets via formal requests to banks or custodians
➤ Seize assets for:
o Evidence (documents, records)
o Recovery (bank accounts, securities, receivables, immovable property)
Court approval is required, although urgent seizures of movable assets may be conducted first and approved retroactively.
4. Payment of Principal Tax & Sanctions
Settlement of tax liabilities may occur:
➤ During investigation
➤ After referral but before charges
➤ After charges but before verdict
Key implications:
➤ Individuals may avoid imprisonment if payment occurs after charges
➤ Corporations still face fines, though settlements mitigate penalties
➤ Judges must consider payments when sentencing
Failure to pay fines post-verdict may result in asset auction or substitute imprisonment.
5. In Absentia Trials & Death of Defendants
Courts may:
➤ Proceed in absentia if defendants ignore lawful summons
➤ Reject legal counsel appearing solely for absent defendants
➤ Allow appeals even after in absentia verdicts
If a suspect or defendant dies:
➤ The State Attorney may pursue claims against heirs
➤ Seized assets may still be forfeited if state loss is proven by at least two valid pieces of evidence
Key Takeaways for Businesses
Regulation 3/2025 sends a clear signal: tax compliance is now inseparable from criminal risk management.
Companies—especially PMAs and corporate groups—should:
✔️ Strengthen internal tax governance
✔️ Maintain audit-ready financial documentation
✔️ Reassess exposure from past tax positions
✔️ Prepare directors and management for personal liability risks
How Seven Stones Can Assist
Seven Stones supports clients through:
👉 Tax-risk mapping and exposure reviews
👉 Corporate governance and director-liability assessments
👉 Litigation preparedness and documentation audits
👉 Strategic coordination with tax counsel, investigators, and regulators
Early compliance is no longer optional—it is defensive strategy.