Understanding the Definition and Scope of Civil Review

Disputes between taxpayers and tax authorities are frequently resolved through quite a lengthy process. Starting from a tax assessment as an audit product, the dispute resolution process is carried out, ranging from an objection, appeal, to civil review.

Pursuant to Article 77 paragraph (1) of Law No. 14 of 2002 concerning the Tax Court (Tax Court Law), Tax Court decisions are final decisions and have permanent legal force (incracht). However, the Tax Court Law stipulates other legal remedies that may be undertaken.

In this case, the parties to the dispute may apply for a civil review of a Tax Court decision to the Supreme Court. This is stipulated under Article 77 paragraph (3) of the Tax Court Law. As such, what does civil review refer to?

The Definition of Civil Review

Civil review is one of the duties of the Supreme Court outlined in Article 28 paragraph (1) subparagraph c of Law No. 14 of 1985 concerning the Supreme Court as last amended by Law No. 3 of 2009 (MA Law) which reads:

“The Supreme Court shall have tasks and authorities to examine and decide upon petition for civil review for the absolute court’s judgment.”

The Tax Court Law does not clearly formulate the definition of civil review. However, the definition of civil review can be found in Supreme Court Regulation No. 7 of 2018 concerning Procedures for the Application for a Civil Review of Tax Court Decisions (PERMA No. 7/2018).

Pursuant to Article 1 Number 3 of PERMA No. 7/2018, the application for civil review is an extraordinary legal remedy to the Supreme Court to examine and reconsider the decision of the Tax Court.

The definition in the PERMA is also in line with the Code of Criminal Procedures Law (KUHAP) Chapter XVIII of Law No. 8 of 1981 which mentions civil review as one of the extraordinary legal remedies in Indonesia’s judicial system.

Simply put, civil review or usually abbreviated to PK in the tax context, refers to a legal remedy that can be taken by the parties to a dispute (taxpayers and tax authorities) to review a Tax Court decision that has permanent legal force.

Civil review is usually undertaken because both the taxpayer and the tax authorities are not satisfied with the appeal decision issued by the Tax Court. Therefore, the Tax Court Law gives rights to the parties to a dispute to fight for their rights even though the court decision has permanent legal force.

This also aims to guarantee human rights (HAM) to the maximum extent pursuant to Article 28D of the 1945 Constitution which reads, “Everyone person has the right to recognition, guarantees, protection and fair legal certainty and equal treatment before the law.”

The Scope of Civil Review

In respect of the scope of civil review within the tax court, the Tax Court Law stipulates that civil review may be filed against tax court decisions.

Pursuant to Article 80 paragraph (1) of the Tax Court Law, Tax Court decisions may be in the form of rejected, granted in part or in whole, an increase of taxes to be paid, the rectification of typos and/or miscalculations and/or cancellation.

In addition, it should be underlined that within the tax court, pursuant to Article 80 paragraph (2) of the Tax Court Law, the application for civil review of a decision may only be filed once for every decision.

This provision is also in line with Article 268 paragraph (3) of the Coe of Criminal Procedures which states that a request for a civil review of a decision can only be filed once. The Constitutional Court annulled Article 268 paragraph (3) of the Code of Criminal Procedures which limited the filing of a civil review to only once. As a result, civil reviews may be filed many times.

However, the Supreme Court finally issued the Supreme Court Circular (SEMA) No. 7 of 2014 concerning the Submission of Applications for Civil Review in Criminal Cases. This SEMA stipulates that a civil review can only be filed once. This SEMA also overrides the decision of the Constitutional Court. This implies that the Supreme Court has confirmed that a civil review can only be filed once.

In the context of taxes, the mechanism for filing a civil review only once is understandable. This is, among others, intended to guarantee legal certainty and considers cash flow for taxpayers. In addition, this provision is also intended to maintain the efficiency of tax collection as the largest source of the State Budget (APBN).