Maximum Remuneration for Foreign Workers

Minister of Finance Regulation No. 258/PMK.011/2011 on Maximum Remuneration Levels for Foreign Workers of Oil and Gas Work Contract Contractors (“Regulation”) was issued to implement Article 12 (3) of Government Regulation No. 79 of 2010 on Recoverable Operating Costs and Income Tax Treatment in the Upstream Oil and Gas Industry (“Regulation 79/2010”).

Article 12 of Regulation 79/2010 establishes the criteria for operating costs that can be recovered for production sharing and calculating income taxes. For example, operating costs must use reasonable prices and be directly associated with petroleum operation activities. Article 12 (3) states that the limits on the maximum costs associated with the remuneration of foreign workers will be stipulated in a Minister of Finance Regulation.