Luxembourg

AGREEMENT BETWEEN
THE REPUBLIC OF INDONESIA
AND
THE GRAND DUCHY OF LUXEMBOURG

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

Article 1
PERSONAL SCOPE

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

Article 2
TAXES COVERED

1. This Agreement shall apply to
   taxes on income and on capital imposed on behalf of a Contracting State or its 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 elements of income
   or of capital, 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 Indonesia : the income tax imposed under the Undang-undang Pajak Penghasilan 1984 (Law No. 7 of 1983); (hereinafter referred to as “Indonesian tax”);
   (b)	in the Grand Duchy of Luxembourg :
   	(i)	the income tax on individuals (l’impôt sur le revenu des personnes physiques);
   	(ii)	the corporation tax (l’impôt sur le revenu des collectivités);
   	(iii)	the tax on fees of directors of companies (l’impôt spécial sur les tantièmes);
   	(iv)	the capital tax (l’impôt sur la fortune);
   	(v)	the communal trade tax (l’impôt commercial communal)
   	(hereinafter referred to as “Luxembourg tax”).

4. The Agreement shall also apply to
   any identical or substantially similar taxes which are imposed after the date of signature of the
   Agreement in addition to, or in place of, those referred to in paragraph 3. The competent authorities
   of the Contracting States shall notify each other of any substantial changes which have been made in
   their respective taxation laws. 

Article 3
GENERAL DEFINITIONS

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

   (a)	the term “Indonesia” comprises the territory of the Republic of Indonesia as defined in its laws and the adjacent areas over which the Republic of Indonesia has sovereign rights or jurisdiction in accordance with international law;
   (b)	the term “Luxembourg” means the territory of the Grand Duchy of Luxembourg;
   (c)	the term “person” includes an individual, a company and any other body of persons;
   (d)	the term “company” means any body corporate or any entity which is treated as a body corporate for the tax purposes;
   (e)	the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean, respectively, an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
   (f)	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;
   (g)	the term “competent authority” means:
   	(i)	in Indonesia : the Minister of Finance or his authorized representative;
   	(ii)	in Luxembourg : the Minister of Finance or his authorized representative;
   (h)	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;
   (i)	the terms “a Contracting State” and “the other Contracting State” mean Indonesia and Luxembourg as the context requires.

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

Article 4
RESIDENT

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 management or any other
   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.

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, 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, the
   competent authorities of the 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 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 farm or plantation;
   (h)	a mine, an oil or gas well, a quarry or any other place of extraction or exploration of natural resources, drilling rig or ship used for exploration or exploitation of natural resources.

3. The term “permanent establishment”
   likewise encompasses a building site or a construction project, or supervisory activities in
   connection therewith, an assembly or installation project, but only where such site, project or
   activities continue in one of the Contracting States for a period of more than 5 months. 

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

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

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

   (a)	has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 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;
   (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.

6. 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. 

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 or its associated enterprises, 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 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 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. 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. 

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. 

Article 7
BUSINESS PROFITS

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 (a) that permanent establishment;

   (b) sales in that other State of goods or merchandise of the same or similar kind
   as those sold through that permanent establishment; or (c) other business activities carried on
   in that other State of the same or similar kind as those effected through that permanent
   establishment.

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 business 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 head office of
   the enterprise or any of its other offices, by way of royalties, fees or other similar payments in
   return for the use of patents or other rights, or by way of commission, for specific services
   performed or for management, or, except in the case of a banking enterprise, by way of interest on
   moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination
   of the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement
   of actual expenses), by the permanent establishment to the head office of the enterprise or any of its
   other offices, by way of royalties, fees or other similar payments in return for the use of patents or
   other rights, or by way of commission for specific services performed or for management, or, except in
   the case of a banking enterprise, by way of interest on moneys lent to the head office of the
   enterprise or any of its other offices. 

4. For the purpose of the preceding
   paragraphs, the profits to be attributed to the permanent establishment shall be determined by the
   same method year by year unless there is good and sufficient reason to the contrary. 

5. Where profits include items of
   income which are dealt with separately in other Articles of this Agreement, then the provisions of
   those Articles shall not be affected by the provisions of this Article.

Article 8
SHIPPING AND AIR TRANSPORT

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

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

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, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

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 profits so included
   are profits which would have accrued to the enterprise of the first-mentioned State if the conditions
   made between the two enterprises had been those which would have been made between independent
   enterprises, then that other State shall make an appropriate adjustment to the amount of the tax
   charged therein on those profits. In determining such adjustment, due regard shall be had to the other
   provisions of the Agreement and the competent authorities of the Contracting States shall, if
   necessary, consult each other.

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 national 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 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: 

   (a)	10% of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25% of the capital of the company paying the dividends;
   (b)	15% of the gross amount of the dividends in all other cases.
   The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of these limitations. The provisions of this paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

3. The term “dividends” as used in
   this Article means income from 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 or Article 14, as the case may be, 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 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. 

6. Where a company which is resident
   of Luxembourg has a permanent establishment in Indonesia, the profits of that permanent establishment
   may be subjected to an additional tax in Indonesia in accordance with its laws, but the additional tax
   so charged shall not exceed 10% of the amount of such profits after deducting therefrom the income tax
   imposed thereon in Indonesia. 

7. The provisions of paragraph 6 of
   this Article shall not affect the provisions 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 Luxembourg. 

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 State, but if the
   recipient is the beneficial owner of the interest the tax so charged shall not exceed 10% 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, shall be exempt from tax in the first-mentioned
   State. 

4. For the purposes of paragraph 3,
   the term “Government” includes:

   (a)	in the case of Indonesia :
   	(i)	the “Bank Indonesia” (the Central Bank of Indonesia);
   	(ii)	such other financial institution, the capital of which is wholly owned by the Government of the Republic of Indonesia, as may be agreed upon from time to time between the competent authorities of the Contracting States;
   (b)	in the case of Luxembourg :
   	(i)	the “Société Nationale de Crédit et d’Investissement”;
   	(ii)	such other financial institution, the capital of which is wholly owned by the Government of the Grand Duchy of Luxembourg, as may be agreed upon from time to time between the competent authorities of the Contracting States.

5. 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 law of the state in which the income arises, including interest on deferred payment sales.

6. The provisions of paragraphs 1 and 2 shall not
   apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on
   business in the other Contracting State in which the interest arises, through a permanent establishment
   situated therein, or performs in that other State independent personal services from a fixed base
   situated therein, and the debt-claim in respect of which the interest is paid is effectively connected
   with: 

   (a)	such permanent establishment or fixed base, or with
   (b)	business activities referred to under (c) of paragraph 1 of Article 7.

7. Interest shall be deemed to arise
   in a Contracting State when the payer is that State itself, a local authority, or a resident of that
   State. Where, however, the person paying the 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. 

8. 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 AND FEES FOR TECHNICAL SERVICES

1. 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 that other State. 

2. However, such royalties and fees
   for technical services 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 and fees for
   technical services the tax so charged shall not exceed: 

   (a)	in the case of royalties 12.5% of the gross amount of such royalties;
   (b)	in the case of fees for technical services 10% of the gross amount of such fees.
   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, whether periodical or not, and in whatever form or name or nomenclature
   to the extent to which they are made as a consideration for: 

   (a)	the use of, or the rights to use, any copyright, patent, design or model, plan, secret formula or process, trade mark or other like property or right; or
   (b)	the use of, or the right to use, any industrial, commercial or scientific equipment; or
   (c)	the supply of scientific, technical, industrial or commercial knowledge or information; or
   (d)	the use of, or the right to use :
   	(i)	motion picture films; or
   	(ii)	films or video for use in connection with television; or
   	(iii)	tapes for use in connection with radio broadcasting; or
   (e)	total or partial forbearance in respect of the use or supply of any property or right referred to in this paragraph

4. 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. 

5. The provisions of paragraphs 1 and
   2 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 (a) such permanent establishment or fixed base, or with (b) business
   activities referred to under (c) of paragraph 1 of Article 7. In such case, the provisions of Article
   7 or Article 14, as the case may be, shall apply. 

6. Royalties and fees for technical
   services shall be deemed to arise in a Contracting State when the payer is that State itself, a local
   authority, or a resident of that State. Where, however, the person paying the royalties 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 a fixed base in connection with which the liability to make the payments
   was incurred, and such payments are borne by such permanent establishment or fixed base, then such
   royalties or fees for technical services 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 royalties or fees for technical services, exceeds the amount which would have been
   agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions
   of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the
   payment shall remain taxable according to the laws of each Contracting State, due regard being had to
   the other provisions of this Agreement. 

