Brunei Darussalam

AGREEMENT BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE GOVERNMENT OF THE REPUBLIC OF BRUNEI DARUSSALAM

FOR
THE AVOIDANCE OF DOUBLE
TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

Article 1
PERSONAL SCOPE

This Agreement shall apply to persons
who are residents and Government of one or both of the Contracting States.

Article 2
TAXES COVERED

1. This Agreement shall apply to
   taxes on income and capital gains imposed on behalf of each Contracting State, irrespective of the
   manner in which they are levied.

2. There shall be regarded as taxes
   on income and capital gains all taxes imposed on total income and total capital gains, or on elements
   of income and capital gains, including taxes on gains from the alienation of movable or immovable
   property. 

3. The existing taxes to which the
   Agreement shall apply are: 

   (a)	in the case of Brunei Darussalam;
   	(i)	income tax imposed under Income Tax Act (Cap. 35);
   	(ii)	petroleum profits tax imposed under Income Tax (Petroleum) Act, (Cap. 119);
   	(hereinafter collectively referred to as “Brunei tax”);
   (b)	in the case of Indonesia; the income tax imposed under the Undang-Undang Pajak Penghasilan 1984 (Law no. 7 of 1983 as amended) (hereinafter referred to as “Indonesian tax”).

4. This Agreement shall apply also to
   any identical or substantially similar taxes which are subsequently imposed in addition to, or in
   place of, the existing taxes referred to in paragraph 3 above. The competent authorities of the
   Contracting States shall notify each other of any significant changes which have been made in their
   respective taxation laws within a reasonable period of time after such changes and furnish copies of
   relevant enactments and regulations. 

5. If by reason of changes made in
   the taxation law of either Contracting State, it appears desirable to amend any Article of this
   Agreement without affecting the general principles thereof, the necessary amendments may be made by
   mutual consent by means of an exchange of diplomatic notes or in any other manner in accordance with
   their constitutional procedures. 

Article 3
GENERAL DEFINITIONS

1. In this Agreement, unless the
   context otherwise requires:

   (a)	the term “Brunei” means: the territory of Brunei Darussalam as defined in its laws and the adjacent areas over which Brunei Darussalam has sovereignty, sovereign rights or jurisdiction in accordance with the provisions of the United Nations Convention on the Law of the Sea, 1932;
   (b)	the term “Indonesia” means : 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;
   (c)	the term “Government” means:
   	(i)	in the case of Brunei Darussalam;
   		(1)	The Brunei Currency Board,
   		(2)	The Brunei Investment Agency,
   		(3)	Any local or statutory authority or body exempt from tax in Brunei Darussalam,
   		(4)	Any body corporate controlled or wholly owned by the Government of Brunei Darussalam,
   		(5)	Such institutions as may be agreed from time to time between the two Contracting States;
   	(ii)	in the case of Indonesia;
   		(1)	Local authorities.
   		(2)	A political subdivision.
   		(3)	The Central Bank or any financial institution controlled by the Government the capital of which is wholly owned by the Government;
   (d)	the terms “a Contracting State” and “the other Contracting State” mean Brunei or Indonesia as the context requires;
   (e)	the term “tax” means Brunei tax or Indonesian tax as the context requires;
   (f)	the term “person” includes an individual, a company, a body of persons and any other entity which is treated as a taxable entity under the tax laws of the respective Contracting States;
   (g)	the term “company” means any body corporate or any other entity which is treated as a company under the tax laws of the respective Contracting States;
   (h)	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;
   (i)	the term “national” means:
   	(i)	(a)	in the case of Brunei Darussalam: any natural person who is afforded the status of a national under the applicable laws in Brunei and may also include any person in possession of a national passport issued by the competent authorities;
   		(b)	in the case of Indonesia: any natural person who is afforded the status of a national under the applicable laws in Indonesia;
   	(ii)	any legal person, partnership and association deriving its status as such from the laws in force in a Contracting State;
   (j)	the term “international traffic” means carriage of passengers, mail, livestock or goods by a ship or aircraft which is operated by an enterprise of one of the Contracting States, except when the ship or aircraft is operated solely between places in the other Contracting State or solely between such places and one or more structures used for the exploration or exploitation of natural resources situated in waters adjacent to the territorial waters of that other Contracting State;
   (k)	the term “competent authority” means:
   	(i)	in Brunei: the Minister of Finance or his authorised representative;
   	(ii)	in Indonesia: the Minister of Finance or his authorised representative.

