Germany

This Agreement shall apply to
taxes on income and on capital imposed on behalf of a Contracting State, of a Land or a political
subdivision or local authority thereof, 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, on total capital, or on elements
of income or of capital, including taxes on gains from the alienation of movable or immovable
property, the payroll tax, and taxes on capital appreciation.

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

in Indonesia
the income tax imposed under the Undang-undang Pajak Penghasilan 1984 (Law No. 7 of 1983) and to
the extent provided in such income tax law, the company tax imposed under the Ordonansi Pajak
Perseroan 1925 (State Gazette No. 319 of 1925 as lastly amended by Law No. 8 of 1970) and the tax
imposed under the Undang-undang Pajak atas Bunga, Dividen dan Royalty 1970 (Law No. 10 of 1970)

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.

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

the term “Federal Republic of
Germany”, if used in a geographical sense, means the area in which the tax law of the Federal
Republic of Germany is in force, as well as the areas of the sea, the sea-bed and its subsoil
adjacent to the territorial sea of the Federal Republic of Germany, over which the Federal
Republic of Germany exercises sovereign rights and jurisdiction in accordance with international
law and with its national legislation;

the term “Indonesia” comprises
the territory of the Republic of Indonesia as defined in its law and such parts of the continental
shelf and the adjacent seas, over which the Republic of Indonesia has sovereignty, sovereign
rights or other rights in accordance with international law;

the terms “a Contracting
State” and “the other Contracting State” mean Indonesia or the Federal Republic of Germany as the
context requires;

the term “person” means an
individual and a company;

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

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;

the term “national” means:

in respect of the Federal
Republic of Germany any German within the meaning of Article 116, paragraph (1), of the Basic Law
for the Federal Republic of Germany and any legal person, partnership and association deriving its
status as such from the law in force in the Federal Republic of Germany;

in respect of the Republic of
Indonesia any national of Indonesia and any legal person, partnership and association deriving its
status as such from the law in force in the Republic of Indonesia;

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;

the term “competent authority”
means in the case of the Federal Republic of Germany the Federal Ministry of Finance, and in the
case of the Republic of Indonesia the Minister of Finance or his authorized representative.

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.

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
criterion of a similar nature. But this term does not include any person who is liable to tax in
that State in respect only of income from sources in that State or capital situated therein.

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:

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);

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;

if he has an habitual abode in
both States or in 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 company is a resident of both Contracting States, then it shall be
deemed to be a resident of the State in which its place of effective management is situated.

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 place of management;

a branch;

an office;

a factory;

a workshop, and

a mine, an oil or gas well, a
quarry or any other place of extraction of natural resources.

A building site or
construction or installation project constitutes a permanent establishment only if it lasts more
than six months.

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

the use of facilities solely
for the purpose of storage or display of goods or merchandise belonging to the enterprise;

the maintenance of a stock of
goods or merchandise belonging to the enterprise solely for the purpose of storage or display;

the maintenance of a stock of
goods or merchandise belonging to the enterprise solely for the purpose of processing by another
enterprise;

the maintenance of a fixed
place of business solely for the purpose of purchasing goods or merchandise, or of collecting
information, for the enterprise;

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;

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 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 Contracting State in respect of any activities which that person undertakes for
the enterprise, if such a person:

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

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.

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 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.

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.

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 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 provisions of paragraph 1
shall apply to income derived from the direct use, letting, or use in any other from of immovable
property.

The provisions of paragraph 1
and 3 shall also apply to the income from immovable property of a enterprise and to income from
immovable property used for the performance of independent personal services.

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 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 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.

In the absence of appropriate
accounting or other data permitting the determination of the profits to be attributed to a
permanent establishment, the tax may be assessed in the Contracting State in which the permanent
establishment is situated in accordance with the laws of that State, in particular regard being
had to the normal profits of similar enterprises engaged in the same or similar conditions,
provided that, on the basis of the available information, the determination of the profits of the
permanent establishment is consistent with the principles stated in this Article.

