Regulation Of The Minister Of Finance Number 257/fmd. 011/2011 2011

Original Language Title: Peraturan Menteri Keuangan Nomor 257/PMK.011/2011 Tahun 2011

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Microsoft Word-bn946-2011 REPUBLIC of INDONESIA No. 946, 2011 MINISTRY of FINANCE. The Payment Of Income Tax. Ordinance Cuts. REGULATION of the MINISTER of FINANCE of the REPUBLIC of INDONESIA NUMBER 257/FMD. 011/2011 ABOUT the PROCEDURES for WITHHOLDING and PAYMENT of INCOME TAX on the INCOME of ANOTHER CONTRACTOR in the FORM of UPLIFT or OTHER SIMILAR REWARDS and/or CONTRACTOR'S INCOME FROM TRANSFER of PARTICIPATING INTEREST with the GRACE of GOD ALMIGHTY the MINISTER of FINANCE of the REPUBLIC of INDONESIA, Considering: that in order to implement the provisions of article 27 paragraph (4) the Government Regulation Number 79 in 2010 about the operating cost is refundable income tax Treatment and businesses Upstream Oil and Gas need to set Rules, Finance Minister about The Cuts and the payment of income tax on the income of another Contractor in the form of Uplift or other similar Rewards and/or Contractor's income from transfer of Participating Interest; Remember: 1. Law number 6 Year 1983 on general provisions and Taxation Procedures (State Gazette of the Republic of Indonesia Number 49 in 1983, an additional Sheet of the Republic of Indonesia Number 3262) as it has several times changed with Act No. 4 of 2009 (State Gazette of the Republic of Indonesia Number 62 in 2009, an additional Sheet of the Republic of Indonesia Number 4999); www.djpp.kemenkumham.go.id 2011, no. 946 2 2. Act No. 7 Year 1983 regarding income tax (State Gazette of the Republic of Indonesia Number 50 in 1983, an additional Sheet of the Republic of Indonesia Number 3263) as it has several times changed with Act No. 36 of 2008 (State Gazette of the Republic of Indonesia Year 2008 Number 133, additional sheets of the Republic of Indonesia Number 4893); 3. Government Regulation Number 79 in 2010 about the operating cost is refundable income tax Treatment and businesses Upstream Oil and Gas (State Gazette of the Republic of Indonesia year 2010 Number 139, an additional Sheet of the Republic of Indonesia Number 5173); 4. Presidential Decree Number 56/P in 2010; Decide: Define: REGULATION Of The MINISTER Of FINANCE REGARDING The PROCEDURES For WITHHOLDING And PAYMENT Of INCOME TAX On The INCOME Of ANOTHER CONTRACTOR In The FORM Of UPLIFT Or OTHER SIMILAR REWARDS And/Or CONTRACTOR'S INCOME FROM TRANSFER Of PARTICIPATING INTEREST. Article 1 In this ministerial regulation is: 1. the income tax act is Act No. 7 Year 1983 regarding income taxes as it has several times changed with Act No. 36 year 2008. 2. Contractor Cooperation Contract oil and Gas which are hereinafter referred to as the contractor is a business entity or a business form remains assigned to conduct exploration and exploitation in the area work based on a contract of cooperation with the Implementing Agencies. 3. Uplift is the rewards received by the Contractor in connection with the provision of bailouts for the financing of the operation contract for the results that should another contractor participation is obligatory, existing in a single contract, cooperation in financing. 4. the Participating Interest is a right and duty as a Contractor in the same employment contract, either directly or indirectly, on an area of work. www.djpp.kemenkumham.go.id 2011, no. 9463 5. Exploration is an activity that aims to obtain information about the geological conditions to discover and obtain the estimated oil and gas reserves in the region specified. 6. The exploitation is a series of activities aiming to produce oil and gas from a specified region, which consists of the drilling and completion of wells, construction of means of transport, storage, and processing for separation and purification of oil and gas in the field as well as other activities that support it. Article 2 (1) on the income of the other Contractors outside the contract of cooperation in the form of Uplift or other similar remuneration subject to income tax are final with rates of 20% (twenty per cent) of the gross amount. (2) on the income of the other Contractors outside the contract of cooperation in the form of a transfer of Participating Interest taxed earnings are final rates of: a. 5% (five per cent) of the gross amount, for the transfer