Indonesia has established tax treaties with Algeria to prevent double taxation and encourage cross-border investments. See detailed information on Indonesia-Algeria tax treaties below.
AGREEMENT BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE DEMOCRATIC PEOPLE'S REPUBLIC OF ALGERIA
FOR
THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
AND ON CAPITAL
Article 1
PERSONAL SCOPE
Article 2
TAXES COVERED
This Agreement shall apply to taxes on income and on capital imposed on behalf of one of the Contracting State, of its political sub divisions or local authorities, irrespective of the manner in which they are levied.
There shall be regarded as taxes on income and on capital, all taxes imposed on total income or capital or on elements of income, including taxes on gains from the alienation of movable or immovable property.
| (a) | in the case of Algeria : | |
| (i) | tax on global total income | |
| (ii) | tax on profits of companies | |
| (iii) | tax on professional activities | |
| (iv) | net wealth tax | |
| (v) | "royalties" and taxes on the outcome of prospect, research, exploitation, transport of hydrocarbon by way of pipeline. | |
| (hereinafter referred to as "Algerian tax"); | ||
| (b) |
in the case of
Indonesia: |
|
The Agreement shall also apply to any identical or substantially similar taxes on income which are imposed after the date of signature of the Agreement in addition to, or in place of, those referred to in paragraph 3. The competent authorities of the Contracting States shall notify each other of any substantial changes which have been made in their respective taxation laws.
Article 3
GENERAL DEFINITIONS
For the purposes of this Agreement, unless the context otherwise requires:
| (a) |
the term "a Contracting State and the other Contracting State" means Indonesian or Algeria as the context required. |
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| (b) | (i) |
the term "Indonesia" comprises the territory of the Republic of Indonesia as defined in its laws and the adjacent areas over which the Republic of Indonesia has sovereignty, sovereign rights or jurisdiction in accordance with the provisions of the United Nations Convention on the Law of the Sea, 1982; |
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| (ii) |
the term "Algeria" means the Democratic People's Republic Algeria used in its geographical sense it means the territory of Algeria including : |
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| (a) |
any region located on the territorial waters of Algeria which in conformity with international law and by virtue of the law of Algeria is the region within which Algeria may have rights on the seabed and the subsoil of the sea and their natural resources, and |
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| (b) |
the seas and airspace over the regions mentioned in paragraph (a) regarding any activity related to exploration or exploitation of natural resources carried out in this region. |
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| (c) |
the term "person" includes an individual, a company, and any other body of persons; |
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| (d) |
the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes; |
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| (e) |
the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean, respectively, an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; |
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| (f) |
the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; |
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| (g) |
the term "competent authority" means: |
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| (i) |
in Indonesia: |
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| (ii) |
in Algeria : |
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| (h) |
the term "national" means: |
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| (i) |
any individual possessing the nationality of a Contracting State; |
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| (ii) |
any legal person, partnership, and association deriving its status as such from the laws in force in a Contracting State; |
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As regards the application of the Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Agreement applies.
Article 4
RESIDENT
For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management, or any other criterion of a similar nature.
Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:
| (a) |
he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interests); |
| (b) |
if the Contracting State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has a habitual abode; |
| (c) |
if he has a habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State in which he is a national; |
| (d) |
if he has a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. |
Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the States shall settle the question by mutual agreement on a case by case basis.
