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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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Sunday, 20 September 15
BALTIC CAPE INDEX ROSE 66.52 PER CENT AND STAND NOW AT 1995 POINTS
COALspot.com: The BDI (Baltic Dry Index) rose 17.35 per cent week over week to 960 points on Friday mainly driven by the Capesize segment. The Cape ...
Friday, 18 September 15
SHIPPING AND THE FED RATE DECISION: FINANCING COSTS COULD RISE EVEN HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Regardless of the FED’s decision to raise rates, shipping stands to be influenced by the decision. Shipbroker Allied Shipbroking noted this w ...
Friday, 18 September 15
U.S. COAL PRODUCTION DECLINED 6.7 PER CENT W-W: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.4 million shor ...
Thursday, 17 September 15
COALSPOT HAS LAUNCHED NEW THERMAL COAL INDICES FOR INDONESIAN COAL
COALspot.com has today launched real-time CS (i) Coal Indices.
The Indices represents 3800 kcal/kg GAR, 4200 kcal/kg GAR, 5000 kcal/kg GAR a ...
Thursday, 17 September 15
LOW DEMAND PUSH COAL SWAP DOWN
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and gain week over week.
The 4Q swap declined $ 1.77 (-4.17%) ...
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- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Planning Commission, India
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Australian Coal Association
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
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