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.
|
|
Tuesday, 04 January 11
BALI, INDONESIA HOST OF WORLD RENEWABLE ENERGY AND ENERGY EFFICIENCY CONFERENCE
Press Release - Indonesian Renewable Energy Society (METI – IRES) has launched the plan for organizing the international gathering ...
Tuesday, 04 January 11
DRY BULK MARKET TO RANGE BETWEEN 1,700 AND 2,600 POINTS IN THE FIRST QUARTER OF 2011, ANALYSTS SAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As we entered 2011, ship owners and analysts, as well as shipbrokers are looking into their “crystal balls” to try to decode the dry bul ...
Sunday, 02 January 11
JAISWAL TO SEEK COAL MINES IN AFRICA - HINDUSTAN TIMES
Coal Minister Sriprakash Jaiswal will talk with his counterparts in South Africa and Mozambique during his visit from January 5 to secure coal asset ...
Saturday, 01 January 11
COAL PRODUCTION EXPECTED TO EXCEED 340 MILLION TONS THIS YEAR - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal miners expect to produce 340 million tons of coal in 2011, an increase of 23 percent from 275 millio ...
Friday, 31 December 10
STC TO FINALIZE 12 MILLION MT OF COAL IMPORT CONTRACT TO TWO INDIAN AND A DUBAI BASED COAL TRADER - SOURCES
COALspot.com - World's single largest coal import tender floated by STC on behalf of state utility NTPC to finalize its suppliers or already finali ...
|
|
|
Showing 5456 to 5460 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- The University of Queensland
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- White Energy Company Limited
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Planning Commission, India
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
|
| |
| |
|
