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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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Tuesday, 22 September 15
1Q16 FOB INDONESIA COAL SWAP DECLINED 6.49 PER CENT M-M
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and week over week.
The 4Q swap declined $ 2.29 (-5.42%) per t ...
Tuesday, 22 September 15
FOB RICHARDS BAY COAL SWAPS FALL CONTINUES
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined week over week and month over month.
The 4Q swap was down US$ ...
Monday, 21 September 15
Q4' 15 FOB NEWCASTLE COAL SWAP CLOSED HIGHER THAN Q2' 16 SWAP
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery increased $0.43 per ton (1.01%) month over month to US$ 42.95 per ton. The ...
Monday, 21 September 15
CFR SOUTH CHINA COAL SWAP GAINED WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 0.45 (0.90 %) per ton month over month.
A commodit ...
Monday, 21 September 15
KOMIPO OF KOREA INVITES BIDS FOR BITUMINOUS COAL
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 390,000 Metric Tons (MT) of minimum 4,600 kcal ...
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- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
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