Government Regulation No. 27 / 2017 (PP 27) revises earlier guidance (Government Regulation No. 79 / 2010 (PP 79)) regarding cost recovery and income tax on upstream oil and gas activities. The new rules have an effective date of 19 June 2017.
The goal of PP 27 was to address certain concerns raised by various stakeholders regarding PP 79, and aim at improving the investment climate within the industry and at increasing the discovery of oil and gas reserves. It also has been expected to enhance legal certainty in upstream oil and gas investment activities.
PP27 is viewed as clarifying and resolving certain long-disputed industry issues—such as cost sharing, head office costs allocation, and land and building tax issues. However, not all uncertainties have been resolved.
Read a July 2017 report [PDF 221 KB] prepared by the KPMG member firm in Indonesia
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