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, 09 September 10
DRY BULK MARKET IS LOOKING TO INCREASE GAINS ON OCTOBER IRON ORE CONTRACTS
The “success” story that the dry bulk market has been displaying during the past couple of weeks is being materialized as we head toward ...
Tuesday, 07 September 10
INDIA IMPORTS 1.63 MLN T OF COAL FOR THE PERIOD 30 AUGUST - 5 SEPTEMBER - SOURCES
COALspot.com: India has imported 1.07 million tons of power plant coal, 0.520 mln tons of coking coal and around 41,000 mt of Anthracite coal for th ...
Tuesday, 07 September 10
GOVERNMENT DECLARED INDONESIAN COAL PRICE REFERENCE DECLINE FOR THIRD-STRAIGHT MONTH
COALspot.com: Indonesian thermal coal price reference, a monthly benchmark price declared by Ministry of Energy and mineral resources of Repub ...
Tuesday, 07 September 10
MERCATOR TO BUY COAL MINE IN INDONESIA THIS FISCAL
Mercator Lines, India’s second-largest shipping company which has diversified into coal mining, will buy a coal mine in Indonesia with more th ...
Monday, 06 September 10
DRY BULK MARKET GAINS 6.05% ON WEEK, BOOSTED BY CAPESIZE VESSELS
The dry bulk market is looking to capitalize last week’s gains of more than 6 percent in this week, as the capesize segment seems to be on a h ...
|
|
|
Showing 5621 to 5625 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Australian Coal Association
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
|
| |
| |
|