of Participating Interest during the Exploration; or b. 7% (seven per cent) of the gross amount, for the transfer of Participating Interest during the period of exploitation. (3) an exploration of the Period referred to in paragraph (2) letter a are calculated from the date of effective cooperation contracts up to the date of approval of the field development plan first on a work-area contractor. (4) the period of Exploitation as referred to in paragraph (2) letter b are calculated from the expiration of the Exploration as referred to in paragraph (3) up to the expiration date of the contract of cooperation. Article 3 (1) in order to divide the risk during exploration, transfer of Participating Interest are exempt from the imposition of income tax as referred to in article 2 paragraph (2) letter a, in which case meets the criteria: a. do not divert the entire Participating Interest assets; b. Participating Interest has owned more than 3 (three) years; c. in the region has been conducted and contractors has issued Exploration investment to carry out Exploration in question; and www.djpp.kemenkumham.go.id 2011, no. 946 4 d. transfer of Interest by Participating Contractors is not intended to gain an advantage. (2) the imposition of income tax as referred to in article 2 paragraph (2) letter b, excluded all liability to do to diversion Participating Interest according to the cooperation contracts national company as stated in the contract of cooperation. Article 4 of the basic income tax Imposition upon transfer of Participating Interest referred to in article 2 paragraph (2) is: a. the amount actually received or retrieved the contractor; or b. the amount that should have been received or retrieved the contractor, in which case there is a special relationship as referred to in article 18 paragraph (4) of the income tax act between the parties do to diversion Participating Interest. Article 5 (1) in the event of a transfer of Participating Interest, the contractor is obliged to report the value of the Participating Interest referred to diversion to the Tax Services Office of the place of the registered Contractor is accompanied by a written document in the form of Participating Interest and diversion agreement Financial Quarterly Report (FQR) last quarter prior to the diversion of the Participating Interest. (2) in the case of the provisions referred to in subsection (1) is not met by the contractor, the Director General of Taxes can be set in the position of the magnitude of value transfer of Participating Interest. (3) Reporting as referred to in subsection (1) is conducted by: a. the contractor who receives a transfer of Participating Interest in terms of the recipient of the transfer of Participating Interest is already registered as a Taxpayer; or b. the Contractor shifted Participating Interest in terms of the recipient of the transfer of Interest has not yet been registered as Participating Taxpayers, using the format of a form report diversion of Participating Interest as listed in Annex I, which is part an integral part of this regulation of the Minister. (4) the contractor referred to in subsection (3) must report the value of transfer of Participating Interest referred to in subsection (1), 14 (fourteen) days commencing employment since the Treaty Participating Interest signed diversion. www.djpp.kemenkumham.go.id


2011 under questions 9465. Article 6 (1) when the terutangnya income tax on the income in the form of Uplift or other similar remuneration referred to in article 2 paragraph (1) was at the time the income is in the form of Uplift or other similar remuneration paid or recognized as expenses, depending on which event occurred first. (2) of the income tax as referred to in article 2 paragraph (1) the compulsory cut by contractors who pay Uplift or other similar rewards by using trim evidence form format as listed in annex II, which is part an integral part of this regulation of the Minister. Article 7 (1) terutangnya income tax on the income from the transfer of Participating Interest referred to in article 2 paragraph (2) was at the time of payment, at the time of transfer of Participating Interest, or at the time of the transfer agreement gave the Participating Interest by the Minister of energy and Mineral resources, depending on which event occurred first. (2) of the income tax as referred to in article 2 paragraph (2) the compulsory cut by Contractors who receive transfer of Participating Interest using the format of a form of evidence cut as listed in annex II, which is part an integral part of this regulation of the Minister. (3) in the event the contractor who receives a transfer of Participating Interest referred to in subsection (2) has not been registered as a Taxpayer at the time the terutangnya income tax referred to in subsection (1), income tax owed mandatory deposited by Contractors who receive transfer of Participating Interest by using the letter of Tax Deposit on behalf of the contractors who turned his Participating Interest. (4) in the case of income tax owed is not deposited by the contractor who receives a transfer of Participating Interest referred to in subsection (3), the income tax payable meant compulsory cut, deposited, and reported by the contractor who receives a transfer of Participating Interest at the time once registered as a Taxpayer in accordance of legislation in the field of taxation. www.djpp.kemenkumham.go.id 2011, no. 946.6 (5) in the event of a transfer of Participating Interest conducted indirectly and do not change the number of principal Taxpayers, contractors who turned his Participating Interest is obligated to deposit their own income tax owed by using Tax Deposit Letter. Article 8 income tax referred to in article 6 paragraph (2) and/or article 7 paragraph (2), subsection (3), subsection (4), and subsection (5), mandatory deposited into the State Treasury, according to the time period as set out in the regulation of the Minister of finance governing the determination of the due date of payment, remittance, cutting, polling, and/or tax reporting. Article 9 (1) of the income tax that has been paid as stipulated in article 8 the obligatory reported to: a. a tax services office a place contractors who make a payment or reward Uplift other similar registered upon payment as referred to in article 6 paragraph (2); b. place Tax Services Office Contractor who receives a transfer of Participating Interest registered upon payment as referred to in article 7 paragraphs (2) and paragraph (4); and/or Tax Services Office c. place of distract Participating contractors that Interest registered upon payment as referred to in article 7 paragraphs (3) and paragraph (5). (2) reporting of paid in income tax referred to in subsection (1) is carried out according time period as set out in the regulation of the Minister of finance governing the determination of the due date of payment, remittance and reporting the poll tax by using the notice period of final income tax article 4 paragraph (2) on the part of certain other income. Article 10 (1) Top taxable income after deducting income taxes which are derived from the final Uplift or reward others who www.djpp.kemenkumham.go.id 2011, no. 9490 a type referred to in article 2 paragraph (1) and/or the contractors income from transfer of Participating Interest referred to in article 2 paragraph (2), the income tax payable in accordance of legislation in the field of income tax. (2) income tax Treatment against other income of contractors that are not specifically regulated in this Ministerial Regulation, applicable laws and regulations in the field of income tax is applicable in General. Article 11 the calculation of income tax as stipulated in article 2, article 3, and article 10 paragraph (1) be done according the example as listed in Annex III, which is part an integral part of this regulation of the Minister. Article 12 (1) the provisions concerning the time of terutangnya income tax referred to in article 6 paragraph (1) and article 7 paragraph (1) does not apply to income in the form of Uplift or other similar remuneration and income from transfer of Participating Interest, which occurred on December 20, 2010 up to before the enactment of this regulation of the Minister. (2) when the terutangnya income tax on the income in the form of Uplift or other similar remuneration and income from transfer of Participating Interest referred to in subsection (1) is at the date of entry into force of this regulation of the Minister. (3) the provisions referred to in article 10 paragraph (1) is in effect against taxable income after deducting income tax is final, on the income in the form of Uplift or other similar remuneration or income from transfer of Participating Interest