2. As regards the application of this
   Agreement by a Contracting State, any term not otherwise defined shall, unless the context otherwise
   requires, have the meaning which it has under the laws of that Contracting State relating to the taxes
   which are the subject of this Agreement. 

Article 4
RESIDENT

1. For the purpose of this Agreement,
   the term “resident of a Contracting State” means any person who, under the laws of that Contracting
   State, is liable to tax therein by reason of his domicile, residence, 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 in accordance with the following:

   (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 permanent home available to him in both Contracting States he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closest (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 Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode;
   (c)	if he has an habitual abode in both Contracting States or in 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 in which the control and management of its business is
   exercised. If its place of control and management cannot be determined, the competent authorities of
   the Contracting States shall settle the question by mutual agreement. 

Article 5
PERMANENT ESTABLISHMENT

1. For the purposes of this
   Agreement, the term “permanent establishment” means a fixed place of business through which the
   business of the enterprise is wholly or partly carried on. 

2. The term “permanent establishment”
   shall include especially:

   (a)	a place of management;
   (b)	a branch;
   (c)	an office;
   (d)	a store, warehouse or premises used as a sales outlet;
   (e)	a factory;
   (f)	a workshop;
   (g)	a farm or plantation;
   (h)	a mine, an oil or gas well, a quarry or other place of extraction or exploration of natural resources, drilling rig or working ship used for the exploration or exploitation of natural resources including timber or other forest produce;
   (i)	a building site or construction or supervisory activities in connection therewith, provided such site, project or activity continues for a period of more than 183 days;
   (j)	assembly project or installation project which exist for more than three months; and
   (k)	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.

3. Notwithstanding the preceding
   provisions of this Article, the term ” permanent establishment” shall be not be deemed to include:

   (a)	the use of facilities solely for the purposes 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;
   (c)	the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purposes of processing by another enterprise;
   (d)	the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information for the enterprise;
   (e)	the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise.

4. Notwithstanding the provisions of
   paragraphs 1 and 2, where a person — other than an agent of an independent status to whom paragraph 5
   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 Contracting 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 Contracting 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 Contracting State for the enterprise goods or merchandise belonging to the enterprise.

5. 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. 

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 Contracting 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. 

7. 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 Contracting State (whether through
   a permanent establishment or otherwise), shall not of itself make either company a permanent
   establishment of the other. 

Article 6
INCOME FROM IMMOVABLE PROPERTY

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 Contracting State.

2. The term “immovable property”
   shall be defined in accordance with 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, forestry and fishery, rights to which the provisions of general law
   respecting landed property apply, usufruct of immovable property and rights to variable or fixed
   payments in cash or kind 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. 

3. The provisions of paragraph 1
   shall 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.

Article 7
BUSINESS PROFITS

1. The profits of an enterprise of a
   Contracting State shall be taxable only in that Contracting 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
   Contracting State but only so much of them as is attributable to (a) that permanent establishment; (b)
   sales in that other Contracting 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
   Contracting State of the same or similar kind as those effected through that permanent
   establishment. 

2. 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 Contracting State in which the permanent establishment is situated or
   elsewhere, but this does not include any expenses which under the law of that Contracting State would
   not be allowed to be deducted by an enterprise of that Contracting State. 

4. In so far 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; the method of apportionment adopted shall, however, be such that
   the result shall be in accordance with the principles laid down in this Article. 

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. 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. 

7. 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. 

Article 8
SHIPPING AND AIR TRANSPORT

1. Notwithstanding the provisions of
   Article 7, profits from the operation of aircraft in international traffic carried on by an enterprise
   of a Contracting State shall be taxable only in that Contracting State. 

2. 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 taxed in the first-mentioned State, but the tax imposed shall be
   reduced by an amount equal to 50 per cent thereof. 

3. The provisions of paragraphs 1 and
   2 of this Article shall likewise apply to profits derived from the participation in pools, in a joint
   business or in an international operating agency of any kind by enterprises engaged in the operation
   of ships or aircraft in international traffic. 

4. For the purposes of this Article,
   profits derived from the other Contracting State mean profits from the carriage of passengers, mail,
   livestock or goods shipped, or loaded into a ship or an aircraft in that Contracting State (excluding
   the profits accruing from passengers, mail, livestock or goods which are brought to that other
   Contacting State solely for transshipment, or for transfer from one aircraft to another or from one
   aircraft to a ship or from a ship to an aircraft). 

