Wirelines

Posted on 08 September 2010

Indonesia urged to keep tax rate level

IADC sent a letter in July to the Indonesian Department of Income Tax (DGT) urging the government to keep the country’s deemed profit rate level at 15%. The government is considering raising the deemed profit rate level in order to offset a reduction in the corporate income tax rate. Raising the deemed profit rate would take away from the tax relief that was intended by reducing the corporate income tax, IADC pointed out. The deemed profits-based taxpayer should enjoy the same tax relief as the net profits-based taxpayer and should not bear a disproportionate level of taxation. Moreover, Indonesia’s 6% combined rate (corporate tax income and branch profits) is in line with that of other deemed profits tax jurisdictions.

The letter was sent following a recent presentation IADC made to the DGT on current tax regulations. At the meeting, association members were able to bring up specific taxation issues with key DGT leaders.

Litigation by environmental groups

Environmental organizations have launched a flurry of anti-offshore drilling lawsuits in various federal courts. IADC, along with USOGA and IPAA, is an amicus curiae supporting API in opposing these lawsuits:

• Center for Biological Diversity (CBD), Sierra Club and Gulf Restoration v. Salazar (Fifth Circuit, New Orleans) targets 16 GOM exploration plans and development plans approved after 29 March.

• CBD v. Salazar (Washington, DC, District Court). This lawsuit seeks to forbid the Secretary from relying on “categorical exclusions” as grounds not to perform environmental assessments and/or environmental impact statements for all GOM E&P plans. It also seeks to nullify more than two dozen already-approved drilling plans.

• Defenders of Wildlife v. Salazar (Southern District, Alabama). This lawsuit raises the same issues as the second lawsuit except it also seeks to enjoin future GOM lease sale until a supplemental environmental impact statement has been prepared. It seeks to set aside leases awarded in the most recent lease sale.

• Gulf Restoration Network and Sierra Club v. Salazar (Eastern District, Louisiana). This lawsuit seeks to enjoin the application of NTL 2008-G04, which limited the required information in GOM exploration plans with respect to blowout scenarios and worst-case oil spill scenarios. It also seeks to impose broader information requirements retroactively for all deepwater permits.

Anti-Fouling Systems Convention

The United Kingdom has announced its accession to the AFS Convention. It will enter into force for the UK on 7 September 2010. Denmark has announced that its accession to the AFS Convention is extended to the Faroe Islands as of 4 June 2010.

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