received or accrued after the enactment of this regulation of the Minister. Article 13 this Ministerial Regulation went into effect on January 1, 2012. www.djpp.kemenkumham.go.id 2011, no. 946 8 so that everyone knows it, ordered the enactment of this Ministerial Regulation with its placement in the news of the Republic of Indonesia. Established in Jakarta on 28 December 2011 the INDONESIAN FINANCE MINISTER AGUS MARTOWARDOJO D.W., Enacted in Jakarta on December 28, 2011 MINISTER of LAW and HUMAN RIGHTS REPUBLIC of INDONESIA, AMIR SYAMSUDDIN www.djpp.kemenkumham.go.id 2011, no. 9469 DIVERSION REPORT FORM FORMAT PARTICIPATING INTEREST of INDONESIAN FINANCE MINISTER AGUS MARTOWARDOJO D.W., ANNEX I of the REGULATION of the MINISTER of FINANCE of the REPUBLIC of INDONESIA NUMBER 257/FMD. 011/2011 ABOUT the PROCEDURES for WITHHOLDING and PAYMENT of INCOME TAX on the INCOME of ANOTHER CONTRACTOR in the FORM of UPLIFT or OTHER SIMILAR REWARDS and/ INCOME FROM TRANSFER of CONTRACTOR or PARTICIPATING INTEREST www.djpp.kemenkumham.go.id 2011, no. 946 10 FORMAT FORM the EVIDENCE PIECE ANNEX II REGULATION of the MINISTER of FINANCE of the REPUBLIC of INDONESIA NUMBER 257/FMD. 011/2011 ABOUT the PROCEDURES for WITHHOLDING and PAYMENT of INCOME TAX on the INCOME of ANOTHER CONTRACTOR in the FORM of UPLIFT or OTHER SIMILAR REWARDS and/or CONTRACTOR'S INCOME FROM TRANSFER of PARTICIPATING INTEREST www.djpp.kemenkumham.go.id 2011, no. 94611 INDONESIAN FINANCE MINISTER AGUS MARTOWARDOJO D.W., www.djpp.kemenkumham.go.id 2011 , No. 946 12 EXAMPLES of the CALCULATION of the TAX on the INCOME of CONTRACTORS in the FORM of UPLIFT or OTHER SIMILAR REMUNERATION 1. An example of the calculation of the tax on the income of contractors in the form of Uplift or other similar rewards: Alpha Ltd. is a company engaged in the field of mining, oil and gas, which was established in country X. Beta Pty Ltd. is a company engaged in the field of mining, oil and gas, which was established in the country Y. In 2004 Alpha and Beta Pty Ltd. Ltd. won the tender offer oil and gas blocks Arjuna in the Java Sea. Alpha Ltd. to form Alpha Arjuna Ltd. in country Z (not partner countries P3B) and Beta Pty Ltd. formed Beta Arjuna Ltd. in country Z. Both companies then formed a business form fixed (BUT) and register it in the Agency's Tax Services Office and Two Foreigners. BUT each holds a 50% interest in oil and gas blocks Arjuna. If oil and gas cooperation in the contract mentioned that if one of the Contractors is experiencing financial difficulties and the participation ditalangi taxable by other Contractors, then Contractors are asking for bailouts will pay Uplift to contractors who provide bailouts. BUT Beta Arjuna Ltd. experienced financial liquidity problems so the cost for exploration activities in 2004 up to ditalangi by 2010 BUT Alpha Arjuna Ltd.. In 2011 the block Arjuna entered the stage of production. Over the bailouts, BUT Alpha Arjuna Ltd. get rewarded in the form of Uplift of the Beta BUT Arjuna Ltd. of u.s. 10, 000.00 paid in December 2012. Based on that information, the calculation of the final income tax on the income in the form of Uplift is received BUT Alpha Arjuna Ltd. is as follows: PPh final = 20% x 10, 000.00 US = US $2,000, 000.00 (cut by BUT Arjuna Ltd., Beta and the Beta BUT Arjuna Ltd. is obliged to provide proof potongnya to BUT Alpha Arjuna Ltd.) ANNEX III of the REGULATION of the MINISTER of FINANCE of the REPUBLIC of INDONESIA NUMBER 257/FMD. 011/2011 ABOUT the PROCEDURES for WITHHOLDING and PAYMENT of INCOME TAX on the INCOME of ANOTHER CONTRACTOR in the FORM of UPLIFT or OTHER SIMILAR REWARDS and/or CONTRACTOR'S INCOME FROM TRANSFER of PARTICIPATING INTEREST www.djpp.kemenkumham.go.id


2011, no. 94613 Calculation PPh Article 26 paragraph (4) of the taxable income after deducting the final income tax derived from Uplift is as follows: revenue Uplift yg Costs directly related to Uplift = = US $ 10, 000, 000.00 US $ 2,000,000.00 taxable income income tax = final = US $ 8, 000, 000.00 US $ 2,000,000.00 DPP PPh Article 26 paragraph (4) of the revenue Uplift = US $ 6, 000, 000.00 PPh Article 26 paragraph (4) payable = (20% xUS $6,000, 000.00) US $ 1,200, 000.00 2. Examples of calculating a transaction tax on transfer of Participating Interest:-Charlie Ltd. is a company engaged in the field of mining, oil and gas, which was established in country X. -Delta Pty Ltd. is a company engaged in the field of mining, oil and gas, which was established in the country Y, Delta Pty Ltd. formed a Special Purpose Vehicle (SPV) Company Delta Pty Ltd. in country Z and register BUT Delta Pty Ltd. at the Tax Services Office of the governing body and Two Foreigners. -In 2009, Charlie Ltd. won the tender offer oil and gas blocks Bima in the Java Sea. Charlie Ltd. form Charlie Bima Ltd. in country Z and register BUT Charlie Bima Ltd. at the Tax Services Office of the governing body and Two Foreigners. BUT Charlie Bima Ltd. signed a contract with the implementing Entities business activities Upstream Oil and Gas (ECONOMIC) in 2009 and holds a 100% interest in blocks of Bima. Countries X, Y, and Z is not a partner of P3B. a. transfer of Participating Interest directly: 1) in the period of Exploration: in 2011, BUT Charlie Bima Ltd. turned his 50% interest in block Bhima to BUT Delta Pty Ltd., with transaction value of US $20,000, 000.00. The calculation of income tax owed by BUT Charlie Bima Ltd. is as follows: PPh x = 5% final US $20,000, 000.00 = US $1,000, 000.00 (cut by BUT Delta Pty Ltd., and BUT Delta Pty Ltd. is obligated to provide proof potongnya to BUT Charlie Bima Ltd.) Calculation of income tax Article 26 paragraph (4) of the taxable income after deducting income tax comes from the final transfer of Participating Interest is as follows: www.djpp.kemenkumham.go.id 2011, no. 946 14 income from transfer of Participating Interest Costs that have been incurred == US $20,000, US $16,000, 000.00 000.00 taxable income income tax = final = US $ 4,000,000.00 US $ 1,000, 000.00 DPP PPh Article 26 paragraph (4) = US $ 3,000, 000.00 PPh Article 26 paragraph (4) payable (20% xUS $3,000, 000.00) US $ 600, 000.00 2) in the course of Exploitation Oil & gas: a block of Bima has production in 2015 and 2016 BUT Charlie Bima Ltd. averted again 10% interest in blocks of Bima to BUT Delta Pty Ltd. with a transaction value of US $20,000, 000.00, then over the transfer of interest transactions, the calculation of final income tax owed by BUT Charlie Bima Ltd. is as follows: PPh = 7% final US $20,000, 000.00 x = US $1,400, 000.00 (cut by BUT Delta Pty Ltd. , and BUT Delta Pty Ltd. is obligated to provide proof potongnya to BUT Charlie Bima Ltd.) Calculation of income tax Article 26 paragraph (4) of the taxable income after deducting income tax comes from the final transfer of Participating Interest are as follows: income from transfer of Participating Interest Costs that have been incurred (excluding the costs already reimbursed by Government) = = US $ 20, 000, 000.00 US $ 14,400, 000.00 taxable income income tax = final = US $ 5,600, 000.00 US $ 1,400, 000.00 DPP PPh Article 26 paragraph (4) = US $ 4,200, 000.00 PPh Article 26 paragraph (4) payable (20% xUS $4,200, 000.00) US $ 840, 000.00 b. Diverting an indirect Participating Interest/ transfer of stock: in the year 2017, Charlie Ltd. turned its 30% interest in Block 100% of sales through Bima stock Charlie Bima Ltd. to Gama Pty Ltd. with a transaction value of U.S. $20,000, 000.00. Thus was Gama Pty Ltd. has a 30% interest in block Bima Bima Charlie through Ltd. (SPV company). Over the share sale transactions including in terms of diverting interest indirectly because of the interest in the block is sold this way. Although formally the transaction is a transfer of the shares but the substance of the transaction is a transfer of interest (substance over form). www.djpp.kemenkumham.go.id 2011, no. 94615 counting of final income tax owed by BUT Charlie Bima Ltd. is as follows: PPh = 7% final US $20,000, 000.00 x = US $1,400, 000.00 (deposited by BUT Charlie Bima Ltd. into the State Treasury since Gama Pty. Ltd. is not registered in Indonesia) BUT Charlie Bima Ltd. will be renamed BUT Gama Bima Ltd. without any changes to PERSONAL TAX NUMBER. Calculation of income tax Article 26 paragraph (4) of the taxable income after deducting income tax comes from the final transfer of Participating Interest are as follows: income from transfer of Participating Interest Costs that have been incurred (excluding the costs already reimbursed by Government) == US $20,000, US $14,400, 000.00 000.00 taxable income income tax = final = US $ 5,600, 000.00 US $ 1,400, 000.00 DPP PPh Article 26 paragraph (4) = US $ 4,200, 000.00 PPh Article 26 paragraph (4) payable (20% xUS $4,200, 000.00) US $ 