PSC Taxation - Slide
PSC Taxation - Slide
PSC Taxation - Slide
PSC TAXATION
20%
FTP
Rec.Operating Cost
Equity to be Split
71.15%
28.85%
BP-MIGAS
Share
CONTRACTO
R Share
25%x28.85%
DMO
DMO Fee
Govt Tax
Indonesia
Share
2. Cost/Tax Deductions
- PSC Operating Cost
- Non PSC Cost
3. Taxable Income (1) (2)
Tax Payments:
- Income Tax
- Dividend/Branch Profit Tax
48%
Net
Contr.
Share
(+)
(+)
(-)
(+)
(+/-)
Rec.Oper
Cost
F:/Boss/Kabppka/Gtw02/Jk
Thru 1984
45.0%
20.0%
56.0%
1985-1994
35.0%
20.0%
48.0%
Ordonantie 1925
KMK 267/012/1978
UU PPH No.7/1984
KMK 458/012/1984
Reference
After 19952011
30.0%
20.0%
44.0%
After 2011
25.0%
20.0%
40.0%
UU PPH No. /20111
UU PPH No.10/1994
When a partner in a PSC is subject to a tax treaty with a foreign country tax regime, the rate of
Tax on Interest, Dividend and Royalty or Branch Profit Tax may be so affected that the total tax
rate changes to a lower rate.
Example of 10% Rate of Tax on Interest, Dividend and Royalty or Branch Profit tax due to tax
treaty:
Income Tax
Tax on PBDR or Branch
Profit
Total
45.0%
10.0%
50.5%
35.0%
10.0%
41.5%
Ordonantie 1925
KMK 267/012/1978
UU PPH No.7/1984
KMK 458/012/1984
30.0%
10.0%
37.0%
UU PPH No.10/1994
25.0%
10.0%
32.5%
Reference
- The application of tax treaty result in lower net after tax shares for government
- Some, including new contracts revise production splits to have the same net after tax shares
PSCs signed after Oil and Gas Law contains the following clauses:
Contractor shall pay to the Government the Republic of Indonesia
the income tax and the final tax on profit after tax deductible
imposed on it pursuant to the Indonesia Income Tax Law and its
implementing regulations.
BPMIGAS shall, except with respect to Contractors obligation to
pay Income Tax and the Final Tax on Profit after tax deductions as
set forth in this Section V, assume and discharge all other
Indonesia taxes of Contractor including value added tax, transfer
tax, import and export duties on materials, equipment and
supplies brought in to Indonesia by Contractor, its contractors or
subcontractors,..
One argument : The terms and conditions of PSC (i.e 85/15, 70/30
and others are based on the assumptions that Contractors are
not obligated to pay taxes and levies other than income taxes
Sutadi PU - Understanding PSC - LDI-Slide
and final tax on profit, as spelled
19 out in the contract
Tariffs
Losses may be compensated for
5 years
Tariffs
Losses may be
compensated for 5 years
Community
Development is not tax
deductible
Acquisition costs of
economic interest are
charged to Operating
Costs according to PSC
Accounting Procedures
Books and Accounts are
reported in English
language and in US
Dollar currency