Article 9
ASSOCIATED ENTERPRISES

1. Where:

   (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 of 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, 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.

2. Where a Contracting State includes
   in the profits of an enterprise of that Contracting State — and taxes accordingly — profits on which
   an enterprise of the other Contracting State has been charged to tax in that other Contracting State
   and the profits so included are profits which would have accrued to the enterprise of the
   first-mentioned Contracting State if the conditions made between the two enterprises had been those
   which would have been made between independent enterprises, then that other Contracting 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 this Agreement and the
   competent authorities of the Contracting States shall if necessary consult each other. 

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. 

Article 10
DIVIDENDS

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 Contracting 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 Contracting 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. 
   This paragraph shall not affect the taxation of the company in respect of the profits out of which the
   dividends are paid.

3. Notwithstanding the provisions of
   paragraph 2, dividends arising in a Contracting State and paid to the Government of the other
   Contracting State shall be exempt from tax in the first-mentioned Contracting State.

4. 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 the other corporate rights which is subjected to the same taxation treatment as income from
   shares by the laws of the Contracting State of which the company making the distribution is a
   resident. 

5. 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 Contracting
   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 or Article 14, as the case may be, shall apply. 

6. Where a company which is a
   resident of a Contracting State derives profits or income from the other Contracting State, that other
   Contracting State may not impose any tax on the dividends paid by the company except in so far as such
   dividends are paid to a resident of that other Contracting State or in so far 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 Contracting 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 Contracting State. 

7. Notwithstanding any other
   provision 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 Contracting 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 Contracting State. 

8. The rate of tax in paragraph 2 and
   in paragraph 7 of this Article shall not affect the rate of the tax applied in any production sharing
   contracts or any other similar contracts relating to oil and gas sector or other mining sector
   concluded by the Government of a Contracting State, 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. 

Article 11
INTEREST

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 Contracting 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. 

3. Notwithstanding the provisions of
   paragraph 2, interest arising in a Contracting State and paid to the Government of the other
   Contracting State shall be exempt from tax in the first-mentioned Contracting State. 

4. The terms “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 aright 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 income assimilated to income from money lent by the
   taxation laws of the Contracting State in which the income arises including interest on deferred
   payment sales. Penalty charges for late payment shall not be regarded as interest for the purpose of
   this Article. 

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 Contracting 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 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. 

6. Interest shall be deemed to arise
   in a Contracting State when the payer is that Contracting State itself, a political sub-division, a
   local authority or a resident of that Contracting 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 Contracting 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 this Agreement. 

Article 12
ROYALTIES

1. Royalties 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 royalties may also
   be taxed in the Contracting State in which they arise, and according to the laws of that Contracting
   State, but, if the recipient is the beneficial owner of the royalties, the tax so charged shall not
   exceed 15 per cent of the gross amount of the royalties. 

3. Notwithstanding the provisions of
   paragraph 2, royalties arising in a Contracting State and paid to the Government of the other
   Contracting State shall be exempt from tax in the first-mentioned Contracting State. 

4. The terms “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 cinematographic films or tapes
   for television or 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 or scientific experience. 

5. Royalties shall be deemed to arise
   in a Contracting State when the payer is that Contracting State itself, a local authority or a
   resident of that Contracting State. Where, however, the person paying the royalties, whether he is a
   resident of a Contracting State or not, has in that Contracting State a permanent establishment in
   connection with which the liability to pay the royalties was incurred, and such royalties are borne by
   such permanent establishment, then such royalties shall be deemed to arise in that Contracting State
   in which the permanent establishment is situated. 

6. The provisions of paragraphs 1, 2
   and 5 of this Article shall likewise apply to proceeds arising from the alienation of any copyright of
   scientific work, any patent, trade mark, design or model, plan or secret formula or process. 

7. The provisions of paragraphs 1, 2
   and 5 of this Article shall not apply if the recipient of the royalties or the proceeds, being a
   resident of a Contracting State, has in the other Contracting State in which the royalties or the
   proceeds arise a permanent establishment with which the right or property giving rise to the royalties
   or the property, the alienation of which gives rise to the proceeds, is effectively connected. In such
   case, the provisions of Article 7 shall apply. 

8. Where, owing to a special
   relationship between the payer and the recipient or between both of them and some other person, the
   amount of the royalties paid, 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 recipient in the absence of
   such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In
   that 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 13
CAPITAL GAINS

1. 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 Contracting 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 Contracting 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
   Contracting State. 

