Professional Documents
Culture Documents
Taxes on motor
vehicle and
heavy equipment
10%
Non-public vehicles
1%-2% for the frst vehicle
owned
Calculated by reference
to sales value and a
weight factor (size, fuel,
type, etc.) Government
table will be published
annualy to enable
calculation.
2% - 10% for the second
and more vehicle owned
0.5% - 1% - public vehicles
0.1% - 0.2% heavy
equipment vehicle
2
Title transfer
fees on motor
vehicle, above-
water vessels
and heavy
equipment
20%
Motor vehicle
20% - on frst title transfer
1% on second or more title
transfer
Heavy equipment
0.75% - on frst title
transfer
3 Tax on motor
vehicle fuel
10% Public vehicles: at least
50% lower than tax on
non-public vehicle fuel
(depending each region)
Sales price of fuel
(gasoline, diesel fuel
and gas fuel)
72 Mining in Indonesia Investment and Taxation Guide
Appendix A
Type of Regional Tax
Maximum
Tariff
Current Tariff Imposition Base
4 Tax on the
collection and
utilisation of
underground
water and
surface water
10% Tariff on surface water only Purchase value of water
(determined by applying
a number of factors).
B. Regency and Municipal Taxes
5
Tax on street
lighting
10%
a. General Survey 0.01 0.03 0.05 0.10 0.025 0.05 Second Generations
deadrent follows the
prevailing deadrent
tariff
b. Exploration 0.08 0.20 0.20 0.70 0.10 0.35
c. Feasibility 0.20 1.00 0.50
d. Construction 0.20 1.00 0.50
e. Operation 1.00 2.00 - 4.00 1.50 3.00
2 Production royalty rate
(%)
13.5% 13.5% 13.5% Calculated from coal
sales price minus
certain marketing/
selling expenses
3 CIT
a. Tax Rates 35% for the
frst ten years
of Operating
Period;
45% thereafter
Follows the
prevailing tax
rates. The rate is
reduced to 28%
in 2009 and to
25% from 2010
onwards.
Maximum rate
of 30% (tax
rate reduction
subject to a
Government
Regulation)
b. Depreciation rates
Non-building assets:
i. Straight line 12.5% Follows the
prevailing tax
depreciation
rates
10% -50% For Third Generation,
the tax depreciation
rates only apply to
tangible assets located
in the Contract Area.
Otherwise, provision
under the Income Tax
Law Year 1994 should
prevail.
ii. Double declining Not Applicable 20% - 100%
Building assets:
i. Straight line 12.5% Follows the
prevailing tax
depreciation
rates
10% -20%
ii. Double declining Not Applicable Not Applicable
iv. Damage/losses
not compensate
for insurance
v. Payments of
royalties or other
payments in re-
spect of patent,
design, technical
information and
services
78 Mining in Indonesia Investment and Taxation Guide
Appendix D
No Item
First
Generation
Second
Generation
Third
Generation
Remarks
vi. Losses from
obsolescence or
destruction of
inventory
Provision is not
deductible
vii. Rentals
viii. Deadrent, surface
rent, production
royalties, stamp
duty, and other
levies
ix. Sales tax Silent
x. Uncredited VAT Silent
xi. Expenses
for treating,
processing,
repairs and
maintenance,
handling, storing,
transporting and
shipping
xii. Expenses for
commissions and
discounts
xiv. Expenses
incurred prior to
the establishment
of the company
and expended by
a shareholder
Silent x For the third
generation, it is
deductible provided the
expenditures have been
audited by independent
auditor and approval
from the DGT has been
obtained
Sales, General &
Administation
i. Salaries and
wages
vii. Communication
and offce
expenses
x. Legal and
auditing expenses
xii. Exploration
expense
note: remittance
is required
but will get
reimbursement
Exempted
Exempted/
reduced rates
up to the tenth
anniversary
of Operating
Period, in
accordance
with prevailing
regulations
Exempted/
reduced rates
up to the tenth
anniversary
of Operating
Period, in
accordance
with prevailing
regulations
Exemption of import
