We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Monday, 03 January 11
TAXATION FOR COAL MINING COMPANIES IN INDONESIA - A TAX EXPERTS VIEW
 COALspot.com - Mrs. Sri Wahyuni Sujono, managing partner of SF Consulting has wrote an exclusive report regarding taxation for coal mining companies in Indonesia for COALspot.com subscribers.
Currently, the conduct of Coal exploration, development and production in Indonesia is regulated by:
1.The Izin Usaha Pertambangan (IUP)/Mining Business License; and
2. The Perjanjian Karya Pengusahaan Pertambangan Batubara(PKP2B)/Coal Contract of Work (CCoW).
Tax Regime for a Coal Mining Company
The IUP company is subject to prevailing Indonesian tax laws. Unlike the CCoW, the IUP regulatory regime does not specify distinct tax rules. A CCoW company taxation terms in the Contract is lex specialis– that is, the terms in the contract override the general tax laws. For example, when certain specific tax rules are set out in a Contract, these tax rules take precedence over the prevailing tax laws. Generally, the tax rules in a Contract reflect those that are in force at the time the contract were signed, although there may be some exceptions. Typically, a Contract fixes the tax rules for the duration of the contract (with the exception of second generation CCAs where they generally follow the prevailing tax regulations).
Income Tax Rate
Under the prevailing Tax Law Regulations, a company is subject to corporate income tax on its net taxable profit. Net taxable profit is calculated based on gross income minus deductible expenses. The prevailing corporate tax rate for 2010 and onward is a flat rate of 25% of net taxable profit. If a Contract stipulates a specific corporate income tax rate, the Contract company may not be entitled to 25% corporate tax.
Income
Gross income usually represents sales of mining products and any other income earned by the mining company.
General Expenses
In general, deductible expenses are expenditures incurred to generate, maintain and collect taxable income and generally include an amount paid or accrued for all expenditures attributable to the company’s operations in a year which typically have a useful life of less than one year. Certain expenditures may not be tax deductible under the prevailing Income Tax law, e.g. donations and benefits-in-kind provided to employees. Some types of benefits-in-kind provided at the mining site may be deductible if the mine is located in a remote area (which is usually the case) and an approval from the DGT is obtained.
Exploration and Development Expenses
Exploration and development expenses may include camp construction, drilling, access road, project communication facilities, etc. On-site exploration expenses are generally deductible in the year the expenses are incurred provided the expenses meet the general deductibility criteria required. Exploration and mine development expenses should generally be capitalized and amortized upon spending rather than production.
Depreciation of Fixed Assets
Fixed assets are categorized into four categories, depending on the nature of the asset and its expected useful life. The rate at which the asset can be depreciated will depend upon the category of the asset. Assets are generally depreciated over 4, 8, 16 or 20 years and taxpayers may apply a diminishing balance or straight line approach to depreciation.
Amortization of Intangible Assets
Intangible assets may include pre-operating costs, patents, rights, licenses, etc. Costs incurred in the acquisition of mining rights with a beneficial life of more than one year should be amortized based on a production unit method, not exceeding 20% per annum.
Tax Losses Carried Forward
Tax losses can be carried forward for up to five years under the Tax Law and are utilized on a first-in-first-out basis. Tax losses cannot be carried back.
Reclamation Reserve
For accounting purposes, a mining company is usually required to maintain a reclamation reserve for environmental management and reclamation work during the contract period and at the end of the life of the mine. The reclamation reserve amount should be tax deductible provided that it is calculated in accordance with the prevailing energy/mineral resources sector laws/regulations. If the actual cost exceeds the reserve, the balance is generally tax deductible.
