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Sanctions for Not Reporting Annual Tax Return: 2026 Regulation Update

Arunika Consulting Team

The obligation to report Annual Tax Returns is binding for every active NPWP holder. However, many still ignore it with excuses of “forgetting” or “lazy”. In the Coretax era of 2026, non-compliance detection becomes real-time.

Here are the legal and financial consequences if you default on this obligation.

Administrative Sanctions (Fines)

According to the KUP Law that is still valid and adapted in the HPP Law (Harmonization of Tax Regulations Law), late/non-reporting fines are:

  • Rp100,000 for Individual Annual Tax Returns.
  • Rp1,000,000 for Corporate Annual Tax Returns.

Seems small? Wait. This is just the late reporting fine. There’s still Interest Sanctions if it turns out there is underpaid tax (Article 9 paragraph 2b of KUP Law), whose rate follows the benchmark interest rate (KMK - Minister of Finance Regulation) plus uplift factor.

Criminal Sanctions: Ultimum Remedium

If non-compliance is carried out repeatedly or indicated as intentional (dolus) causing state losses, DGT can apply criminal sanctions.

The threats are no joke:

  • Minimum 6 months to 6 years imprisonment.
  • Minimum 2 times to 4 times the amount of tax payable in fines.

Non-Effective (NE) Status Is Not a Solution

Many think, “Ah, just let it become NE later”. In the new system, NE (Non-Effective) determination is done systematically. If you still have economic transactions (buy assets, salary enters account) but NE status, the system will automatically reactivate your NPWP and collect the remaining obligations.

Haven’t reported taxes for years? Don’t wait for a summons letter to arrive. Consult your case with us for legal resolution strategies that lighten the burden.