duty is subject to BKPM
Master List approval
8 Other taxes & levies
a. Regional taxes
(e.g. motor vehicles and
street lighting levy)
Regional
Development
Tax (IPEDA):
maximum of
US$100,000 a
year
Applicable Follows the
prevailing
Regional Tax
Law at the rate
not exceeding
the prevailing
rate at the
signing date
Second Generation
follows the prevailing
laws and regulations
b. Land and
building tax
Silent Applicable Applicable Second Generation
follows the prevailing
law and regulations
No Item Third Generation Fourth Generation Fifth Generation Sixth Generation Seventh Generation Remarks
1
a. General Survey 0.01 - 0.03 0.025 - 0.05 0.025 - 0.05 0.025 - 0.05 0.025 - 0.05
b. Exploration 0.08 - 0.2 0.1 - 0.35 0.1 - 0.35 0.1 - 0.35 0.1 - 0.35
c. Feasibility 0.2 0.5 0.5 0.5 0.5
d. Construction 0.2 0.5 0.5 0.5 0.5
e. Operation 1.00 - 2.00 1.50 - 3.00 1.50 - 3.00 1.50 - 3.00 1.50 - 3.00
2 Production royalty rate (%) Annex E Annex F Annex F Annex F Annex F Annex F of the CoW usually provides
details of the royalty rates.
3 Corporate Income Tax
a. Tax Rates Follows the prevailing laws,
but not higher than:
- 35% for the frst fve years
of Operating Period;
- 40% for the second fve
years of Operating Period;
- 45% thereafter.
Maximum 35% Maximum 35% Maximum 30%
(potential tax
rate reduction is
available subject
to a Government
Regulation)
Maximum 30%
(potential tax
rate reduction is
available subject
to a Government
Regulation)
b. Depreciation rates
Non-building assets:
i. Straight line 12.5% Not Applicable Group 1 & 2 follows
ITL 1984
Group 3: 12.5%
10% -50% 10% -50% For the ffth generation, the tax
depreciation rates only apply to tangible
assets located in the Contract Area.
Otherwise, provision under the 1984
Income Tax Law should prevail.
ii. Double declining Not Applicable 25% Group 1 & 2 follows
ITL 1984
20% - 100% 20% - 100% For the sixth and seventh generations,
the tax depreciation rates only apply to
tangible assets located in the Contract
Area. Otherwise, provision under the
1994 Income Tax Law should prevail.
Building assets:
i. Straight line 12.50% 25% 12.50% 10% -20% 10% -20%
ii. Double declining Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable
c. Amortisation rates (%)
a. Straight line 12.5% Not Applicable 25.0% 10% -50% 10% -50% Under most CoWs, costs incurred
prior to commercial operation may be
deferred and amortised
b. Double declining Not Applicable 25% Not Applicable 20% - 100% 20% - 100%
Summary of Mineral CoW generations
Mining in Indonesia Investment and Taxation Guide 83
Appendix D
No Item Third Generation Fourth Generation Fifth Generation Sixth Generation Seventh Generation Remarks
d. Accelerated Depreciation
Non-building assets: 25% Not Applicable Not Applicable Not Applicable Not Applicable For the third generation, accelerated
depreciation can only be claimed within
any one of the frst four years of the life
of the assets
Building assets: 10% Not Applicable Not Applicable Not Applicable Not Applicable
e. Investment credits 20% of total investment Not Applicable Not Applicable Not Applicable Not Applicable At the rate of 5% a year
f. Deductible expenses:
Operating Expenses:
i. Cost of materials, supplies,
equipment and utilities
vii. Rentals
viii. Deadrent, surface rent,
production royalties, stamp
duty, and other levies
ix. Sales tax Silent Silent Silent Silent
x. Uncredited VAT Silent
xi. Expenses for treating,
processing, repairs and
maintenance, handling, storing,
transporting and shipping
xii. Expenses for commissions and
discounts
4 Withholding Tax
i. Dividends, interest and royalties 10% 15% for domestic tax
payer 20% for foreign
tax payer
15% for domestic tax
payer 20% for foreign
tax payer
0% to 20% 0% to 20%