Certain contractually based concessions are available in Indonesia. These include Production Sharing Contracts (PSCs), Contract of Works (CoWs) and Mining Business Licenses (Izin Usaha Pertambangan/IUP).

Companies engaged in upstream oil and gas typically have to calculate CIT in accordance with their PSCs. The PSCs can be “conventional” with CIT effectively based on cost recovery principles or “gross split” which more closely follow the general CIT rules.

Certain companies engaged in metal, mineral and coal mining are governed by CoWs for the CIT calculation. Different provisions may apply including in respect of CIT rates, deductible expenses and how taxable income is calculated. CoW arrangements are however no longer available under the 2009 Mining Law and recent mining will generally follow an IUP concession. The Mining Law stipulates that general prevailing tax laws/regulations apply to these mining projects. Specific tax regulations however also exist for non-coal mining IUPs.