4. Gains from the alienation of any
   property other than that referred to in paragraphs 1, 2 and 3, shall be taxable only in the
   Contracting State of which the alienator is a resident. 

5. Notwithstanding the provisions of
   paragraphs 1 and 2 of this Article and paragraph 1 of the Protocol, capital gains arising in a
   Contracting State to the Government of the other Contracting State shall be exempt from tax in the
   first-mentioned Contracting State. 

Article 14
INDEPENDENT PERSONAL SERVICES

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 Contracting 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 Contracting State for a period or periods exceeding in the aggregate 183 days within any
   twelve-month period. If he has such a fixed base or remains in that other Contracting State for the
   aforesaid period or periods, the income may be taxed in that other Contracting State but only so much
   of it as is attributable to that fixed base or is derived in that other Contracting State during the
   aforesaid period or periods. 

2. The term “professional services”
   includes independent scientific, literary, artistic, educational or teaching activities as well as the
   independent activities of physicians, lawyers, engineers, architects, dentists and accountants. 

Article 15
DEPENDENT PERSONAL SERVICES

1. Subject to the provisions of
   Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration or income for personal
   services derived by a resident of a Contracting State shall be taxable only in that Contracting State
   unless the services are performed in the other Contracting State. If the services are so performed,
   such remuneration or income as is derived therefrom may be taxed in that other Contracting
   State. 

2. Notwithstanding the provisions of
   paragraph 1, remuneration or income derived by a resident of a Contracting State for personal services
   performed in the other Contracting State shall be exempt from tax of that other Contracting State
   if: 

   (a)	the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days within any twelve-month period; and
   (b)	the remuneration or income is paid by, or on behalf of, a person who is a resident of the first-mentioned State; and
   (c)	the remuneration or income is not borne by a permanent establishment which that person has in the other Contracting State.

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 Contracting State. 

Article 16
DIRECTORS’ FEES

1. Directors’ fees and 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 Contracting State. 

2. 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. 

Article 17
ARTISTES AND ATHLETES

1. 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
   Contracting State. 

2. Where income in respect of
   personal activities exercised in a Contracting State 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 and 15, be taxed in that Contracting State. 

3. Notwithstanding the provisions of
   paragraphs 1 and 2, income derived from activities referred to in paragraph 1 shall be exempt from tax
   in the Contracting State in which the activities are exercised if the visits to that Contracting State
   are wholly or substantially supported by funds of one or both of the Contracting States, a local
   authority or public institution thereof. 

Article 18
PENSIONS

1. Subject to the provisions of
   paragraph 2 of Article 19, any pension or other similar remuneration paid to a resident of one of the
   Contracting States from a source in the other Contracting State in consideration of past employment or
   services in that other Contracting State and any annuity paid to such a resident from such a source
   may be taxed in that other Contracting State. 

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. 

Article 19
GOVERNMENT SERVICE

Article 20
INCOME OF GOVERNMENT

The Government of a Contracting State shall be exempt
from tax in respect of any income derived from sources within the other Contracting State.

Article 21
STUDENTS AND TRAINEES

1. An individual who is a resident of
   a Contracting State immediately before making a visit to the other Contracting State and is
   temporarily present in that other Contracting State solely: 

   (a)	as a student at a recognised university, college or school in that other Contracting State;
   (b)	as a recipient of grant, allowance or award for the primary purpose of study or research from a Governmental, religious, charitable, scientific, literary or educational organisation; or
   (c)	as a business or technical apprentice,
   shall be exempt from tax of that other Contracting State in respect of
   (i)	all remittances from abroad for the purposes of his maintenance, education, study research or training;
   (ii)	the grant, allowance or award; and
   (iii)	any remuneration for personal services rendered in that other Contracting State insofar [as] the amount does not exceed non-taxable income under the law of that State.

2. An individual who was a resident
   of a Contracting State immediately before visiting the other Contracting State and is temporarily
   present in that other Contracting State solely as a trainee for the purpose of acquiring technical,
   professional or business experience, shall, for a period not exceeding four years from the date of his
   first arrival, in that other Contracting State in connection with that visit be exempt from tax in
   that other Contracting State in respect of: 

   (a)	all remittances from abroad for the purposes of his maintenance or training; and
   (b)	any remuneration for personal services rendered in that other Contracting State insofar [as] the amount does not exceed non-taxable income under the law of that State.

