Does a PT PMA need an audit?

Foreign owners of Indonesian companies frequently know their tax filings are handled and have no idea whether their accounts are audited, or whether they need to be.

When an audit is mandatory

Indonesian company law requires an audit of annual financial statements where a company meets defined criteria — broadly relating to asset size, turnover, the nature of the business, public fundraising, or specific regulatory sectors.

Thresholds change. Confirm the current criteria with a local accountant rather than relying on a figure someone mentioned years ago.

A company below the thresholds does not require an audit. It still requires financial statements prepared to Indonesian standards, and it still files an annual corporate tax return with those statements attached.

What "the accounts exist" actually means

A surprising number of small PT PMAs operate with a bookkeeper producing enough to file a tax return and nothing that functions as a proper set of accounts.

That is adequate until it is not, and the moments it stops being adequate are predictable:

Selling the company. A buyer's lawyer and accountant read the accounts. Weak records, unexplained balances and unsupported transactions become findings, and findings become discounts or a dead transaction.

A tax review. Positions taken in returns have to be supportable from the underlying records.

Distributing profit. A dividend requires the accounts to support it and a shareholder resolution authorising it. A director transferring company funds to a personal account abroad is not a distribution, and it creates problems at audit and at sale.

Borrowing. A bank lending to a PT PMA wants audited accounts and a trading history.

Losing a director or a partner. Whoever picks it up needs records that make sense.

What the annual cycle actually involves

Bookkeeping through the year.

Financial statements prepared to Indonesian standards after year end.

An audit, where required.

The annual corporate tax return, with statements attached.

The annual shareholder meeting (RUPS) approving the accounts, minuted properly. This is a company law requirement that single-shareholder companies routinely forget, and it is part of what a buyer reviews.

Quarterly LKPM investment activity reports, which are separate from tax and genuinely enforced.

What it costs

A small, low-activity PT PMA with few transactions and no staff typically runs USD 2,000 to USD 5,000 a year for bookkeeping, monthly filings, LKPM and the annual return.

With staff, VAT registration, meaningful transaction volume and an audit requirement, USD 6,000 to USD 15,000 and upward depending on complexity.

This is the number that makes a company material at USD 300,000 of property value and immaterial at USD 1 million. It is also permanent — it does not stop because the company stopped trading.

Choosing an accountant

Not the cheapest. The cost of a bad one is penalties, a failed licence renewal and a company that cannot be sold cleanly.

Ask what is in scope, specifically: bookkeeping, monthly filings, LKPM, the annual return, financial statements, audit coordination, corporate secretarial work including the RUPS, and responding to tax office correspondence. That last one is commonly excluded and commonly needed.

Ask for a monthly reporting pack you can actually read, not a folder of filings.

Ask who is accountable if a deadline is missed.

Coretax and the strictness

Indonesian tax administration now runs through Coretax, which matches data strictly and rejects rather than queries.

A name spelled differently between documents, an address that does not reconcile, an unlinked NPWP or a missing NITKU — the business unit identifier issued per registered place of business — produces a failed filing rather than a phone call.

Companies registered before the change frequently have a NITKU gap. Have your accountant confirm the registration data is clean rather than assuming it migrated correctly.

The dormant company

A PT PMA that stops trading does not stop filing.

Monthly returns, quarterly LKPM and the annual return remain due, with penalties accumulating against a company nobody is watching. The arrears must be cleared before it can be dissolved.

If it has served its purpose, close it deliberately, keep it compliant with someone appointed, or sell it. Abandoning it is the most expensive option and it is the one people take by default.