840, 000.00 c. diversion of Participating Interest that is exempt from the withholding income tax final: in 2018, BUT Charlie Bima Ltd. back to sell 10% interest in blocks of Bima to the company area (PD) Gemah Ripah in accordance with existing obligations in the contract of cooperation with transaction value of US 10, 000.00. Top deals of the interest is not payable transfer of PPh final round conducted in accordance with the provisions set forth in the contract of cooperation. d. transfer of interest in methods of settlement in the form of a certain percentage of the amount of production: in 2018 BUT Gama Bima Ltd. diverted 30% interest owned directly to BUT Tera Ltd. with the agreement as follows: 1) paid in advance of u.s. $20,000, 000.00; 2) 2% per year from oil lifting contractors section up to the expiry of the contract. In the year 2019 the number of lifting part BUT Tera Ltd. is US $100,000, 000.00 www.djpp.kemenkumham.go.id 2011, no. 946 16 PPh Tally owed up diversion as follows: 2018 PPh = 7% x final US $20,000, 000.00 = US $1,400, 000.00 (deposited by BUT Tera Ltd. into the State Treasury and BUT Tera Ltd. is obliged to provide proof potongnya to BUT Gama Bima Ltd.) Calculation of income tax Article 26 paragraph (4) of the taxable income after deducting income tax comes from the final transfer of Participating Interest are as follows: income from transfer of Participating Interest Costs that have been incurred (excluding the costs already reimbursed by Government) == US $20,000, US $14,400, 000.00 000.00 taxable income income tax = final = US $ 5,600, 000.00 US $ 1,400, 000.00 DPP PPh Article 26 paragraph (4) = US $ 4,200, 000.00 PPh Article 26 paragraph (4) payable (20% xUS $4,200, 000.00) US $ 840, 000.00 payment amount to the year 2019 BUT Gama Bima Ltd. = 2% x US $100,000, 000.00 = US $2,000, 000.00 PPh = 7% x final US $2,000, 000.00 = US $140, 000.00 (deposited by BUT Tera Ltd. into the State Treasury) the calculation of income tax Article 26 paragraph (4) of the taxable income after deducting income tax comes from the final transfer of Participating Interest are as follows: income from transfer of Participating Interest Costs that have been incurred (excluding the costs already reimbursed by Government) = = US $ 2,000,000.00 US $ 1,440, 000.00 taxable income income tax = final = US $ 560, 000.00 US $ 140, 000.00 DPP PPh Article 26 paragraph ( 4) = US $ 420, 000.00 PPh Article 26 paragraph (4) payable (20% xUS $420, 000.00) US $ 84 www.djpp.kemenkumham.go.id, 000.00


2011, No. 94617 3. Examples of exceptions the imposition of income tax upon the transfer of Participating Interest transactions during exploration: in order to divide the risk during exploration, transfer of Participating Interest does not include income subject to final income tax if it meets the criteria (cumulative) as follows: a. do not divert the entire Participating Interest assets; b. Participating Interest has owned more than 3 (three) years; c. in the region have done exploration (there has been investment spending);d 60s d. transfer of Participating Interest is not intended to gain an advantage. Example:  Alfa Inc. is a company engaged in the field of mining, oil and gas, which was established in country X.  Berta Inc. is a company engaged in the field of mining, oil and gas, which was established in the country Y.  in 2009, Alfa Inc. won the tender offer oil and gas blocks Duku. Alfa Inc. formed the Alpha Duku Inc. in country Z and register BUT Alfa Duku Inc. (ADI) in the Tax Services Office of the governing body and Two Foreigners. BUT ADI signed a contract with the implementing Entities business activities Upstream Oil and Gas (ECONOMIC) in 2009 and holds a 100% interest in Block Duku. Countries X, Y, and Z is not a partner of P3B.  up to 2014 BUT the ADI has spent US $ 4,000,000.00 in exploration activities at Block Duku.  by 2015 BUT the ADI signed a contract for the transfer of the interest of 50% (fifty percent) to BUT Berta Duku Inc. (BDI).  This transaction has met three (3) criteria for imposition of final income tax exemption, namely the letter a, letter b, letter c and above.  