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