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.
|
|
Monday, 08 November 10
INDONESIAN HBA HAS INCREASED TO $ 95.51 PER TON FOR NOVEMBER LOADING
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Sunday, 07 November 10
THE SUPRAMAX INDEX IN THE FAR EAST CONTINUED TO BE UNDER PRESSURE - CAPT. REDDY
COALspot.com: The freight market continued to remain soft and all segments were down by almost about 6 pct.
The BDI and Cape Size index was down ...
Saturday, 06 November 10
DRY BULK MARKET LACKING SUPPORT TO SUSTAIN CURRENT LEVELS, BUT PANAMAX OWNERS ARE MORE FORTUNATE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Posting its fifth straight losing session, the dry bulk market benchmark, the BDI (Baltic Dry Index) was down yesterday by another 1.26% to 2510 poi ...
Friday, 05 November 10
RI COAL EXPORT PROSPECTS STILL BRIGHT - THE JAKARTA POST
The Jakarta Post reported that, Indonesia, already the world’s largest exporter of seaborne thermal coal since 2005, will continue to be a maj ...
Thursday, 04 November 10
CAPE SIZE SENTIMENT FOR THIS WEEK WAS NEGATIVE - FEARNBULK
Handy
The Atlantic markets remain flat and lackluster. High volume of tonnage availabi ...
|
|
|
Showing 5536 to 5540 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Bhatia International Limited - India
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- The University of Queensland
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Parliament of New Zealand
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
|
| |
| |
|