the following example transaction transfer of interest from ADI BUT THOROUGH to BDI during his Exploration related to the sharing of risk: 1) Buyer (BUT BDI) doing the replacement cost that has been incurred BUT ADI proportionately the compensation Arrangements: BUT the BDI will replace 50% (fifty percent) of the cost BUT the ADI of US $ 2,000,000.00 (50% from US $ 4,000,000.00). Starting in 2015, the cost of exploration will be borne BUT ADI and BDI BUT each of 50% (fifty percent). www.djpp.kemenkumham.go.id 2011, no. 946 of 18 this transaction contains the notion of transfer of Participating Interest that is not intended to gain an advantage. Because this transaction has met four (4) criteria for transactions in order to share the risk then top this deal not payable PPh final. When the BDI BUT turned out to be paid US $ 3,000, 000.00 to 50% above the ADI BUT (fifty percent) of the total cost that has been incurred BUT ADI so that in this case BUT the ADI profit of US $1,000, 000.00 (US $3,000, 000.00 – US $2,000, 000.00) then the transaction is not included into the sense of sharing the risks and therefore to final income tax payable. PPH x = 5% final US $3,000, 000.00 = US $150, 000.00 (cut by BUT BDI BDI BUT mandatory, and provide proof of potongnya to BUT ADI) calculation of income tax Article 26 paragraph (4) of the taxable income after deducting income tax comes from the final transfer of Participating Interest are as follows: income from transfer of Participating Interest Costs that have been incurred = = US $ 3,000, 000.00 US $ 2,400, 000.00 taxable income income tax = final = US $ 600, 000.00 US $ 150,000.00 DPP PPh Article 26 paragraph (4) = US $ 450, 000.00 PPh Article 26 paragraph (4) payable (20% xUS $450, 000.00) US $ 90, 000.00 2) Buyer (BUT BDI) pay the costs that will be incurred (future cost) for costs that have been incurred by the ADI BUT proportionately. Compensation arrangements: BDI BUT will pay future cost up to US $ 4,000,000.00 and BUT did not pay any TAXES. Starting in 2015, the cost will be borne by BDI BUT Exploration up to the amount of US $ 4,000,000.00 (with demkian total costs already incurred in Blocks of u.s. $8,000 Duku, 000.00). Further exploration of the costs that will be incurred (future cost) will be borne BUT ADI and BDI BUT each of 50% (fifty percent). This transaction contains the notion of transfer of Participating Interest that is not intended to gain an advantage. Because this transaction has met four (4) criteria for transactions in order to share the risk then top this deal not payable PPh final. But when BUT BDI agreed to pay the cost of Exploration that would come to US $ 5, 000, 000.00 (which should have US $ 4,000,000.00) and for further exploration of the costs that will be incurred (future cost) will be borne BUT ADI and BDI BUT each www.djpp.kemenkumham.go.id 2011, no. 94619 each of 50% (fifty percent) then in this case BUT the ADI profit of US $1,000, 000.00 (US $5,000, 000.00 – US $4,000, 000.00) so that this transaction does not include into the notion of sharing the risks and therefore to final income tax payable. PPH x = 5% final US $5,000, 000.00 = US $250, 000.00 (cut by BUT BDI BDI BUT mandatory, and provide proof of potongnya to BUT ADI) calculation of income tax Article 26 paragraph (4) of the taxable income after deducting income tax comes from the final transfer of Participating Interest are as follows: income from transfer of Participating Interest Costs that have been incurred == US $ 5, 000, 000.00 US $ 4,000,000.00 taxable income income tax = final = US $ 1,000, 000.00 US $ 250, 000.00 DPP PPh Article 26 paragraph (4) = US $ 750, 000.00 3) Buyer (BUT BDI) only take into account future cost, BUT not replace the BDI costs that have been issued BUT the ADI Setting compensation: BDI BUT will only bear the costs of Exploration starting in 2015 in accordance with the proportional ownership of interestnya (50%) and will not reimburse the costs that have been issued BUT the ADI (US $ 4,000,000.00). At the time of the block has been producing and Government Duku replace the costs that have been incurred by the Government over the replacement then the spending of US $ 4,000,000.00 be right BUT ADI fully (Sole Risk). The transaction included in the notion of transfer of Participating Interest that is not intended to gain an advantage. Considering the transaction meets all four criteria of transactions in order to share the risk referred to in article 3 paragraph (1) of this regulation of the Minister, then upon such transactions not payable PPh final. INDONESIAN FINANCE MINISTER AGUS MARTOWARDOJO D.W., www.djpp.kemenkumham.go.id