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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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- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- Parliament of New Zealand
- PTC India Limited - India
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
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