Indonesia’s Mining Fiscal Regime: H2 2014

Indonesia has a range of key minerals, and produces significant quantities of coal, gold, bauxite, phosphates and iron sand, as well as the potential for the production of alluvial diamond. The country plays a crucial role in global coal markets, and is a major supplier to Asian countries such as India, China, South Korea, Japan and Taiwan.

The mining industry is governed by the Ministry of Energy and Mineral Resources (MEMR) and the Directorate General of Mineral and Coal. The Law of Mineral and Coal Mining No.4/2009 is the main law regulating coal mining within the country.

Scope

GlobalData’s 'Indonesia’s Mining Fiscal Regime: H2 2014' report outlines Indonesia's governing bodies, laws, mining licenses, mining rights and obligations and key fiscal terms which includes central taxes, royalties, capital gain taxes, corporate income tax, depreciation, real property tax, withholding tax, land tax, branch profit tax, loss carry forward and VAT.

Key Highlights

• The MEMR is responsible for the formulation of national and technical policy in the fields of energy and mineral resources. It aims to achieve independence in security and energy to maintain growth and prosperity.

• The Directorate General of Mineral and Coal is a subsidiary of the Ministry of Energy and Mineral Resources. It is responsible for carrying out development work in the fields of mineral and coal mining. It also formulates tasks and technical consistencies, implements policies and standards, and provides supervision and assessment for coal mining.

• The Ministry of Environment assists the President in formulating policies and coordinating environmental planning, implementation, monitoring and control in Indonesia.

• National legislation through Law No. 10/1997 on Nuclear authorized the Nuclear Energy Control Board (BAPETEN) to supervise the use of nuclear power, includes the licensing, inspection and enforcement of regulations.

• Law 4/2009 on Mineral and Coal Mining governs the mining sector in Indonesia. The new law replaced the old Law No.11 of 1967, with an objective of increasing domestic and foreign investments in mining.

Reasons to buy

Gain an overview of Indonesia's mining fiscal regime.

Companies mentioned

Table of Contents

1 Executive Summary

2 The Indonesian Mining Industry – Governing Bodies

2.1 Ministry of Energy and Mineral Resource (MEMR)

2.2 Directorate General of Mineral and Coal

2.3 Ministry of Environment

2.4 Nuclear Energy Regulatory Agency (Bapeten)

3 The Indonesian Mining Industry – Governing Laws

3.1 Law 4/2009

3.2 Domestic Market Obligation (DMO)

4 The Indonesian Mining Industry – Mining Licenses

4.1 Mining Efforts License

4.2 Special Mining Business License (IUPK)

4.3 Contract of Work (CoW) or Coal Contract of Work (CCoW)

4.4 Divestment Mining Regulation

5 Indonesian Mining Industry – Rights and Obligations

5.1 Rights

5.2 Obligations

6 The Indonesian Mining Industry – Key Fiscal Terms

6.1 Central Taxes

6.2 Royalties

6.3 Capital Gains Tax

6.4 Corporate Income Tax

6.5 Depreciation

6.6 Real Property Tax

6.7 Withholding Tax

6.8 Branch Profits Tax

6.9 Loss Carry Forward

6.10 Value Added Tax (VAT)

7 Future Development

8 Appendix

8.1 Abbreviations

8.2 Methodology

8.3 Secondary Research

8.4 Primary Research

8.5 Contact GlobalData

8.6 About GlobalData

8.7 GlobalData’s Services

8.8 Disclaimer

List of Tables

Table 1: The Mining Industry in Indonesia – Fiscal Regime Terms and Other Taxes, 2014

Table 2: The Mining Industry in Indonesia – Minimum Shareholder Holding after Divestment (%), 2014

Table 3: The Mining Industry in Indonesia – Depreciation Tax Rates (%), 2014

List of Figures

Figure 1: The Mining Industry in Indonesia – Commodity Mines at Different Stages (Number of Mines), 2014

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