Compliance
Indonesia’s Interest Rates for Tax Sanctions & Refunds: What the New Decision Means
The Menteri Keuangan’s decree dated 31-August-2026 sets new monthly interest rates for penalties and refunds—understand the changes and plan accordingly.
By NomadicTax Research Team • 5-8 min read • September 9, 2026
## Overview of the New Regulation
The Indonesian government, through **Keputusan Menteri Keuangan (KMK) No. 40/MK/EF.2/2026**, effective **1 September 2026**, updated the **monthly interest rates** used for calculating administrative penalties (*sanksi administratif*) and interest paid as refunds (or “rebates”) in tax law. ([stats.pajak.go.id](https://stats.pajak.go.id/id/peraturan/tarif-bunga-sebagai-dasar-penghitungan-sanksi-administratif-berupa-bunga-dan-pemberian-58?utm_source=openai)) Rates vary depending on which paragraph of the law is applicable.
## Specific Rates & Legal Provisions
| Legal Provision | Function | New Monthly Rate |
|---|---|---|
| Pasal 19 ayat (1-3) | Late tax payments, etc. | **0.60%** |
| Pasal 8 ayat (2,2a), 9(2a,2b), 14(3) | Late filings or corrections | **1.02%** |
| Pasal 8 ayat (5) | Certain tax base adjustment delays | **1.43%** |
| Pasal 13 ayat (2,2a) | Disallowed/taxable income adjustments | **1.85%** |
| Pasal 13 ayat (3b) | Severe defaults or missing documents | **2.27%** |
| Imbalan Bunga (refunds, overpayments etc.) per certain articles | Refunds owed to taxpayer | **0.60%** |
## What This Means in Practice
- **For businesses:** Late filings, underreported income, missing documentation can lead to significantly higher monthly penalties. For instance, missing documents causing a Pasal 13(3b) violation brings you into the highest bracket at 2.27% per month.
- **For individuals:** If you're due a refund under qualifying provisions, expect 0.60% per month interest until settlement.
- **Implications for cash flow:** Penalty interest compounds; even small delays can balloon. If your business projects earnings or refunds, revise your timelines in light of these updated rates.
## Actionable Advice
- Prioritize meeting deadline obligations: filings, payments, documentation completeness.
- For contestable adjustments (e.g., income adjustments), negotiate or apply remedies early to avoid being placed in higher interest tiers.
- Ensure accurate forecasts and provision for penalties in financial statements—especially during audit exposure periods.
**Conclusion:** Indonesia’s August 2026 decree underscores stricter penalties for delayed compliance and strengthens incentive for prompt action. Taxpayers should update internal policies to account for higher financial risks associated with non-compliance.