Account Receivable Flow Test to Prove Real Sales Case: A Study Case of a Tax Court Decision in Indonesia

Muhammad Rifky Santoso

doi:10.32535/ijafap.v4i2.1027

Abstract

The data in the financial statements and the corporate tax return must be supported by accurate and valid evidence. When the Directorate General of Taxation (DGT) as a tax authority in Indonesia conducts a tax audit by an account receivable flow test (ARFT), the taxpayer net sales can be corrected to be larger due to a lack of evidence. This paper applied a case study of a tax court decision in Indonesia by a desk-based literature study. The DGT audited a taxpayer and produced a stipulation of additional taxable income. The taxpayer did not agree with the provision and the taxpayer filed an appeal to the tax court. This paper finds the taxpayer’s unorganized and inaccurate bookkeeping leads the judges to reject the taxpayer’s appealing.

Highlights

In conducting a company tax audit, tax auditors must ensure that reported company sales or revenues are correct
From the results of the tax audit, several corrections led to a dispute between the Directorate General of Taxation (DGT) and the taxpayer, one of which is the addition of sales income
After examining on the taxpayer's documents in the form of general ledger, sales books, bank/cash books, and bank statements, the DGT made positive fiscal corrections so that the taxpayer's net sales have increased by Rp. 4,385,705,313

Summary

Introduction

In conducting a company tax audit, tax auditors must ensure that reported company sales or revenues are correct. One of the usable test methods is the account receivable flow test, the formula of which used by tax auditors in Indonesia was regulated in the Directorate General of Taxation Circular Number SE-65/PJ/2013 concerning Guidelines for the Use of Audit Methods and Techniques (Directorate General of Taxation, 2013). Examining this formula can lead to disputes between tax authorities and taxpayers due to differences in the understanding and purpose of the rupiah value used in the formula. From the results of the tax audit, several corrections led to a dispute between the DGT and the taxpayer, one of which is the addition of sales income

Methods

Results

Conclusion