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.

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.

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.

Profits from the operation of
ships or aircraft in international traffic derived by a resident of a Contracting State shall be
taxable only in that State.

The provisions of paragraph 1
shall also apply to profits from the participation in a pool, a joint business or an international
operating agency.

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

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,

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 the Contracting State of which the company paying the dividends is a resident and
according to the laws of that State, but the tax so charged shall not exceed:

10% of the gross amount of the
dividends if the recipient is a company (excluding partnerships) which owns directly at least 25%
of the capital of the company paying the dividends;

in all other cases, 15% of the
gross amount of the dividends if the recipient is the beneficial owner of the dividends.

The term “dividends” as used
in this Article means:

dividends on shares including
income from shares, “jouissance” shares or “jouissance” rights, mining shares, founders’ shares or
other rights, not being debt-claims, participating in profits; and

other income 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, and, for the purpose of taxation in the Federal
Republic of Germany, income derived by a sleeping partner (“stiller Gesellschafter”) from his
participation as such and distributions on certificates of an investment fund or investment trust.

The provisions of paragraph 1
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 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 dividends paid or the undistributed profits consist
wholly or partly of profits or income arising in such 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% of the amount of such profits after deducting
therefrom income tax and other taxes on income imposed thereon in that other State.

Interest arising in a
Contracting State and paid to a resident of the other Contracting State may be taxed in the
Contracting State in which it arises and according to the laws of that State, but the tax so
charged shall not exceed 10% of the gross amount of the interest if the recipient is the
beneficial owner of the interest.

Notwithstanding the provisions
of paragraph 1:

interest arising in the
Federal Republic of Germany and paid to the Government or the Central Bank of Indonesia shall be
exempt from German tax;

interest arising in the
Republic of Indonesia and paid in consideration of a loan guaranteed by Hermes-Deckung or paid to
the Government of the Federal Republic of Germany, the Deutsche Bundesbank, the Kreditanstalt für
Wiederaufbau or the Deutsche Finanzierungsgesellschaft für Beteiligungen in Entwicklungsländern
shall be exempt from Indonesian tax.

The competent authorities of
the Contracting States may agree from time to time to grant exemption as provided for in paragraph
2 to other financial institutions, the capital of which is wholly owned by the Government of the
other Contracting State.

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 income assimilated to income from
money lent by the taxation laws 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
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.

Interest shall be deemed to
arise in a Contracting State when the payer is that State itself, a Land, a political 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.

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.

Royalties and fees for
technical services arising in a Contracting State and paid to a resident of the other Contracting
State may 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 or of the fees for technical
services the tax so charged shall not exceed:

in the case of royalties as
defined in paragraph 2 sub- paragraph (a) 15% of the gross amount of such royalties;

in the case of royalties as
defined in paragraph 2 sub- paragraph (b) 10% of the gross amount of such royalties; and

in the case of fees for
technical services 7.5% of the gross amount of such fees.

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 cinematographic films
and films or tapes 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.

The term “fees for technical
services” as used in this Article means payments of any kind to any person, other than payments to
an employee of the person making the payments, in consideration for any services of a managerial,
technical or consultancy nature rendered in the Contracting State of which the payer is a
resident.

The provisions of paragraph 1
of this Article shall not apply if the beneficial owner of the royalties or fees for technical
services, being a resident of a Contracting State, carries on business in the other Contracting
State in which the royalties or fees for technical services 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, property or contract in respect of which the
royalties or fees for technical services 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.

Royalties and fees for
technical services shall be deemed to arise in a Contracting State when the payer is that State
itself, a Land, a political subdivision, a local authority or a resident of that State. Where,
however, the person paying the royalties or fees for technical services, whether he is a resident
of a Contracting State or not, has in a Contracting State a permanent establishment or fixed base
in connection with which the obligation to make the payments was incurred, and the payments are
borne by that permanent establishment or fixed base, then the royalties or fees for technical
services shall be deemed to arise in the Contracting 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 or fees for technical services paid exceeds, for whatever
reason, 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.

