184 Adaro Energy Annual Report 2009
From Us to Y
ou
Running Adaro
Management Report
Owning Adaro
Governing Adaro
Financial Report
Contact Us Corporate Social
Responsibility Adaro in Summary
www.adaro.com
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 546
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008
Expressed in million Rupiah, unless otherwise stated
33. OPERATING EXPENSES continued b.
General and administrative 2009
2008
Employee costs 211,073
105,668 Others
260,920 97,390
471,993 203,058
34. TAXATION a.
Prepaid taxes 2009
2008 Company
Corporate income tax 7,378
1,878 VAT
118 -
7,496 1,878
Subsidiaries Corporate income tax
228,631 192,795
VAT 50,709
92,153 Income tax article 15
17,635 -
Final tax article 42 311
- 297,286
284,948 304,782
286,826
b. Recoverable taxes
2009 2008
VAT input 295,856
429,690 Vehicle fuel tax receivable
207,473 130,032
Deposit to Government 150,000
150,000 653,329
709,722 VAT input receivable represents the balance of VAT input to be offset against the production sharing payment government
royalty due to the Government of Indonesia. According to Government Regulation No. 1442000 which has been effective from 1 January 2001, raw coal prior to
processing to briquettes is no longer subject to VAT. Since that date, Adaro has been unable to seek restitution for VAT input. The Coordinating Minister for Economic has requested that the Minister of Finance postpone the implementation of this
regulation. The final decision regarding this matter cannot be predicted at present.
For the year ended 31 December 2009, Adaro has offset the claim for r ecoverable VAT input amounting to US100.2 million 31 December 2008: US50.9 million, 2007: US39.7 million, 2006: US36.4 million, 2005: US20.6 million, 2004: US22.4
million, 2003: US18.9 million, 2002: US25.5 million and 2001: US0.9 million against royalty payments due to the Government of Indonesia. Until 31 December 2009, Adaro was offsetting the claim for recoverable VAT input against royalty
payments totalling US315.5 million or equivalent to Rp 3,063,680.
Based on the CCA, Adaro was subject to sales tax on services received, in accordance with prevailing laws and regulations. However, with the enforcement of Law No. 8 of 1983 regarding VAT, the regulations on sales tax were no longer valid.
Adaro is of the opinion that the sales tax is different from VAT in both form and substance, and therefore VAT is a new tax. According to the provisions of the CCA, the Government shall pay and assume and hold Adaro harmless from this new tax. As
such, management believes that Adaro can recover its VAT input in this manner and expects that the outstanding balance will be recovered in full. These consolidated financial statements do not include any adjustments that might ultimately result from
the decision made by the Government regarding this matter. Refer to Note 39d for further details.
Adaro Energy Annual Report 2009 185 www.adaro.com
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 547
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008
Expressed in million Rupiah, unless otherwise stated
34. TAXATION continued b.
Recoverable taxes continued
In 2008, the Government of Indonesia through the Financial and Development Supervisory Board “BPKP” commenced an audit to resolve this dispute on VAT paid offsetting royalties payable for the period from 2001 to 2007. However, as at the date of this
report, the formal result of this audit has not been issued by the Government of Indonesia. In September 2008, Adaro has placed a fund amounting to Rp 150,000 as a deposit in relation to the settlement of this dispute.
In August 2009, BPKP continued its audit in relation to VAT and sales tax for the fiscal periods prior to 2001, as well as the 2008 fiscal period. As at the date of this report, the audit is still ongoing. Management is of the opinion that the audit result will
not have a material impact on the Groups financial position and cash flow. Vehicle fuel tax Pajak Bahan Bakar Kendaraan Bermotor“PBBKB” receivable represents the balance of PBBKB that may b e
compensated by the Goverment of Indonesia, since PBBKB is a new tax according to the provisions of the CCA..
c. Taxes payable
2009 2008
The Company Income tax articles 23 and 26
9,103 37
Final tax article 42 2,011
- Income tax article 21
197 876
VAT output -
365 11,311
1,278
Subsidiaries Corporate income tax
2,183,082 1,115,479
VAT 28,105
156 Income tax articles 23 and 26
20,075 28,946
Income tax article 21 9,049
5,214 Final tax article 42
436 124
Income tax article 15 -
17 2,240,747
1,149,936 2,252,058
1,151,214
d. Income tax expense
2009 2008
The Company Current
- -
Deferred 9,293
9,268 9,293
9,268
Subsidiaries Current
4,162,623 1,635,581
Deferred 52,815
42,873 4,109,808
1,592,708
Consolidated Current
4,162,623 1,635,581
Deferred 43,522
33,605 4,119,101
1,601,976