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The upstream oil and gas industry is a capital-intensive and high risk industry. In order to share the risk that occur in managing oil and gas fields, the contractor may transfer some of its participating interest to other parties. In respect of such transactions, the oil and gas contractor shall be obliged to fulfill the tax obligations on a self assessment basis including the obligations that related to the imposition of Branch Profit Tax. To achieve that, one of the supporting factors is the consistency between of regulations governing the imposition of Branch Profit Tax on transfer of participating interest transactions in upstream oil and gas industry. This study discusses the Branch Profit Tax imposition on transfer of participating interest as regulated in Government Regulation Number 79 Year 2010 (GR 79/2010), Minister of Finance Regulation Number 257/PMK.03/2011 (MoF 257/2011), and Letter of Jakarta Khusus Regional Tax Office (RTO) Number S-5996/WPJ.07/2015. This research uses qualitative research approach and data collection technique through literature study and field study by conducting in-depth interview with informants from various relevant stakeholders. The result of the research concludes that the provision of Branch Profit Tax imposition as stipulated in Letter of Jakarta Khusus RTO Number S-5996/WPJ.07/2015 is inconsistent with the provisions set forth in GR 79/2010 and MoF 257/2011 resulting in legal uncertainty. In accordance with the theory and concept of taxation, the imposition of Branch Profit Tax on transaction of transfer of participating interest is reasonable. The official needs to evaluate the regulations related to Branch Profit Tax on transfer of participating interest so that it can provide consistency and legal certainty for all parties, both for the Directorate General of Taxation as fiscus and for the Contractor as a taxpayer, as well as in accordance with the existing theory and concept of taxation.

branch profit tax; transfer of participating interest; upstream oil and gas industry; material tax law certainty; formal tax law certainty