T AX P RESPECTIVE on Oil and Gas Industry by : Afan Aftory

1. TAXPRESPECTIVE on Oil and Gas Industryby : Afan Aftory Kuliah Umum 20 Mei 2017

2. Table of Contents • 1. Oil & Gas Industry-Introductory • 2. Upstream Tax - Practical • Specific Tax Obligation • System used to comply with tax regulation • Supporting of Tax Consultant, Tax Staff or Accounting Software to Comply Tax Regulation • Tax Assessment Letter/SKP, Tax Collection Letter/STP • Analysis of Tax Compliance • Analysis of Tax Management Practice

3. Oil & Gas Industry : Upstream, Midstream and Downstream UPSTREAM The upstream segment of the industry, often called exploration & production. Companies will search prospective areas for potential reserves of oil and gas and perform geological tests called seismic tests, to determine the size and composition of the resource. DOWNSTREAM The downstream sector involves the refining and processing of hydrocarbons into usable products such as gasoline, jet fuel and diesel. The refining process is a complex chemical process that helps separate the hundreds of hydrocarbon molecules into useful forms. Petrochemical plants also break down hydrocarbons into chemical compounds that are used to create a myriad of products ranging from plastics to pharmaceuticals. MIDSTREAM Often coupled with the downstream segment, the midstream sector involves the transportation, storage and marketing of various oil and gas products. Depending on the commodity and distance covered, transportation options can vary from small connector pipelines to massive cargo ships making trans-ocean crossings. Source : Petroleum Industry, Youth Committe

4. Our Business PERTAMINA in conducting business activities in the field of energy and petrochemicals, was divided into two sectors, namely upstream and downstream, and supported by the activities of Children's Subsidiaries and Joint Ventures. Upstreamactivities cover exploration and production of oil, gas, and geothermal. The aim of exploration activities is to discover new oil and gas reserves as a replacement of hydrocarbon that has been produced. Downstream Pertamina’s business operations in the downstream sector cover the Refinery, Marketing & Trading, and LNG businesses. Marketing & Trading Business covers the distribution of oil and petrochemical products directly produced by Pertamina’s refineries or imported, to domestic and overseas markets, and supported by distribution and transportation facilities by land and sea.

5. PETROLEUM INDUSTRY UPSTREAM MIDSTREAM DOWNSTREAM CRUDE OIL, CONDENSATE • Trading • Imports • Blends • Refining • Marketing & Trading PETROLEUM PRODUCTS Distributed trough fuel depots & stations (Kerosene, Gasoline, Diesel, HSD, Avtur, etc) Pipe Lines, Trucking, Shipping Refineries EXPLORATION & EXPLOITATION • Gas Trading/ Transmission • Processing • Marketing & Trading Petrochemical Plants GAS PRODUCTS Petrochemical Products LPG NATURAL GAS Transmission Lines LPG Plants Prod. Facilities • LNG Plant LNG • Export LNG

6. UPSTREAM MID STREAM & DOWNSTREAM

7. INDONESIA PETROLEUM CONTRACTS REVOLUTION CONCESSION Colonialism Era PRODUCTION SHARING CONTRACT Republic of Indonesia (UUD 1945) MINES ACT 1899 UU 44/1960 • UU 8/1971 • PP 35/1994 • (Ring Fencing) • UU 22/2001 • PP 42/2002 • (BPMIGAS) • PP 35/2004 • (………….) • PP 79/2010 • (Cost recovery • negative list) • Etc.. 1961: COW 1965: PSC I 1968: TAC (Pertamina) 1976: PSC II 1977: JOA 1986: JOA/ JOB 1988: PSC III (incentive) 1989: EOR 1995: PSC IV 2001: PSC V 2005: KSO (Pertamina) 2008: PSC VI 2017: PSC Gross Split 1885 1945 1960 1971 2001 1 2 3 … • Colonialism era: With concession right from Sultan Langkat, a commercial discovery achieved by A.J Ziljker on June 1885 & momentum of the establishment of Royal Shell at 1890. • Post independence era: Mining Right is owned by the state or the state company • Modern petroleum industri era: The PSC revolution

8. REFINERY PERTAMINA – KAPASITAS , KOMPLEKSITAS DAN KONFIGURASI PACIFIC OCEAN KASIM RefineryCAPACITY: 10 MBSD UNIT : C D U PLATFORMER SOUTH CHINA OCEAN Kaps : 1.03 juta Bbl/D Penduduk : 240 juta Ratio : 0.004 bbl/warga ARUN P. BRANDAN BONTANG MEDAN PAPUA SINGAPURA SULAWESI B.PAPAN DUMAI KALIMANTAN SUMATERA S. PAKNING PALEMBANG BALIKPAPAN Refinery CAPACITY : 260 MBSD UNIT : C D U I & II H V U HYDROCRACKER PLATFORMER WAX PLANT DUMAI & S. PAKNING Refinery CAPACITY : 170 MBSD UNIT : C D U H V U HYDROCRACKER DELAYED COKER PLATFORMER MUSI JAVA OCEAN BALONGAN CEPU JAKARTA BALI JAWA MUSI Refinery CAPACITY : 118 MBSD UNIT : C D U H V U F C C U POLY PROPYLENE POLY-ALKYATION CILACAP BALONGAN Refinery CAPACITY : 125 MBSD UNIT : C D U ARHDM RCC COMPLEX PROPYLENE REC. LPG PLANT PLATFORMER ISOMERIZATION CILACAP Refinery *) CAPACITY : 348 MBSD UNIT : CDU I & II PLATFORMER I & II LUBE-OIL COMPLEX I, II, III VISBREAKER PARAXYLENE PLANT SULFUR RECOVERY *) Di Cilacapsedangdibangun RCC Unit DenganKaps : 62 MB/D (selesai 2014) Refinery in Indonesia

9. Pola Suplai Gasoline 88 RON

10. 2a. Specific Tax Obligation-Oil & Gas Industry • Financial Quarterly Report (FQR) related to SPT 1771 • Pajak Penghasilan Migas berdasarkan PMK 79/2012 Corporate & Dividend Tax (C&D Tax) based on MoF Regulation No 79/2012

11. 2b. System used to comply with tax regulation • System MySAP to Tax • Tax Transformation

12. 2c. Supporting of Tax Consultant, Tax Staff or Accounting Software to Comply Tax Regulation • Organisasi, Tax Consultant , Acounting Software

13. 2d. Tax Assessment Letter/SKP, Tax Collection Letter/STP • Pengembalian pajak pada proses Keberatan,Banding

14. 2e. Analysis of Tax Compliance Predikat Wajib Pajak dengan Tingkat Kepatuhan Tertinggi “The Most Compliance Tax Payer”

15. 2e. Analysis of Tax Management Practice • Tax Management & Mapping • Material Management

16. TERIMA KASIH