Article 5
PERMANENT ESTABLISHMENT
For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
The term "Permanent Establishment" includes especially:
|
(a) |
a place of management; |
| (b) | a branch; |
| (c) | an office; |
| (d) | a factory; |
| (e) | a workshop; |
| (f) | a sales store, a warehouse or premises used as sales outlet; |
| (g) | a farm or plantation; |
| (h) |
a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; |
| (i) |
a building site, a construction, assembly or installation project, or supervisory activities in connection therewith but only where such site, project or activities continue of period more than 3 months; |
| (j) |
the furnishing of services, including consultancy services by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only where activities of that nature continue (for the same or a connected project) within the country for a period or periods aggregating more than 3 months within any twelve month period. |
Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include:
| (a) |
the use of facilities solely for the purpose of storage or display or goods or merchandise belonging to the enterprise; |
| (b) |
the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display; |
| (c) |
the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; |
| (d) |
the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or of collecting information, for the enterprise; |
| (e) |
the maintenance of a fixed place of business solely for the purpose of advertising, or for the supply of information, or any other activity of a preparatory or auxillary character; |
| (f) |
the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character. |
Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 6 applies - is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of any activities which that person undertakes for the enterprise, if such a person:
|
(a) |
has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 3 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph; |
| (b) |
has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise; or |
| (c) |
has no such authority, but manufactures or processes in that State for the enterprise goods or merchandise belonging to the enterprise. |
An insurance enterprise of a Contracting State shall, except with regard to reinsurance, be deemed to have a permanent establishment in the other Contracting State if it collects premiums in that other State or insures risks situated therein through an employee or through a representative who is not an agent of an independent status within the meaning of paragraph 6.
An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise or its associated enterprises, he will not be considered an agent of an independent status within the meaning of this paragraph.
The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.
Article 6
INCOME FROM IMMOVABLE PROPERTY
Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.
The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property.
The provisions of paragraph 1 shall also apply to income derived from the direct use, letting, or use in any other form of immovable property.
The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.
Article 7
BUSINESS PROFITS
| (a) | that permanent establishment; |
| (b) | sales in that other State of goods or merchandise of the same or similar kind as those sold through that permanent establishment; or |
| (c) | other business activities carried on in that other State of the same or similar kind as those effected through that permanent establishment. |
Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.
In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purpose of the business of the permanent establishment including executive and general administrative expense so incurred, whether in the State in which the permanent establishment is situated or elsewhere. However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees, or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged, otherwise than towards reimbursement of actual expenses, by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees, or other similar payments in return for the use of patents or other rights, or by way of commission for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the head office of the enterprise or any of its other offices.
Insofar as it has been customary in a Contracting State to the determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.
For the purpose of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.
Article 8
SHIPPING AND AIR TRANSPORT
Profits from sources within a Contracting State derived by an enterprise of the other Contracting State from the operation of ships in international traffic may be taxable only in that other State.
Profits from the operation of aircraft in international traffic shall be taxable only in the Contracting State of which the enterprise operating the aircraft is a resident.
The provision of paragraph 1 and 2 shall also apply to profits from the participation in a pool, a joint business, or an international operating agency.
Article 9
ASSOCIATED ENTERPRISE
| (a) |
an enterprise of a Contracting State participates directly or indirectly in the management, control, or capital of an enterprise of the other Contracting State, or |
| (b) |
the same persons participate directly or indirectly in the management, control or capital an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. |
Where a Contracting State includes in the profits of an enterprise of that State - and taxes accordingly - profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of the Agreement and the competent authorities of the Contracting States shall, if necessary consult each other.
A Contracting State shall not change the profits of an enterprise in the circumstances referred to in paragraph 1 after the expiry of the time limits provided in its national laws.
Article 10
DIVIDENDS
Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the laws of that State, but if the recipient is the beneficial owner of the dividends, the tax so charged shall not exceed 15 per cent of the gross amount of the dividends. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation. The provisions of this paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.
The term "dividends" as used in this Article means income from shares, "jouissance" shares or "jouissance" rights, mining shares, founders' shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident.
The provisions of paragraph 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other state may not impose any tax on the dividends paid by the company except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividend paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.
Notwithstanding any other provisions of this Agreement where a company which is a resident of a Contracting State has a permanent establishment in the other Contracting State, the profits of the permanent establishment may be subjected to an additional tax in that other State in accordance with its law, but the additional tax so charged shall not exceed 10 per cent of the amount of such profits after deducting therefrom income tax and other taxes on income imposed thereon in that other State.
Article 11
INTEREST
Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
However, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 15 per cent of the gross amount of the interest. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.
Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and derived by the Government of the other Contracting State including local authorities thereof, a political subdivision, the Central Bank or any financial institution controlled by that Government, shall be exempt from tax in the first-mentioned State.
| (i) | Central Bank of each of the Contracting States; |
| (ii) |
such other financial institution, the capital of which is wholly owned by the Government of each of the Contracting State, as may be agreed from the time to the time between the competent authorities of the Contracting States. |
The term "interest" as used in this Article means income from debt-claims of every kind, whether or not secured by a mortgage, and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, as well as to income assimilated to income from money lent by the taxation law of the State in which the income arises, including interest on deferred payment sales.
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with a) such permanent establishment or fixed base, or with b) business activities referred to under c) of paragraph 1 of Article 7. In such case, the provisions of Article 7 or 14, as the case may be, shall apply.
Interest shall be deemed to arise in a Contracting State when the payer is that State itself, its political sub division or a local authority, or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
Where by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.
Article 12
ROYALTIES
Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
However, such royalties may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the recipient is the beneficial owner of the royalties the tax so charged shall not exceed 15 percent of the gross amount of the royalties. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.
The term "royalties" as used in this Article means payments, whether periodical or not, and in whatever form or name or nomenclature to the extent to which they are made as consideration for :
| (a) | the use of, or the right to use, any copyright, patent, design or model, plan, secret formula or process, trademark or other like property or right; or | |
| (b) | the use of, or the right to use, any industrial, commercial or scientific equipment; or | |
| (c) | the supply of scientific, technical, industrial or commercial knowledge or information; or | |
| (d) | the supply of any assistance that is ancillary and subsidiary or enjoyment of, any such property or right as is mentioned in subparagraph (a), any such equipment as is mentioned in sub-paragraph (b) or any such knowledge or information as is mentioned in subparagraph (c); or | |
| (e) | the use of, or the right to use : | |
| (i) | motion picture films; or | |
| (ii) | films or video for use in connection with television, or | |
| (iii) | tapes for use in connection with radio broadcasting, or | |
| (f) | total or partial forbearance in respect of the use or supply or any property or right referred to in this paragraph. | |
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of the royalties are paid is effectively connected with a) such permanent establishment or fixed base, or with b) business activities referred to under c) of paragraph 1 of Article 7. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a local authority, or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payment shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.
Article 13
CAPITAL GAINS
Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.
Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment alone or with the whole enterprise or of such a fixed base, may be taxed in that other State.
Gains derived by a resident of a Contracting State from the alienation of ships or aircraft operated in international traffic and movable property pertaining to the operation of such aircraft shall be taxable only in that State.
Gains from the alienation of any property other than that referred to in preceding paragraphs 1, 2 and 3 shall be taxable only in the Contracting State of which the alienator is a resident.
Article 14
INDEPENDENT PERSONAL SERVICES
Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State except :
| (a) |
he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; or |
| (b) |
he is present in that other State for a period or periods exceeding in the aggregate 91 days in any twelve months period. If he has such a fixed base or remains in that other State for the aforesaid period or periods, the income may be taxed in that other State but only so much of it as is attributable to that fixed base or is derived in that other State during the aforesaid period or periods. |
The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, engineers, lawyers, dentists, architects, and accountants.
Article 15
DEPENDENT PERSONAL SERVICES
Subject to the provisions of Articles 16, 18, 19, and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.
Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned Contracting State, if:
| (a) |
the recipient is present in that other State for a period or periods not exceeding in the aggregate 91 days within any twelve months period; and |
| (b) |
the remuneration is paid by, or on behalf of, an employer who is not a resident of that other State; and |
| (c) |
the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. |
Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State shall be taxable only in that State.
Article 16
DIRECTOR'S FEES
Director's fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or any other similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.
The remuneration, which a person to whom paragraph 1 applies derives from the company in respect of the discharge of day-to-day functions of a managerial or technical nature may be taxed in accordance with the provisions of Article 15. (Dependent Personal Services).
Article 17
ARTISTES AND ATHLETES
Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.
Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised.
Notwithstanding the provisions of paragraphs 1 and 2, income derived from activities referred to in paragraph 1 performed under a cultural agreement or arrangement between the Contracting States shall be exempt from tax in the Contracting State in which activities are exercised if the visit to that State is wholly or substantially supported by funds of one or both of the Contracting State, a local authority or public institution thereof.
Article 18
PENSIONS
Pensions and annuities arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in both Contracting States.
Article 19
GOVERNMENT SERVICE
| 1. | (a) |
Remuneration, other than a pension, paid by a Contracting State, or a local authority thereof to an individual in respect of services rendered to that State or authority shall be taxable only in that State. |
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| (b) |
However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who: |
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| (i) |
is a national of that State; or |
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| (ii) |
did not become a resident of that State solely for the purpose of rendering the services. |
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| 2. | (a) | Any pension paid by, or out of funds created by, a Contracting State or a local authority thereof to an individual in respect of services rendered to that State or authority shall be taxable only in that State. | |
| (b) | However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other State. | ||
| 3. |
The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a local authority thereof. |
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Article 20
TEACHERS, RESEARCHERS AND STUDENTS
An individual who visits a Contracting State at the invitation of that State or of a university, college, school, museum or other cultural institution of that State or under an official program of cultural exchange for a period not exceeding two years solely for the purpose of teaching, giving lectures or carrying out research at such institution and who is, or was immediately before that visit, a resident of the other Contracting State shall be exempt from tax in the first-mentioned State on his remuneration for such activity, provided that such remuneration is derived by him from outside that State.
Payments which a student, apprentice or business trainee who is or was immediately before visiting a Contracting State, a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training, receives for the purpose of his maintenance, education or training, shall not be taxed in that first-mentioned State, provided that such payments for one year do not exceed the total amount of seven hundred US dollars (US$ 700) or such other amount as specified from time to time by the competent authorities of both Contracting States.
Article 21
OTHER INCOME
Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing articles shall be taxable only in that State.
The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6 , if the recipient of such income, being resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal service from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of article 7 or Article 14, as the case may be, shall apply.
Notwithstanding the provisions of paragraph 1 and 2, items of income of a resident of a Contracting State not dealt with in the foregoing articles and arising in the other Contracting State may be taxed in that other State.
Article 22
TAX ON CAPITAL
| 1. | Capital represented by immovable property referred to in article 6, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other State. |
| 2. | Capital represented by movable property forming part of the business property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, may be taxed in that other State. |
| 3. | Capital represented by ships and aircraft operated in international traffic and by boats engaged in inland waterways transport, and by movable property pertaining to the operation of such ships, aircraft and boats, shall be taxable only in the Contracting State of which the enterprise is a resident. |
| 4. | All other elements of capital of a resident of a Contracting State shall be taxable only in that State. |
Article 23
ELIMINATION OF DOUBLE TAXATION
Double taxation shall be avoided in the following manner :
| 1. | (a) |
In the case of Algeria : |
| (b) |
In the case of Indonesia : |
|
| 2. | (a) | For the purpose of allowance as a credit in a Contracting State the tax paid in the other Contracting State shall be deemed to include the tax which is otherwise payable in that other State but has been reduced or waived by that State under its legal provisions for tax incentives. |
| (b) |
This provision shall apply for the first three years for which this Agreement is effective and the competent authorities shall consult each other to determine the specific tax incentive legislation in respect of which this provision shall apply. |
Article 24
NON-DISCRIMINATION
Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States.
The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.
Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected.
Interest, royalty and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State.
In this Article the term "taxation" means taxes which are the subject of this Agreement.
Article 25
MUTUAL AGREEMENT PROCEDURE
Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 Article 24, to that of the Contracting State of which he is a national. The case must be presented within two years from the first notification of the action resulting in taxation not in accordance with the provisions of the Agreement.
The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with this Agreement.
The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement.
The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. The competent authorities, through consultations, shall develop appropriate bilateral procedures, conditions, methods and techniques for the implementation of the mutual agreement procedure provided for in this Article
Article 26
EXCHANGE OF INFORMATION
The competent authorities of the Contracting State shall exchange such information as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement, insofar as the taxation thereunder is not contrary to the Agreement, in particular for the prevention of fraud or evasion of such taxes. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State. However, if the information is originally regarded as secret in the transmitting State it shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes which are the subject of the Agreement. Such persons or authorities shall use the information only for such purposes but may disclose the information in public court proceedings, or in judicial decisions.
In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:
| (a) |
to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; |
| (b) |
to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; |
| (c) |
to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (order public). |
Article 27
DIPLOMATIC AGENTS AND CONSULAR OFFICERS
Nothing in this Agreement shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special Agreements.
Article 28
ASSISTANCE IN COLLECTION
A Contracting State agrees to assist the other Contracting State in accordance with the appropriate rules in their respective domestic laws and regulations, in the collection of taxes referred to in this Agreement any amount payable in respect of any assessed taxes, pursuant to the applicable law of that other State.
That other Contracting State shall proceed to the collection of the outstanding taxes of the first-mentioned State in accordance with its domestic laws and regulations as is applicable to the collection of its outstanding taxes.
The assistance in the collection of outstanding taxes state accorded by a Contracting State shall have the same priority as those of the same nature in that State.
The competent authorities of the Contracting States may consult together for the purpose of giving effect to this article.
Article 29
ENTRY INTO FORCE
This Agreement shall enter into force on the later of the dates on which the respective Governments may notify each other in writing that the formalities constitutionally required in their respective States have been complied with.
This Agreement shall have effect:
| (a) | in respect of tax withheld at source to income derived on or after 1 January in the year next following that in which the Agreement enters into force; and |
| (b) | in respect of other taxes on income, for taxable years beginning on or after 1 January in the year next following that in which the Agreement enters into force. |
Article 30
TERMINATION
In such case, the Agreement shall cease to have effect:
| (a) | in respect of tax withheld at source to income derived on or after 1 January in the year next following that in which the notice of termination is given |
| (b) | in respect of other on income, for taxable years beginning on or after 1 January in the year next following that in which the notice of termination is given. |
IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this Agreement.
DONE in duplicate at Jakarta this day of April 28 th 1995 in two originals, each in Indonesian and Arabic languages, the two texts being equally authentic.
|
FOR THE GOVERMENT OF ALI ALATAS |
FOR THE GOVERNMENT OF MOHAMED SALAH DEMBRI |
PROTOCOL
At the moment of signing the Agreement for the Avoidance of Double Taxation, the undersigned have agreed upon the following understandings:
It is agreed that, in the case of Indonesia, the provisions of this Agreement with respect to taxes on capital shall be applicable only if such taxes are imposed under the Indonesian tax law.
Ad Article 2 subparagraph (3) (c) (iii) & (iv) :
It is understood that the terms "Tax on Professional Activities" and "Tax on Lumpsum Payment", in the case of Algeria, are taxes imposed on income.
Ad Article 2 subparagraph (3) (c) (v) :
It is understood that "Net Wealth Tax", in the case of Algeria, is tax imposed on capital.
Ad Article 10 paragraph (6) :
It is understood that the Additional Tax shall only apply to a resident of Algeria having a permanent establishment in Indonesia.
Ad Article 18 paragraph (2) :
The term "annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money's worth.
Ad Article 2 Subparagraph (3) (a) (vi) :
Ad Article 2 Sub-paragraph (3) (b) :
Since the Indonesian Government's revenue from oil, gas and other mining sectors has been set at a fixed figure including income taxes under production sharing contracts, contracts of works and other similar contracts, the Agreement shall not apply to such revenue.
Ad Article 8 paragraph (1), Article 13, Article 15 paragraph (3) and Article 22 paragraph (3) :
In respect of Article 8 paragraph (1), Article 13, Article 15 paragraph (3) and Article 22 paragraph (3), it is understood that the term "resident" includes also "the place of effective management" as referred to under Article 4.
Ad Article 30:
It is understood that the texts of the Agreement are done in Indonesian and Arabic Languages, both being equally authentic, whereas the English and French drafts are used as reference
IN WITNESS WHEREOF the undersigned, dully authorized thereto, have signed this protocol.
DONE in duplicate at Jakarta this day of April 28 th 1995 in two originals, each in Indonesian and Arabic Languages, the two texts being equally authentic.
|
FOR THE GOVERMENT OF ALI ALATAS |
FOR THE GOVERNMENT OF MOHAMED SALAH DEMBRI |