Gains derived by a resident of
a Contracting State from the alienation of immovable property 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 fixed
base, may be taxed in that other State.

Gains derived by a resident of
a Contracting State from the alienation of aircraft operated in international traffic or 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 paragraphs 1 to 3 shall be taxable only in the
Contracting State of which the alienator is a resident.

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 in the fiscal year
concerned. 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, lawyers, engineers, architects,
dentists and accountants.

Subject to the provisions of
Articles 16, 18 and 19, 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
State, if:

the recipient is present in
the other State for a period or periods not exceeding in the aggregate 183 days in the fiscal year
concerned, and

the remuneration is paid by,
or on behalf of, an employer who is not a resident of the other State, and

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.

Notwithstanding the provisions
of Articles 7, 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 by an artiste or athlete from his personal activities as
such shall be exempt from tax in the Contracting State in which these activities are exercised if
the activities are exercised within the framework of a visit which is substantially supported by
the other State, a Land, a political subdivision, a local authority or public institution thereof.

Remuneration, including
pensions paid by a Contracting State, a Land, a political subdivision or a local authority thereof
to an individual in respect of services rendered to that State, Land, subdivision or authority
shall be taxable only in that State. However, such remuneration shall be taxable only in the other
Contracting State if services are rendered in that State, if the individual is a resident of that
State and not a national of the first-mentioned State.

The provisions of Articles 15,
16, 17 and 18 shall apply to remuneration and pensions in respect of services rendered in
connection with a business carried on by a Contracting State, a Land, a political subdivision or a
local authority thereof.

The provisions of paragraph 1
shall likewise apply in respect of remuneration paid, under a development assistance programme of
a Contracting State, a Land, a political subdivision or a local authority thereof, out of funds
exclusively supplied by that State, Land, political subdivision or local authority, to a
specialist or volunteer seconded to the other Contracting State with the consent of that other
State.

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 programme 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 are made to him from sources outside that State.

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

Notwithstanding the provisions
of paragraph 1, if a resident of a Contracting State derives income from sources within the other
Contracting State in the form of lottery prizes, awards and income from the lease of movable
property, such income may be taxed in the other Contracting State.

Capital represented by
immovable property, owned by a resident of a Contracting State and situated in the other
Contracting State, may be taxed in that other State.

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.

Ships and aircraft operated in
international traffic by a resident of a Contracting State and movable property pertaining to the
operation of such ships or aircraft, shall be taxable only in that State.

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

Tax shall be determined in the
case of a resident of the Federal Republic of Germany as follows:

Unless foreign tax credit is
to be allowed under sub-paragraph (b), there shall be exempted from German tax any item of income
arising in the Republic of Indonesia and any item of capital situated within Indonesia, which,
according to this Agreement, may be taxed in the Republic of Indonesia. The Federal Republic of
Germany, however, will take into account in the determination of its rate of tax the items of
income and capital so exempted. 

Subject to the provisions of
German tax law regarding credit for foreign tax, there shall be allowed as a credit against German
income, corporation and capital tax payable in respect of the following items of income arising in
the Republic of Indonesia and the items of capital situated there the Indonesian tax paid under
the laws of Indonesia and in accordance with this Agreement on: 

dividends not dealt with in
sub-paragraph (a);

interest;

royalties and fees for
technical services;

directors’ fees;

income in the meaning of
Article 21 paragraph 2.

For the purpose of credit
referred to in letter (bb) of sub- paragraph (b) the Indonesian tax shall be deemed to be 10% of
the gross amount of the interest, if the Indonesian tax is reduced to a lower rate according to
domestic law, irrespective of the amount of tax actually paid.

