Calculation and Payment of Income Tax on First Tranche Petroleum

The Directorate General of Tax (“Directorate General”) has issued Regulation No. PER-20/PJ/2017 on Procedures for the Calculation and Payment of Income Tax on First Tranche Petroleum  (“Regulation 20/2017”). Regulation 20/2017 serves is an implementation of Article 25 (13) of Government Regulation No. 79 of 2010 on Refundable Operating Costs and Income-Tax Treatment for Upstream Oil and Natural Gas, which required further regulation in the form of a formula to be used in order to calculate income tax on First Tranche Petroleum (“FTP”)[1].