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, 17 November 10
DRY BULK MARKET LOOKING FOR SUPPORT IN COAL TRADES AND INDIAN IRON ORE EXPORTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Nikos Roussanoglou, Hellenic Shipping reported that, the dry bulk market is lacking support to end its 13-day slide, as evidenced by Monday’s ...
Tuesday, 16 November 10
'VALLAR PLC' TO BECOME 'BUMI PLC' POST DEAL - THE JAKARTA POST
The Jakarta Post reported that, The United Kingdom’s Vallar Plc will change its name to Bumi Plc following a cash and stock transaction with t ...
Tuesday, 16 November 10
ROTHSCHILD BUYS INDONESIAN COAL STAKES FOR $3 BILLION - BLOOMBERG
Bloomberg reported that, Nathaniel Rothschild, the only son of U.K. financier Jacob Rothschild, agreed to invest $3 billion in two Indonesian coal c ...
Sunday, 14 November 10
THE FREIGHT MARKET CONTINUED ITS DOWN FALL - VISTAAR SINGAPORE
COALspot.com: The freight market continued its down fall with BDI down by 7.29 pct and closed at 2,313 points.
All other segments were also under ...
Saturday, 13 November 10
INDONESIA SHIPPED 8.73 % MORE COAL IN OCTOBER THAN A MONTH EARLIER
COALspot.com: Indonesia, the world largest coal exporter, shipped 23.55 mln mt of coal in October 2010, which is 8.73 percent more compared to Septe ...
|
|
|
Showing 5526 to 5530 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- The University of Queensland
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
|
| |
| |
|
