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Wednesday, 23 September 15
INDONESIA: NEW REGULATION APPLIES FINAL INCOME TAX TO MINERAL AND COAL SALES - FLORENCE GRACIA SANTOSO
 To increase state revenue from the mining sector, the Government of Indonesia has imposed a new final income tax on any sale of mineral and coal, adding to the burden on the Indonesian mining industry. The new income tax, i.e. Article 22 Income Tax, is regulated under Minister of Finance ("MOF") Regulation No. 107/PMK.010/2015 regarding the Collection of Withholding Tax in Connection with Payment for Delivery of Goods and Imports or Other Business Activities. The regulation came into force 60 days after its issuance on June 8, 2015. This new regulation is the fourth amendment of MOF Regulation No. 154/PMK.03/2010 regarding Article 22 Income Tax.
Article 22 Income Tax, at the rate of 1.5%, now applies to any sale, either domestic or export, of non-processed or non-refined minerals (metal, non-metal and stone) and coal. Exporters must pay the income tax to the state treasury through a post office, foreign exchange bank or any bank appointed by the MOF. Evidence of payment will be verified by the Directorate General of Customs and Excise as a required supporting document for the export notification and will be used as a basis to issue an export clearance.
This income tax is only applicable to holders of a mining business license (Izin Usaha Pertambangan). It does not apply to holders of a Contract of Work (Kontrak Karya) or Coal Contract of Work (Perjanjian Kerjasama Pengusahaan Pertambangan Batubara), who are subject to different financial obligations under their respective contracts.
Since it is a final income tax, this tax will be imposed on the gross income of the company without deducting any expenses incurred to produce, collect or maintain such income. This means that the company must pay the income tax even if the company is not profitable, since this tax is payable upon any sale of minerals and coal.
Income that is subject to final income tax cannot be combined with other income (which is subject to non-final income tax) in the calculation of income tax as reflected in a company’s annual tax return. Final income tax paid under this rule cannot be deducted against non-final income tax.
In an attempt to promote domestic processing and refinery activities, this income tax will not apply to any refined minerals or processed coal. Only minerals in the form of ore or concentrate and non-agglomerated coal are subject to the 1.5% income tax. Under current rules, only a few minerals (copper, iron, manganese, lead and zinc) are allowed to be exported not in refined form (only processed to a certain level). Other minerals cannot be exported unless refined as required under Minister of Energy and Mineral Resources ("MEMR") Regulation No. 1 of 2014 as amended by MEMR Regulation No. 8 of 2015.
The Government of Indonesia has made efforts to reduce the export of unrefined minerals by imposing complicated, lengthy and expensive procedures for such exports. Mineral exporters must first register with the Ministry of Trade to obtain a Registered Exporter Certificate for the Export of Mining Products (Eksportir Terdaftar Produk Pertambangan). This certificate is valid for three years but may be extended an unspecified number of times. To obtain the certificate, the exporter must obtain an approval from the Directorate General of Mineral and Coal ("DGMC").
Another approval from the DGMC is required for the export of unrefined (processed) minerals. This approval is only valid for six months and may be extended. Before any mining products are exported they must first be verified and approved by a Ministry of Trade-registered surveyor to ensure they have been processed/refined to the required standard.
In addition, the export of unrefined (processed) minerals is subject to a very high export tax rate. The export tax rate in 2015 has ranged from 30% to 40% which is scheduled to increase to 50% to 60% as of January 1, 2016 until January 12, 2017. As of January 12, 2017, under current rules, only refined minerals can be exported.
By Florence Gracia Santoso
SSEK Indonesian Legal Consultants
 About Florence Gracia Santoso
Florence is experienced in energy, infrastructure, investment and mergers and acquisitions, and has been involved in a number of acquisitions involving industrial and trading companies. Since joining SSEK Legal Consultants in 2010, Florence Gracia Santoso has been involved in numerous major mining transactions.
This article is intended for informational purposes only and does not constitute legal advice. This article should not be acted upon in any specific situation without appropriate legal advice.
If you believe an article violates your rights or the rights of others, please contact us.
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Monday, 28 September 15
CAPESIZE FLEET INCREASES BY JUST 1 VESSEL DURING LAST 12 MONTHS, IN POSITIVE SIGN FOR DRY BULK SHIPPING MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
After a rather tumultuous period, the shipping industry and more particular the dry bulk market has started to adjust to the new realities of globa ...
Monday, 28 September 15
Q1'16 CFR SOUTH CHINA COAL SWAP ROSE 2.73 PER CENT M-M
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery moved upward US$ 1.45 (3.04 %) per ton month over month.
A commodity ...
Sunday, 27 September 15
THE PANAMAX INDEX FELL 1.19 PCT WEEK OVER WEEK
COALspot.com: The BDI closed Friday (25/09/2015) at 943 points, down by 17 points compared to previous Friday closing (18/09/2015). The BDI wa ...
Friday, 25 September 15
COAL PRODUCTION IN THE U.S. FOR THE WEEK ENDING SEPTEMBER 19 ROSE 2.5% PER CENT W-W
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.8 million shor ...
Wednesday, 23 September 15
CAPESIZE: SPOT RATES HAVE INCREASED MORE THAN 70 PER CENT DURING LAST WEEK
Dry Bulk owners, always look at September as the time that the market “signals” what lies ahead for the remainder of the year. The Chin ...
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- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
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- VISA Power Limited - India
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- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Lanco Infratech Ltd - India
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- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Deloitte Consulting - India
- CNBM International Corporation - China
- PTC India Limited - India
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
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- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- White Energy Company Limited
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
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- The State Trading Corporation of India Ltd
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- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
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