Update on Emails

Posted: June 21, 2011 in News

Ingat post saya tentang email dari Managing Editor International Tax Review, Mr. Ralph Cunningham? Untuk lengkapnya bisa dilihat di link berikut :  http://indonesianmoviecrisis.org/2011/06/14/action-brings-reaction/

Sesuai janji, saya sudah menerjemahkan Reg No 10 – 1995 , Reg No 17 – 2006 dan PER-33-2009 untuk Mr. Cunningham. Saya mengirim terjemahan versi bahasa inggris berikut file PDF yang asli. Inilah isi email tersebut :

Dear Mr. Ralph Cunningham, 
Sorry for the late follow up. I managed to squeeze some time to translate:
  1. Regulation No.10/1995 : The original regulation Cineplex 21 and the official MPA distributors have followed for the last 2 decades
  1. Regulation No. 17/2006 : The new regulation that amends Reg. No.10/1995, and
  1. PER 33/2009 : The regulation created by the Directorate General of Customs and Excise 2 years ago, focusing solely on the calculation of royalties.
 And I have included the documents mentioned above, for your perusal.
Jero Wacik, the Minister of Toursim and Culture, time and time again has emphasized that Cineplex 21 and the distributors have failed to comply to the new regulation (Reg No.17/2006), regarding royalties.
(The statement can be found here:
That’s why, based on the audit the Directorate General of Customs and Excise have made last February, 21 Cineplex and the Distributors managed to rack up a debt of 314 billion Rupiahs, for failing to pay the tax as well as the penalty fee.
In the following, are the translated paragraph from both Reg No.17/2006 and Reg No.10/1995, regarding royalites :
The article from regulation no 10/1995 regarding royalty :
Article 15, point c
The amount of royalty or licensing fee that the buyer has to pay, either directly or indirectly, as a trade condition for imported goods under valuation, as long as said royalty and licensing fee is not added to the price paid, or payable for the imported goods itself.
The article from regulation no 17/1995 regarding royalty :
Article 15, paragraph 1, point c
The amount of royalty or licensing fee that the buyer has to pay, either directly or indirectly, as a trade condition for imported goods under valuation, as long as said royalty and licensing fee is not added to the price paid, or payable for the imported goods itself.
As you can see, they’re exactly the same. And they followed WTO’s Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (Customs Valuation Agreement), which can be found here :
 So, it is apparent that the good minister has failed to realize that both regulations stated the same thing about royalties.
The actual problem lies in the contents of the PER 33 2009, which can be found here: http://www.pajak.go.id/dmdocuments/PER-33-2009.pdf
In the following, is the whole content of the PER 33 2009
(Created by the Directorate General of Customs and Excise)
Article 1
(1)   The usage of cinematography work is conducted through a cinematography works agreement:
a.      A complete handover of copyrighted materials, without any terms or conditions, including any obligations for future compensations
b.      By giving the right to use the copyrighted cinematography works to another party, in the context of publishing and/or duplicating said works or related products, with certain usage terms, such as area or time restrictions.
c.      By giving the right to use the copyrighted cinematography works to another party, in the context of publishing said works by using a profit sharing agreement, between the copyright owner and the cinema business; or
d.      By giving the right to use the copyrighted cinematography works to another party, in the context of publishing said works without the rights to publish and/or duplicate said works or any related products.
(2)   The agreements that were mentioned in the 1st paragraph are applicable for both written and unwritten agreements
Article 2
(1)   Royalty is uncounted for in the revenue gained or accepted by the holder of the copyrighted cinematography works, as mentioned in the 1st article, paragraph 1, point a & d. 
(2)   Royalty is accounted for in the revenue gained or accepted from the usage of the copyrighted cinematography works, by the party that was given the right to distribute or publish said works, as mentioned in the 1st article, paragraph 1, point b & c.
Article 3
The amount of royalty, as mentioned in the 2nd article, paragraph 2, which will be the basis for the profit tax is :
a.      Equivalent to the amount of revenue accepted or gained by the party that was given the right to distribute or publish the copyrighted cinematography works, as mentioned in the 1st article, paragraph 1, point b; and
b.      10% of the profit shared between the copyright owner and the cinema business, as mentioned in the 1st article, paragraph 1, point c. 
Article 1 differentiated the kind of copyright usage. 21 Cineplex and the distributors clealry falls in the b & c category. While the a & d category is pretty rare (a being complete confiscation or handover, while d is piracy), don’t you think?
The 2nd paragraph of article 2 clearly state and link the b & c category as the ones that has to pay the royalties. (They have to, since it is the most common and legal practice in most countries in the world)
The 3rd article describes the amount of payment that the b & c category members has to pay. If it’s b, they have to pay the whole amount. If it’s c, they have to pay 10% of the profit shared between the copyright owner and the party that was granted the right to publish or distribute the cinematography works, i.e. 21 Cineplex & the distributors.
Movie sneak previews, premieres or world exclusive viewing falls to category b, while normal, day to day cinema business falls to category c. Either way, the government will make a lot of money from both.
Aside from the unfair calculation regarding royalties, strangely enough, the PER 33 2009 hasn’t been socialized, educated, or even enforced these last two years. It started to arise after the passing of the late Mr. Sudwikatmono (the owner of 21 Cineplex) last January. After the whole commotion, the Directorate General of Customs and Excise audited 21 Cineplex and Distributors using said regulation. Thus, creating the 314 Billion rupiahs debt. 
In this writer’s opinion, there are parties in the Directorate General of Customs & Excise that are trying to get direct money from the profit made between the copyright owners and the local cinema business. Whereas the local cinema business, as well as distributors of imported films in Indonesia already had to pay 23.75% excise duty, a 10% tax to the central government and another 10 to 15% of the profit from ticket sales to regional governments.
Currently, that is all I can share to you. Thank you for your time in reading this article, and thank you for your attention in this case. 
Best regards,
Marvel Sutantio
Di email tersebut saya menjelaskan kalau UU yang selama ini dibicarakan, digembar gemborkan dan dijadikan akar permasalahan oleh Jero Wacik, Agus Martowardojo atau staff Dirjen Pajak lainnya (yaitu tidak mengikuti UU No 17 / 2006) adalah salah.Karena pada kenyataannya, UU no 10 / 1995 yang selama ini diikuti oleh pihak 21 Cineplex & para distributor, memiliki aturan yang sama mengenai perhitungan royalti, seperti yang ada di UU No 17 / 2006 tersebut. Peraturan yang benar-benar mengatur besarnya royalti adalah PER 33 2009.
Untuk isi dari PER 33 2009 bisa dibaca di email saya diatas. Tapi akan saya post lagi dalam bahasa Indonesia di post berikutnya.
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