Article 13
CAPITAL GAINS

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 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 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. 

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 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 91 days in any taxable year. 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, 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 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. 

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: 

   (a)	the recipient is present in that other State for a period or periods not exceeding in the aggregate 183 days within any taxable year; and
   (b)	the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
   (c)	the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

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. 

Article 16
DIRECTORS’ FEE

1. Directors’ fees and other similar
   payments derived by a resident of a Contracting State in his capacity as a member of the board of
   directors or any other similar organ of a company which is a resident of the other Contracting State
   may be taxed in that other State. 

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
   (Dependent personal services).

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
   State.

2. 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. 

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

Article 18
PENSIONS

Article 19
GOVERNMENT SERVICE

Article 20
TEACHERS, RESEARCHERS AND STUDENTS

1. 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.

2. 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. 

Article 21
OTHER INCOME

Article 23
CAPITAL

1. Capital represented by immovable
   property referred to in Article 6, owned by a resident of a Contracting State and situated in the
   other Contracting State, may be taxed in that other State. 

2. Capital represented by movable
   property forming part of the business property 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. All other elements of capital of a
   resident of a Contracting State shall be taxable only in that State.

Article 23
ELIMINATION OF DOUBLE TAXATION

1. In Luxembourg, double taxation
   shall be eliminated as follows :

   (a)	Where a resident of Luxembourg derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in Indonesia, Luxembourg shall, subject to the provisions of subparagraphs (b) and (c), exempt such income or capital from tax, but may, in order to calculate the amount of tax on the remaining income or capital of the resident, apply the same rates of tax as if the income or capital had not been exempted.
   (b)	Where a resident of Luxembourg derives income which, in accordance with the provisions of Articles 10, 11, 12 and 21 may be taxed in Indonesia, Luxembourg shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in Indonesia. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from Indonesia.
   (c)	Where a company which is a resident of Luxembourg derives dividends from Indonesian sources, Luxembourg shall exempt such dividends from tax, provided that the company which is a resident of Luxembourg holds directly at least 25% of the capital of the company paying the dividends since the beginning of the accounting year. The above-mentioned shares in the Indonesian company are, under the same conditions, exempt from the Luxembourg capital tax.

2. In Indonesia, double taxation
   shall be eliminated as follows :
   Where a resident of Indonesia derives income from Luxembourg in accordance with the provisions of this
   Agreement, the amount of Luxembourg tax payable in respect of the income shall be allowed as credit
   against the Indonesian tax imposed on that resident. The amount of credit, however, shall not exceed
   the part of the Indonesian tax which is appropriate to such income.

Article 24
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 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.

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 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.

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 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. 

4. 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 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. 

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

Article 25
MUTUAL AGREEMENT PROCEDURE

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 24, to that of the
   Contracting State of which he is a national. The case must be presented within 2 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 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 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. 

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. 

Article 26
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, insofar as the taxation thereunder is not contrary to the Agreement in particular for the
   prevention of fraud or evasion of such taxes. 
   The exchange of information is not restricted by Article 1. Any information received by a Contracting
   State shall be treated as secret in the same manner as information obtained under the domestic laws of
   that State. However, if the information is originally regarded as secret in the transmitting State it
   shall be disclosed only to persons or authorities (including courts and administrative bodies)
   involved in the assessment or collection of, the enforcement or prosecution in respect of, or the
   determination of appeals in relation to, the taxes which are the subject of the Agreement. Such
   persons or authorities shall use the information only for such purposes but may disclose the
   information in public court proceedings, or in judicial decisions.

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 and administrative practice of that or of the other Contracting State;
   (b)	to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;
   (c)	to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public).

Article 27
MISCELLANEOUS RULES

Article 28
DIPLOMATIC AGENTS AND CONSULAR OFFICERS

Article 29
EXCLUSION OF CERTAIN COMPANIES

Article 30
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 States have been complied
   with. 

2. This Agreement shall have effect :

   (a)	in respect of tax withheld at the source to income derived on or after 1 January in the year next following that in which the Agreement enters into force; and
   (b)	in respect of other taxes on income and capital, for taxable years beginning on or after 1 January in the year next following that in which the Agreement enters into force.

Article 31
TERMINATIOIN

In such case, the Agreement shall
cease to have effect: