Joint Inspections of Production-Sharing Contracts with Cost-Recovery Schemes for the Upstream Oil-and-Gas Business Sector

The Minister of Finance (“ Minister ”) has issued Regulation No. 34/PMK.03/2018 on Guidelines for the Implementation of Joint Inspections of Cooperation Contracts in the Form of Production-Sharing Contracts with Cost-Recovery Schemes for the Upstream Oil-and-Gas Business Sector (“ Regulation 34/2018 ”). The goal of this regulation is to increase the effectiveness of inspections of cooperation contracts in the form of production-sharing contracts with cost-recovery schemes. [1] Regulation 34/2018 sets out comprehensive guidelines for the implementation of joint inspections (“ Inspections ”), which refer to a series of activities that encompass the finding, gathering and processing of data and/or evidence relating to income-tax compliance by oil-and-gas contractors ( “Contractors” ) which are utilizing cost-recovery contract schemes. [2] Inspections are to be implemented either during or after the relevant income-tax year. [3] This edition of Indonesian Legal Brief will discuss the three implementation phases of these Inspections, as follows: