Armenia

1.

This
Agreement shall apply to taxes on income and on capital imposed on behalf of each
Contracting State or of its administrative-territorial subdivisions or local
authorities, irrespective of the manner in which they are
levied.

2.

There shall
be regarded as taxes on income and on capital all taxes imposed on total income, on
total capital, or on Clements of income or of capital, including taxes on gains from the
alienation of movable or immovable property, taxes on the total amounts of wages paid by
enterprises, as well as taxes on capital
appreciation.

3.

The existing
taxes to which the Agreement shall apply are, in
particular:

(a)

in the case
of Indonesia

the income
tax;

(b)

in the case
of Armenia:

1. the profit tax;
2. the
   income tax;
3. the
   property tax;
4. the
   land tax.

4.

The Agreement
shall apply also to any substantially similar taxes which are imposed after the date of
signature of the Agreement in addition to, or in place of, the existing taxes. The
competent authorities of the Contracting States shall notify each other of any
substantial changes which have been made in their respective taxation
laws.

1.

For the
purposes of this Agreement, unless the context otherwise
requires:

(a)

the term
“Contracting State” means Indonesia or Armenia as the context
requires;

(i)

the term
“Indonesia” means the territory of the Republic of Indonesia as defined in its
laws;

(ii)

the term
“Armenia” means the territory of the Republic of Armenia as defined in its
laws;

(b)

the term
“person” includes an individual, a company and any other body of
persons;

(c)

the term
“company” means any body corporate or any entity which is treated as a body corporate
for tax purposes;

(d)

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;

(e)

the term
“international traffic” means any transport by a ship or aircraft, operated by an
enterprise of a Contracting State, except when the ship or aircraft is operated solely
between places in the other Contracting State;

(f)

the term
“competent authority” means:

(i)

in the case
of Indonesia

the Minister
of Finance or his authorized representative;

(ii)

in the case
of Armenia

the Minister
of Finance and Economy and the Minister of State Revenue or their authorized
representatives;

(g)

the term
“national” means:

(i)

any
individual possessing the nationality of a Contracting
State;

(ii)

any legal
person, partnership and association deriving its status as such from the laws in force
in a Contracting State.

2.

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
laws of that State concerning the taxes to which the Agreement
applies.

1.

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 incorporation, place of management, or any other criterion of a
similar nature.

2.

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 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 State with which his personal and economic relations are closer (centre
of vital interests);

(b)

if the 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 an habitual abode;

(c)

if he has an
habitual abode in both States, or in neither of them, he shall be deemed to be a
resident of the State of which he is a national;

(d)

if he is a
national of both States or of neither of them, the competent authorities of the
Contracting States shall settle the question by mutual
agreement.

3.

Where by
reason of the provisions of paragraph 1 a person other than an individual is a resident
of both Contracting States, then it shall be deemed to be a resident of the State under
the laws of which it derives its status as such.

1.

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.

2.

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 warehouse
or premises used as sales outlet;

(g)

a mine, an
oil or gas well, a quarry or any other place of exploration, exploitation or extraction
of natural resources, drilling rig or working ship used for exploration or exploitation
of natural resources.

3.

The term
“permanent establishment” likewise encompasses:

(a)

a building
site, a construction, assembly, or installation project or supervisory activities in
connection therewith, but only where such site, project or activities continue for a
period of more than 6 months;

(b)

the
furnishing of services, including consultative 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 120 days within any twelve month
period.

4.

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 of 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 of goods;

(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 carrying on, for the
enterprise, any other activity of a preparatory or auxiliary
character.

5.

Notwithstanding the provisions of paragraphs 1 and 2, where a
person other than an agent of an independent status to whom paragraph 7 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
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 4 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; or

(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)

manufactures
or processes in that State for the enterprise goods or merchandise belonging to the
enterprise.

6.

Notwithstanding the preceding provisions of this Article, an
insurance enterprise of a Contracting State shall, except in regard to re-insurance, be
deemed to have a permanent establishment in the other Contracting State if it collects
premiums in the territory of that other State or insures risks situated therein through
a person other than an agent of an independent
status.

7.

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 he will not be considered an agent of an independent status within the
meaning of this paragraph.

8.

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 a company a permanent establishment of the
other.

1.

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.

2.

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. Ships or aircraft shall
not be regarded as immovable property.

3.

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.

4.

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.

1.

The profits
of an enterprise of a Contracting State shall be taxable only in that State unless the
enterprise carries on business in the other Contracting State through a permanent
establishment situated therein. If the enterprise carries on business as aforesaid, the
profits of the enterprise may be taxed in the other State but only so much of them as is
attributable to:

2.

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.

3.

In
determining the profits of a permanent establishment, there shall be allowed as
deductions expenses which are incurred for the purposes of the permanent establishment,
including executive and general administrative expenses 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
enterprise, 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 determining
the profits of a permanent establishment, for amounts charged (otherwise than towards
reimbursement of actual expenses), by the permanent establishment to the enterprise, 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
enterprise.

4.

No profits
shall be attributed to a permanent establishment by reason of the mere purchase by that
permanent establishment of goods or merchandise for the
enterprise.

5.

For the
purposes 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.

6.

Insofar as it
has been customary in a Contracting State to 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.

7.

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.

1.

Profits from
the operation of ships or aircraft in international traffic shall be taxable only in the
Contracting State of which the enterprise operating the ships or aircraft is a
resident.

2.

Profits from
the operation of ships or aircraft referred to in paragraph I “shall also include the
maintenance or use of containers (and related equipment for the transport of containers)
in international traffic.

3.

The
provisions of paragraphs I and 2 shall also apply to profits from the participation in a
pool, a joint business or an international operating
agency.

1.

Where

2.

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 profit 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.

1.

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.

2.

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:

The competent
authorities of the Contracting States shall by mutual agreement settle the mode of
application of these limitations. This paragraph shall not affect the taxation of the
company in respect of the profits out of which the dividends are
paid.

3.

The term
“dividends” as used in this Article means income from any 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.

4.

The
provisions of paragraphs 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 case
the provisions of Article 7 (Business Profits) or Article 14 (Independent Personal
Services),as the case maybe, shall apply.

5.

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 dividends are attributable to 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 dividends paid or the
undistributed profits consist wholly or partly of profits or income arising in such
other State.

1.

Interest
arising in a Contracting State and paid to a resident of the other Contracting State may
be taxed in that other State.

2.

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 10 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.

3.

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 an administrative-territorial subdivision the
Central Bank or any financial institution controlled by that Government, the capital of
which is wholly owned by the Government of the other Contracting State as may be agreed
upon from time to time between the competent authorities of the Contracting States,
shall be exempt from tax in the first-mentioned
State.

4.

The term
“interest” as used in this Article means income from debt-claims of every kind, whether
or not secured by 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 or prizes attaching to such securities, bonds or
debentures.

5.

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)
sales or business activities referred to under c) of paragraph 1 of Article 7 (Business
Profits). In such case, the provisions of Article 7 (Business Profits) or Article
14 (Independent Personal Services), as the case may bet shall
apply.

6.

Interest
shall be deemed to arise in a Contracting State when the payer is that State itself, an
administrative-territorial subdivision, 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.

7.

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 the
Agreement.

1.

Royalties
arising in a Contracting State and paid to a resident of the other Contracting State may
be taxed in that other Contracting State.

2.

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 10 per cent 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.

3.

The term
“royalties” as used in this Article means payments of any kind received as a
consideration for the use of, or the right to use, any copyright of literary, artistic,
or scientific work including cinematography films (or films or tapes used for radio or
television broadcasting,) any patent, trade mark, design or model, plan, secret formula
or process, or for the use of, or the right to use, industrial, commercial or scientific
equipment, or for information concerning industrial, commercial or scientific
experience.

4.

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 which the royalties
are paid is effectively connected with a) such permanent establishment or fixed base, or
with b) sales or business activities referred to under c) of paragraph 1 of Article 7
(Business Profits). In such case, the provisions of Article 7 (Business Profits) or
Article 14 (Independent Personal Services), as the case may be, shall
apply.

5.

Royalties
shall be deemed to arise in a Contracting State when the payer is that State itself, an
administrative – territorial subdivision, 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.

6.

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 payments shall remain taxable
according to the laws of each Contracting State, due regard being had to the other
provisions of this Agreement.

1.

Gains derived
by a resident of a Contracting State from the alienation of immovable property referred
to in Article 6 (Income from Immovable Property) and situated in the other Contracting
State may be taxed in that other State.

2.

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 fixed base, may
be taxed in that other State.

3.

Gains derived
by an enterprise of a Contracting State from the alienation, of ships or aircraft
operated in international traffic or movable property pertaining to the operation of
such ships or aircraft shall be taxable only in that
State.

4.

Gains from
the alienation of any property other than that referred to in the preceding paragraphs,
shall be taxable only in the Contracting State of which the alienator is a
resident.

1.

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 unless
he has a fixed base regularly available to him in the other Contracting State for the
purpose of performing his activities or he is present in that other State for a period
or periods exceeding in the aggregate 120 days within any twelve month 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.

2.

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.

1.

Subject to
the provisions of Articles 16 (Directors Fees), 18 (Pensions), 19 (Government Services)
and 20 (Teachers and Researchers), 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 employement is so exercised, such remuneration as is derived therefrom may
be taxed in that other State.

2.

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 State
if:

3.

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.

1.

Notwithstanding the provisions of Articles 14 (Independent
Personal Services) and 15 (Dependent Personal Services), income derived by a resident of
a Contracting State as an entertainer, such as a theater, motion picture, radio or
television artiste, or a musician, or as a sportsman, from his personal activities as
such exercised in the other Contracting State, may be taxed in thar other
State.

2.

Where income
in respect of personal activities exercised by an entertainer or a sportsman in his
capacity as such accrues not to the entertainer or sportsman himself but to another
person, that income may, notwithstanding the provisions of Article 14 (Independent
Personal Services) and 15 (Dependent Personal Services), be taxed in the Contracting
Stale in which the activities of the entertainer or sportsman are
exercised.

3.

Notwithstanding the provisions of paragraphs 1 and 2, the
income derived from the 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 the activities are exercised if the visit to that State is
wholly or substantially supported by funds of one or both of the Contracting State, or
of its administrative-territorial subdivisions, or local authority or public institution
thereof.

1.

2.

The
provisions of Articles 15 (Dependent Personal Services) , and 16 (Directors Fees), shall
apply to remuneration and pensions in respect of services rendered in connection with a
business carried on by a Contracting State or an administrative-territorial subdivision
or a local authority thereof.

3.

1.

An individual
who is or was immediately before visiting a Contracting State a resident of the other
Contracting State and who, at the invitation of the Government of the first-mentioned
Contracting State or of a University, college, school, museum or other cultural
institution in that first-mentioned Contracting State or under an official programme of
cultural exchange, is present in that Contracting State for a period not exceeding two
consecutive years solely for the purpose of teaching, giving lectures or carrying out
research at such institution shall be exempt from tax in that Contracting State on his
remuneration for such activity.

2.

This Article
shall not apply to income from research if such research is undertaken not in the public
interest but primarily for the private benefit of a specific person or
persons.

1.

Payments
which a student 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 Contracting 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 Contracting State, provided that such payments arise from sources outside that
Contracting State.

2.

In respect of
grants, scholarships and remuneration from employment not covered by paragraph 1, a
student or business trainee described in paragraph I shall, in addition, be entitled
during such education or training to the same exemption, reliefs or reductions in
respect of taxes available to residents of the Contracting State which he is
visiting.

1.

Items of
income of a resident of a Contracting State, wherever arising, not dealt with foregoing
Articles of this Agreement shall be taxable only in that
State.

2.

The
provisions of paragraph 1 shall not apply to income, other than income from immovable
property as defined in paragraph 2 of Article 6 (Income from Immovable Property), if the
recipient of such income, being a 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 services 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 (Business Profits) or Article 14 (Independent Personal Services), as the
case may be, shall apply.

3.

Notwithstanding the provisions of paragraphs 1 and 2, items of
income of a resident of a Contracting State not dealt with in the foregoing Articles of
this Agreement and arising in the other Contracting State may also be taxed in that
other State.

1.

Capital
represented by immovable property referred to in Article 6 (Income from Immovable
Property), 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 of a permanent
establishment which an enterprise of a Contracting State has in the other Contracting
State or by 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, may be taxed in that other
State.

3.

Capital
represented by ships or aircraft operated in international traffic, and by movable
property pertaining to the operation of such ships, boats or aircraft, road or railway
vehicles, owned by a resident of a Contracting State, shall be taxable only in that
State.

4.

Capital
represented by shares or other corporate rights in a company the assets of which consist
mainly of immovable property situated in a Contracting State may be taxed in that
State.

5.

All other
elements of capital of a resident of a Contracting State shall be taxable only in that
State.

1.

Where a
resident of a Contracting States derives income or owns capital which, in accordance
with the provisions of this Agreement, may be taxed in the other Contracting States, the
first-mentioned State shall allow:

Such
deduction in either case shall not, however, exceed that part of the income tax or
capital tax, as computed before the deduction is given, which is attributable, as the
case may be, to the income or the capital which may be taxed in that other
State.

2.

For the
purposes of paragraph 1 of this Article, the term “tax paid in that other State” shall
be deemed to include the amount of tax which would have been paid in that other State if
it had not been exempted or reduced in accordance with the legislation of that other
State.

1.

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 (Personal Scope), also apply to persons who are not residents of
one or both of the Contracting States.

2.

Stateless
persons who are residents of a Contracting State shall not be subjected in either
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 the State concerned in the same circumstances are or may be
subjected.

3.

The taxation
on a permanent establishment which an enterprise of a Contracting State has in the other
Contracting State shall not be less favorably 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.

4.

Except where
the provisions of paragraph 1 of Article 9 (Associated Enterprises), paragraph 6 of
Article 11 (Interest), or paragraph 6 of Article 12 (Royalties) apply, interest,
royalties 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 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.

5.

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.

6.

The
provisions of this Article shall apply only to taxes which are covered by this
agreement.

1.

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 of Article 25 (Non-discrimination), to
that of the Contracting State of which he is a national. The case must be presented
within three years from the first notification of the action resulting in taxation not
in accordance with the provisions of the Agreement.

2.

The competent
authority shall endeavor, 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.

3.

The competent
authority of the Contracting States shall endeavor 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.

4.

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.

1.

The competent
authorities of the Contracting States 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 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 injudicial
decisions.

2.

In no case
shall the provisions of paragraph 1 be construed so as to impose on a Contracting State
the obligation:

1.

Each of the
Contracting States shall endeavor to collect on behalf of the other Contracting State
such taxes imposed by that other Contracting State as will ensure that any exemption or
reduced rate of tax granted under this Agreement by that other Contracting State shall
not be enjoyed by persons not entitled to such benefits. The competent authorities of
the Contracting States may consult together for the purpose of giving effect to this
Article.

2.

In no case
shall this Article be construed so as to impose upon a Contracting State the obligation
to carry out administrative measure at variance with the regulations and practices of
either Contracting State or which would be contrary to the first-mentioned Contracting
State’s sovereignty, security, or public policy.

1.

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.

2.

This
Agreement shall have effect:

(a)

in respect of
tax withheld at source to income derived on or after I January in the year next
following that in which the notice of termination is
given;

(b)

in respect of
other taxes on income and on capital, for taxable years beginning on or after 1 January
in the year next following that in which the notice of termination is
given.

For the
Government of The Republic of Indonesia

Signed

N.
HASSAN WIRAJUDA

Minister for Foreign Affairs

For the
Government of The Republic of Armenia

Signed

VARTAN
OSKANIAN

Minister for Foreign Affairs

1.

Ad
Article 5,paragraph 5 (c): “It is understood that manufacturing or processing goods means
any activities that change their nature or character”.“

2.

Ad
Article 7: “Notwithstanding the provision of paragraph 3 of Article 25 of the 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 profit
after deducting there from income tax and other taxes on income imposed thereon in that
other State”.

3.

Ad
Article 10: “The provision of the preceding paragraph of this Article shall not affect the
provision contained in any production sharing contracts and contracts of work (or any
other similar contracts) relating to oil and gas sector or other mining sector concluded
by the Government of Indonesia, its instrumentality, its relevant state oil and gas
company or any other entity thereof with a person who is a resident of the other
Contracting State”.

4.

Ad
Article 9, paragraph 3: “A Contracting State shall not change the profits of an enterprise
in the circumstances referred to in paragraph 2 after the expiry of the time limits
provided in its tax laws”.

5.

Ad
Article 16: “The remuneration which a person to whom this Article 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”.

For the
Government of The Republic of Indonesia

Signed

N.
HASSAN WIRAJUDA

Minister for Foreign Affairs

For the
Government of The Republic of Armenia

Signed

VARTAN
OSKANIAN

Minister for Foreign Affairs