Taxation ยท KBLI 05200

Precision Oil & Gas Tax Compliance

PSC tax planning, cost recovery audit, and upstream oil & gas fiscal incentive optimization

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What usually goes wrong

  • PSC Tax Regime Complexity

    Each PSC generation has different fiscal provisions: 44% corporate tax (old PSC) vs 22% (gross split), different DMO, FTP, and investment credits.

  • Oil & Gas VAT and Refunds

    Significant input VAT on operating costs and a refund process requiring strict documentation.

  • Branch Profit Tax and Transfer Pricing

    Foreign contractors are subject to 20% branch profit tax after corporate tax, plus transfer pricing documentation obligations.

What we do

  1. 01

    PSC Tax Compliance & Planning

    Managing tax obligations according to the PSC regime including tax entitlement calculation and contractor tax obligations.

    • Documented tax compliance
    • Ready for DGT audits
    • Fiscal incentives utilized
  2. 02

    VAT Recovery Management

    Tracking system for refundable input VAT with complete documentation to accelerate refunds.

    • Faster refunds
    • Optimal cash flow
    • Audit-ready documentation
  3. 03

    International Tax Structuring

    Optimizing international tax structure including tax treaty benefits, branch profit tax, and transfer pricing compliance.

    • Efficient BPT
    • Treaty benefits
    • TP documentation compliant

Related regulations

  • UU 22/2001

    Oil and Gas Law

    Legal basis for upstream and downstream oil & gas activities including PSC fiscal regime

  • PP 79/2010

    Oil & Gas Operating Costs and Tax

    Provisions on recoverable operating costs and income tax treatment in upstream oil & gas

  • PP 27/2017

    Oil & Gas Fiscal Regime

    Changes to PSC fiscal regime including gross split and tax incentives

If the tax office starts asking questions

The team that keeps your books and files your taxes also stays with you through an SP2DK, an audit, an objection and an appeal.

How we handle tax disputes

Frequently Asked Questions

What is the corporate tax rate for oil & gas companies?

For older PSC generations (pre-2010), corporate tax is 44% including 20% government share credited. For gross split PSCs, the general rate of 22% applies. Cost recovery PSCs have special provisions: tax borne by government on certain contracts. Each contract must be checked individually.

Is upstream oil & gas subject to VAT?

Upstream oil & gas is subject to VAT, but there are facilities for VAT not collected on imports and certain goods/services per applicable regulations. Input VAT related to facility-receiving activities may be refunded.

What is branch profit tax and how is it calculated?

BPT is 20% tax on taxable income of a PE after deducting corporate tax (effective 20% ร— 78% = 15.6% of net profit). BPT may be reduced or eliminated under tax treaties if the head office is in a treaty country. PEs must maintain TP documentation.

Who handles my tax work?

Your tax work is handled by Arunika's tax consultants. We confirm the scope, deadlines and price before work starts.

What should I do if I receive an SP2DK letter or tax audit notice?

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

What does tax planning cover?

We review your structure, transactions and available incentives so tax is calculated under the rules, without crossing into tax evasion. The outcome depends on your facts, so we do not promise a savings figure.

Related Industries

Tell us about your business

Send your line of business, rough annual turnover, and what is going wrong. We reply on WhatsApp.

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