VAT
Under VAT Law No. 42/2009, coal is not subject to VAT. As a consequence, the input VAT paid to the company’s suppliers are not creditable. Some Contracts may adopt a VAT regime different than the prevailing VAT regulations. For example, there may be provision that Input VAT may be creditable/refundable despite the fact that the coal being produced is not subject to VAT. During the pre-production stage of the Contract, the company shall not have any Output VAT due to there being no delivery of mining product at that point. Therefore, VAT overpayment is likely as the company should pay its Input VAT to vendors for purchases of taxable goods/services. Some Contract companies should collect and pay VAT charged by its vendors (i.e. Output VAT) directly to the State Treasury (act as a VAT collector) as required by the relevant Contract.
Withholding Tax
The Contract company is obliged to withhold income tax from payments of dividends, interest, royalties and most types of services. The Withholding tax rate will depend on the type of service and whether the service provider is a resident or non-resident that stipulated in the tax rules Contract. The general withholding tax rate for services is 2%. The Withholding tax on dividends, interest, royalty paid to Indonesia tax resident is at 15% while for non-resident is set at 20%, though this rate is reduced by most of Indonesia’s double tax avoidance agreements. Some Contracts may provide a reduced Withholding tax rate into nil or 7.5%.
OTHER TAXES
Royalties
Royalties are payable quarterly to the Government based on the actual volume of production according to details set out in the IUP/CCoW. The royalty is tax deductible.
Land and Building Tax
The company is required to pay land and building tax as set out in the IUP/CCoW. Dead rent is an annual charge based on the number of hectares in the Mining Area. The land and building taxes are deductible for income tax.
To download this report click here.
Writer’s Profile :
Mrs. Sri Wahyuni Sujono, graduated with a Business Administration degree from the University of Wisconsin-Madison, USA. She is a certified Tax Attorney, Tax Consultant and holds a Brevet C – the highest working license qualification, and is the managing partner of SF Consulting. Sri also has expertise outside tax consultancy; she is a Chartered Financial Consultant (ChFC) and a qualified lawyer, giving a more holistic outlook and approach to her services.
Sri has had over fifteen years of experience of tax consulting with Arthur Andersen and Ernst and Young Indonesia; three years of which she was a Tax and Business Partner. She is the Vice Chairman of the Taxation Committee at the Indonesian Chamber of Commerce (KADIN), the Head of Foreign Affairs in the Indonesian Tax Consultant Association (IKPI) and sits in the Board of Experts in the Indonesian Chinese Association (INTI).
Disclaimer: This report has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this report without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this report, and, to extent permitted by law. SF Consulting and COALspot.com, its directors, members, employees, agents do not accept or assume any liability, responsibility or duty of care of any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this report or for any decision based on it.
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 02 February 11
BAYAN TO SUPPLY COAL TO TP UTILITIES LTD
Insider Stories has reportd that, Indonesia's one of the leading coal miner PT Bayan Resources Tbk (BYAN) owned by businessman Dato' Low Tuck ...
Wednesday, 02 February 11
HUGE TONNAGE OVERSUPPLY LOOMING FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market taking another dive yesterday, to just over 1,000 points (1,084), losing more than 2% on the day, it’s more than obvi ...
Monday, 31 January 11
S. SUMATRA COAL RAILWAY TO BE COMPLETED ON SCHEDULE - THE JAKARTA POST
The Jakarta Post reported that, despite land acquisition problems, state coal mining company PT Bukit Asam is upbeat that the development of a railw ...
Monday, 31 January 11
COAL MINER PTBA TO DRIVE OUTPUT WITH ACQUISITIONS - THE JAKARTA GLOBE
The Jakarta Globe reported that, State coal company Perusahaan Tambang Batubara Bukit Asam said its output would increase 34 percent to 17.6 million ...
Saturday, 29 January 11
PRESSURE ON SHIPPING MARKET MAY CONTINUE UNTIL MID FEBRUARY 2011
COALspot.com - The BDI continues to drop and saw a drop of about 5 pct this week closing at 1370 points.
In May 2010 the BDI touched 4,209 ...
|
|
|
Showing 5401 to 5405 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
|
| |
| |
|
