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.
|
|
Friday, 02 February 24
DRY BULK MARKET: THE DOWNWARD REVISION IN THE GROWTH OF CAPESIZE TONNE DAYS IN JANUARY WITH THE BCI DROPPING - MARIA BERTZELETOU
In the last week of January, the dry freight market sustained weakness in the Capesize segment, while the number of ballasters in the Southeast (SE ...
Friday, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
Thursday, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
|
|
|
Showing 41 to 45 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Planning Commission, India
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- White Energy Company Limited
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
|
| |
| |
|
