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.
|
|
Thursday, 13 January 11
DRY BULK RATES HIT NEW MULTI-MONTH LOWS ON AUSTRALIAS FLOODS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Floods in Australia’s Queensland has seriously disrupted coal shipments and together with a flood of vessels has pushed freight rates for dry ...
Wednesday, 12 January 11
BULKER DELIVERIES WEIGHING IN ON FREIGHT RATES KEEPING SENTIMENT ON A NEGATIVE MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of new buildings still hitting the water has caught up for good with the freight market, with capesizes unable to weather the storm. With r ...
Tuesday, 11 January 11
SUPRAMAX TRIP VIA INDONESIA TO INDIA US$ 8,000 PER DAY
Despite continued growth in the bulk trades, the delivery of new vessels is beginning to take its toll. The BDI continued its decline, finishing las ...
Tuesday, 11 January 11
DRY BULK MARKET REACHES NEW LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s benchmark index, the Baltic Dry Index (BDI) lost further ground in the beginning of the week, following the trend of the ...
Monday, 10 January 11
MINING INVESTMENT TARGET TOO LOW - TEMPO INTERACTIVE
TEMPO Interactive reported that, the Indonesian Mining Association’s executive director, Priyo Pribadi, believes the government’s invest ...
|
|
|
Showing 5431 to 5435 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- The University of Queensland
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
|
| |
| |
|
