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, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
...
|
|
|
Showing 36 to 40 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- The University of Queensland
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- White Energy Company Limited
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
|
| |
| |
|