3. The benefits of paragraphs 1 and 2
   of this Article shall not be concurrently cumulative.

Article 22
TEACHERS

An individual who is a resident of a Contracting State
immediately before making a visit to the other Contracting State, and who, at the invitation of any
university, college, school or other similar educational institution, which is recognised by the competent
authority in that other Contracting State, visits that other Contracting State for a period not exceeding
two years solely for the purpose of teaching or research or both at such educational institution shall be
exempt from tax in that other Contracting State on his remuneration for such teaching or research.

Article 23
OTHER INCOME

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
be taxed in that other Contracting State.

Article 24
ELIMINATION OF DOUBLE TAXATION

Double taxation shall be avoided as
follows:

1. In the case of Brunei:

   Subject to the provisions of the laws of Brunei
   regarding allowances as a credit against Brunei tax of tax payable in a territory outside Brunei
   (which shall not affect the general principle hereof), tax payable under the laws of Brunei and in
   accordance with this Agreement, whether directly or by deduction, on profits or income from sources
   within Indonesia shall be allowed as a credit against any Brunei tax computed by reference to the same
   profits or income on which the Indonesian tax is computed.

2. In the case of Indonesia:

   Where a resident of Indonesia derives income from
   Brunei, the amount of tax on that income payable in Brunei in accordance with the provisions of this
   Agreement may be credited against the tax levied in Indonesia imposed on that resident. The amount of
   credit, however, shall not exceed the amount of tax of Indonesia on that income computed in accordance
   with Indonesian taxation laws and regulations.

3. For the purposes of this Article,
   the term “tax payable” shall be deemed to include the amount of tax which would have been paid if the
   tax had not been exempted or reduced in accordance with the special incentive laws designed to promote
   economic development in either Contracting State, effective on the date of signature of this Agreement
   or which may be introduced hereafter in modification of, or in addition to, the existing laws. 

Article 25
NON-DISCRIMINATION

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 Contracting State in the same circumstances are or may be subjected. 

2. 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 Contracting State than the taxation levied on enterprises of
   that other Contracting 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. 

3. 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
   Contracting 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 that
   first-mentioned State are or may be subjected. 

4. 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 is if they had been paid to a resident of the first-mentioned Contracting
   State. 

5. In this Article the term
   “taxation” means taxes which are the subject of this Agreement.

Article 26
MUTUAL AGREEMENT PROCEDURE

1. Where a resident of a Contracting
   State considers that the actions of one or both of the Contracting States result or will result for
   him in taxation not in accordance with this Agreement, he may, notwithstanding the remedies provided
   by the national laws of those States, present the case to the competent authority of the Contracting
   State of which he is resident. 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
   endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an
   appropriate 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 not in accordance with this
   Agreement. 

3. The competent authorities of the
   Contracting States shall endeavour to resolve by mutual agreement any difficulty or doubt arising as
   to the interpretation or application of this Agreement. They may also consult together for the
   elimination of double taxation in cases not provided for in this Agreement. 

4. The competent authorities of the
   Contracting States may communicate with each other directly for the purpose of applying the provisions
   of this Agreement.

Article 27
EXCHANGE OF INFORMATION

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, in so far as the taxation thereunder is not contrary to the Agreement, in particular for
   the prevention of fraud or evasion of such taxes. Any information received by a Contracting State
   shall be treated as a secret in the same manner as information obtained under the domestic laws of the
   State and 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 including the disclosure of
   such information in public court proceedings or in judicial decisions. 

2. 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 or the 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 28
DIPLOMATIC AND CONSULAR OFFICIALS

Nothing in this Agreement shall affect
the fiscal privileges of diplomatic or consular officials under the general rules of international law or
under the provisions of special agreements.

Article 29
ENTRY INTO FORCE

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 Contracting States have been
   complied with.

2. This Agreement shall have affect:

   (a)	in the case of Brunei: in respect of Brunei tax for the year of assessment beginning on or after 1 January in the calendar year immediately following the year in which the Agreement enters into force and subsequent years of Assessment.
   (b)	in the case of Indonesia:
   	(i)	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
   	(ii)	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

This Agreement shall remain in force
until terminated by a Contracting State. Either Contracting State may terminate the Agreement, through
diplomatic channels, by giving written notice of termination on or before the thirtieth of June of any
calendar year following after the period of five years from the year in which the Agreement enters into
force. In such event, the Agreement shall cease to have effect:

IN WITNESS WHEREOF the undersigned,
being duly authorised thereto, have signed this Agreement.

DONE in duplicate at Bandar Seri
Begawan this 27th day of February 2000 in the English Language.