The provisions of
sub-paragraph (a) shall not apply to the profits of, and to the capital represented by movable and
immovable property forming part of the business property of a permanent establishment and to the
gains from the alienation of such property; to dividends paid by, and to the shareholding in, a
company; provided that the resident of the Federal Republic of Germany concerned does not prove
that the receipts of the permanent establishment or company are derived exclusively or almost
exclusively:

from producing or selling
goods or merchandise, giving technical advice or rendering engineering services, or doing banking
or insurance business, within Indonesia orf

from dividends paid by one or
more companies, being residents of Indonesia, more than 25% of the capital of which is owned by
the first-mentioned company, which themselves derive their receipts exclusively or almost
exclusively from producing or selling goods or merchandise, giving technical advice or rendering
engineering services, or doing banking or insurance business, within Indonesia.

Tax shall be determined in the
case of resident of the Republic of Indonesia as follows :

the Republic of Indonesia,
when imposing tax on residents of the Republic of Indonesia, may include in the basis upon which
such tax is imposed the items of income which may be taxed in the Federal Republic of Germany in
accordance with the provisions of this Agreement;

where a resident of Indonesia
derives income from the Federal Republic of Germany and such income may be taxed in the Federal
Republic of Germany in accordance with the provisions of this Agreement, the amount of the German
tax payable in respect of the income shall be allowed as a credit against the Indonesian tax
imposed on that resident. The amount of credit, however, shall not exceed that part of the
Indonesian tax which is appropriate to the income.

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, provided they are nationals 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 which it grants to its own residents.

Except where the provisions of
Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties,
fees for technical services 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.

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.

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

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 laws 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 24,
to that of the Contracting State of which he is a national. The case must be presented within two
years from the issuance of the assessment not in accordance with the provisions of this 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 the Agreement. Any agreement reached shall be implemented notwithstanding any time
limits in the domestic law of the Contracting States, concerning their internal statute of
limitation.

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 provisions of this
Agreement regarding the reduction or exemption from taxes on income in the Contracting States
where it arises shall be applied in accordance with the laws of that State and the procedures to
be agreed by the competent authorities of both Contracting States.

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 of
the Contracting States shall exchange such information as is necessary for carrying out the
provisions of this Agreement. 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 and shall
be disclosed only to persons or authorities (including courts and administrative bodies with
regard to their proceedings or judicial decisions) involved in the assessment or collection of,
the enforcement or prosecution in respect of, or the determination of appeals in relation to, the
taxes covered by the Agreement. Such persons or authorities shall use the information only for
such purposes.

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

to carry out administrative
measures at variance with the laws and administrative practice of that or of the other Contracting
State;

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;

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 (ordre
public).

This Agreements shall be
ratified and the instruments of ratification shall be exchanged at Jakarta as soon as possible.

This Agreement shall enter
into force one month after the date of exchange of the instruments of ratification and shall have
effect :

in the case of taxes withheld
at source on dividends, interest, royalties, and fees for technical services in respect of amounts
paid on or after the first day of January of the calendar year next following that in which the
Agreement enters into force;

in the case of other taxes, in
respect of taxes levied for periods beginning on or after the first day of January of the calendar
year next following that in which the Agreement enters into force.

Upon the entry into force of
this Agreement the Agreement between the Federal Republic of Germany and the Republic of Indonesia
for the avoidance of double taxation with respect to taxes on income and capital of September 2,
1977, shall expire and shall cease to have effect as from the dates on which the provisions of
this Agreements commence to have effect.

in the case of taxes withheld
at source on dividends, interest, royalties, and fees for technical services in respect of amounts
paid on or after the first day of January of the calendar year next following that in which the
notice of termination is given;

in the case of other taxes, in
respect of taxes levied for periods beginning on or after the first day of January of the calendar
year next following that in which the notice of termination is given.

For the
Republic of Indonesia

For the
Federal Republic of Germany

For the
Republic of Indonesia

For the
Federal Republic of Germany