Gas & LNG Tax Compliance

Domestic pipeline gas sales to households and small customers receive government-borne VAT (PPN DTP) facilities. Industrial and commercial gas customers are subject to standard 11% VAT. LNG exports are subject to 0% VAT. Input VAT related to gas production and processing remains creditable even for supplies benefiting from VAT facilities, subject to applicable regulations.

PBB for oil and gas work areas uses a specialized calculation: NJOP of land (per m²) × work area size plus NJOP of buildings (per m²) × building area × applicable rate (maximum 0.5%). NJOP for offshore work areas differs from onshore rates. Oil and gas PBB is a deductible expense for corporate income tax purposes, not a tax credit.

Yes, the government provides enhanced fiscal incentives for marginal gas field development through the gross split PSC mechanism under PP 27/2017, including: investment credits, DMO holidays (exemption from domestic market obligation), and additional contractor splits. These incentives are negotiated in the PSC contract and require approval from SKK Migas and the Ministry of Finance.

Take-or-pay payments received under LNG contracts (payments for contracted volumes even if not physically lifted) are generally treated as taxable income subject to standard corporate income tax. The VAT treatment depends on whether physical delivery occurs in the same period. If the payment is received without matching physical delivery, the VAT treatment should be analyzed based on the specific contract terms and applicable VAT regulations.

Yes. We are registered tax consultants and support clients with compliant, professional tax advisory and representation.

Contact us early. We help analyze the risk, prepare supporting documents, draft the response, and assist discussions with the tax office.

It depends on your structure and transactions. We identify legal efficiencies, incentives, and reporting improvements without crossing into tax evasion.