Oil businessmen need certainty on tax amnesty

JAKARTA. Oil and gas businessmen still hesitate to join the tax amnesty program, since most of the companies are facing problems with the legal status of their companies.

Most of their companies are special purpose vehicles (SPV) that are located abroad, but actively operate oil and gas blocs in Indonesia. Indonesian government considers the SPVs as permanent business entities or badan usaha tetap (BUT) that conduct business in Indonesia.

The Regulation of Minister of Finance No 127/2016 clarifies the mechanism of tax amnesty for non-active SPVs, or the SPVs that actually do not conduct active business operation. However, there is no spesific  tax amnesty regulation for active SPVs that actively conduct business in Indonesia, including oil and gas business.

According to the Head of Energy and Mineral Resources Department of Indonesian Businessmen Association (Apindo) Sammy Hamzah, most of oil and gas companies owned by local businessmen are SPVs with the status as BUT. The formation of SPVs in oil and gas business is normal. In the business, a contract can not be overlapped by another contract, and a contract belongs only to one legal entity. “That’s the rule in oil and gas business,” Sammy told Kontan on Thursday (1/9).

Sammy added, under such condition oil an gas businessmen hesitate wheter to join the tax amnesty or not. “Should the SVPs owners dissolve their companies to join tax amnesty?” Sammy said.

Expert Staff of State Revenue Department of Ministry of Finance Astera Primanto Bhakti promised to clarify the problem to oil and gas businessmen. “There will be a special session to clarify the problems related to SPVs role in oil and gas industry,” he stressed.

According to tax observer Darussalam SPVs with the status as BUT have similar obligations to other domestic tax payers. SPVs can join tax amnesty program by declaring their assets and paying the penalty rate at 2 percent of the value of the assets if they join the tax amnesty during the first period of the program. (Translator: Muhammad Farid)