Indonesia: VAT exemption for coal mining sector | KPMG | GLOBAL
Share with your friends

Indonesia: Import duty, VAT exemption for coal mining sector

Indonesia: VAT exemption for coal mining sector

A regulation concerning an exemption or reduction of import (customs) duty and value added tax (VAT) on goods imported within the context of a contract of work for the coal mining sector is effective 3 February 2017.


Related content

Regulation No. 259/PMK.04/2016 was issued by the Ministry of Finance, and specifies that the exemption or reduction of import duty and/or VAT may only be granted to those contractors with contracts that set out information about the exemption of import duty and/or VAT. This tax exemption and/or reduction will be granted based on a master list prepared by the chairman of the Investment Coordinating Board (Badan Koordinasi Penanaman Modal—BKPM) or by a designated official on behalf of the Ministry of Finance. An import of goods that is not based on the master list will be subjected to import duty and/or VAT, except in the event of force majeure, whereby the invoice that has been approved by the chairman of BKPM or the appointed official may be used as replacement of the master list. 

The regulation also allows for the transfer of imported goods that have been granted an exemption or reduction of import duty and/ or VAT, in the event that the imported goods have been used for at least two years.

Regulation No. 259/PMK.04/2016 addresses the treatment of assignment, re-export and destruction of imported goods that have been granted the exemption or reduction of import duty and/or VAT, as well as the tax treatment related to the facility of import duty and/or VAT exemption or reduction that has been granted.


Read a 2017 report [PDF 278 KB] prepared by the KPMG member firm in Indonesia


Other topics discussed in this KPMG report concern:

  • Mineral and coal mining business permit
  • Production sharing contract - Gross-split scheme
  • New regulations on financial technology
  • New or amended regulations on insurance
  • Merger and consolidation of publicly traded companies

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal