The Respondent adjusted the 2019 Oil and Gas PBB Building NJOP for PT PHKT by adding 383 wells and 3 platforms deemed unreported. This correction was based on Article 8 paragraph (2) of the PBB Law and PMK-131/2017, where tax authorities assessed that assets within a working area remain tax objects even if inactive. However, the core conflict lay in the NJOP value set by the Respondent, reaching IDR 54.7 million per sqm for the disputed objects, while regular objects were valued at only IDR 129 thousand per sqm. The Appellant countered, arguing that most objects had undergone Plug and Abandon (PA) procedures or were in the process of write-off (FUPP), thus providing no further economic benefit under the Gross Split scheme.
In its legal consideration, the Board of Tax Judges stated that while assets within a working area are legally PBB objects, the Respondent failed to prove consistency in its appraisal. The stark valuation discrepancy indicated that the Respondent ignored actual physical conditions and depreciation of non-functional buildings. The resolution saw the judges granting the entire appeal as the Respondent's assessment did not reflect fair market value or the principle of equity. The implication of this decision reinforces that tax authorities must not overlook the physical reality and legal status of assets (such as State-Owned Assets/BMN) when determining NJOP, especially for assets no longer yielding value for contractors.
In conclusion, the accuracy of SPOP data and consistency in appraisal methods are pivotal in avoiding PBB disputes in the upstream oil and gas sector.
A Comprehensive Analysis and the Tax Court Decision on This Dispute Are Available Here
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