Mexico

Indonesia has established tax treaties with Mexico to prevent double taxation and encourage cross-border investments. See detailed information on Indonesia-Mexico tax treaties below.

AGREEMENT BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE UNITED MEXICAN STATES

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 of one or both of the Contracting States.

Article 2
TAXES COVERED

This Agreement shall apply to taxes on income imposed on behalf of a Contracting State or of its
political subdivisions or local authorities, irrespective of the manner in which they are
levied.
There shall be regarded as taxes on income all taxes imposed on total income, or on elements of
income, including taxes on gains from the alienation of movable or immovable property.

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

(a)	in Mexico : the federal income tax (el impuesto sobre la renta) (hereinafter referred to as “Mexican tax”)
(b)	in Indonesia : the income tax (hereinafter referred to as “Indonesian tax”)

The Agreement shall apply also 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, the existing taxes. The
competent authorities of the Contracting States shall notify each other of any significant changes
which have been made in their respective taxation laws.

Article 3
GENERAL DEFINITIONS

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

(a)	the term “Mexico” means the United Mexican States; when used in a geographical sense it includes the territory of the United Mexican States, as well as the integrated parts of the Federation; the islands, including the reefs and cays in the adjacent waters; the islands of Guadalupe and Revillagigedo; the continental shelf and the seabed and sub-soil of the islands, cays and reefs; the waters of the territorial seas and the inland waters and beyond them the areas over which, in accordance with the international law, Mexico may exercise its sovereign rights of exploration and exploitation of the natural resources of the seabed, sub-soil and the suprajacent waters; and the air space of the national territory to the extent and conditions established by international law;
(b)	the term “Indonesia” means the territory of the Republic of Indonesia as defined in its laws;
(c)	the terms “a Contracting State” and “the other Contracting State” mean Mexico or Indonesia, as the context requires;
(d)	the term “person” includes an individual, a company and any other body of persons;
(e)	the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;
(f)	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;
(g)	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;
(h)	the term “national” means:
	(i)	any individual possessing the nationality of a Contracting State;
	(ii)	any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State;
(i)	the term “competent authority” means :
	(i)	in Mexico, the Ministry of Finance and Public Credit;
	(ii)	in Indonesia, the Ministry of Finance or his authorised representative.

As regards the application of the Agreement at any time by a Contracting State, any term not defined
therein shall, unless the context otherwise requires, have the meaning that it has at that time under
the law of that State for the purposes of the taxes to which the Convention applies; any meaning under
the applicable tax laws of that State shall prevail over a meaning given to the term under the laws of
that State.

Article 4
RESIDENT

For the purposes of this Agreement, the term “resident of a Contracting State” means any person who,
under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of
management or any other criterion of a similar nature. 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.

Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting
States, then his status shall be determined as follows:

(a)	he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests);
(b)	if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode;
(c)	if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national;
(d)	in any other case, the competent authorities of the Contracting States shall settle the question by mutual agreement.

Where by reason of the provisions of paragraph 1, a person other than an individual is a resident of
both Contracting States, such person shall not be treated as a resident of either Contracting States
for the purposes of this Agreement.
A person who in relation to an income, is an estate of a deceased individual, or a trust (other than a
trust the income of which is exempt from taxation under the law of a Contracting State relating to its
tax) shall not be treated as a resident of a Contracting State except to the extent that the income is
subject to tax in that State as the income of a resident of that State in the hands of a beneficiary,
or, if that income is exempt from tax in that State, it is so exempt solely because it is subject to
tax in the other State.

Article 5
PERMANENT ESTABLISHMENT

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

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; and
(h)	a mine, an oil or gas well, a quarry or any other place of extraction or exploration or exploitation of natural resources, drilling rig or working ship.

The term “permanent establishment” likewise encompasses:

(a)	a building site, a construction, assembly or installation project or supervisory activities in connection therewith, but only when such site, project or activities continue for a period of more than six months;
(b)	the furnishing of services, including consultancy services by an 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 91 calendar days within any twelve-month period.

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

(a)	the use of facilities solely for the purpose of storage or display 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, supplying information, scientific research or for preparation in relation to the placement of loans, 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 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.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 State in respect of any activities which that person undertakes
for the enterprise, if such person:

(a)	has or habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph; or
(b)	has not such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise; or
(c)	manufactures or processes in that State for the enterprise goods or merchandise belonging to the enterprise.

Notwithstanding the foregoing provisions of this Article, an insurance enterprise of a Contracting
State shall, except in regard to reinsurance, be deemed to have a permanent establishment in the other
Contracting State if it collects premiums in the territory of that other State or insures risks
situated therein through a person other than an agent of an independent status to whom paragraph 7
applies.
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 and that in their commercial or financial relations
with the enterprise, conditions are not made or imposed that differ from those generally agreed to by
independent agents. 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.

Article 6
INCOME FROM IMMOVABLE PROPERTY

Income derived by a resident of a Contracting State from immovable property (including income from
agriculture or forestry) situated in the other Contracting State may be taxed in that other
State.
The term “immovable property” shall have the meaning which it has under the law of the Contracting
State in which the property in question is situated. The term shall in any case include property
accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to
which the provisions of general law respecting landed property apply, usufruct of immovable property
and rights to variable or fixed payments as consideration for the working of, or the right to work,
mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded
as immovable property.
The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in
any other form of immovable property.
The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an
enterprise and to income from immovable property used for the performance of independent personal
services.

Article 7
BUSINESS PROFITS

The profits of an enterprise of a Contracting State shall be taxable only in that State unless the
enterprise carries or has carried on business in the other Contracting State through a permanent
establishment situated therein. If the enterprise carries or has carried 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; and
(b)	sales in that other State of goods or merchandise of the same or similar kind as those sold through that permanent establishment.

Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries or has
carried 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. However, no such deduction shall be allowed in respect of such 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, by way of commission, for specific services
performed or for management, or, except in the case of a banking enterprise, by way of interest on
moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination
of the profits of a permanent establishment, for amounts charged, (otherwise than towards
reimbursement of actual expenses), by the permanent establishment to the head office of the enterprise
or any of its other offices, by way of royalties, fees or other similar payments in return for the use
of patents or other rights, or by way of commission for specific services performed or for management,
or, except in the case of a banking enterprise, by way of interest on moneys lent to the head office
of the enterprise or any of its other offices.
Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a
permanent establishment on the basis of an apportionment of the total profits of the enterprise to its
various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the
profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted
shall, however, be such that the result shall be in accordance with the principles contained in this
Article.
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.

Article 8
SHIPPING AND AIR TRANSPORT

Profits of an enterprise of a Contracting State from the operation of ships or aircraft in
international traffic shall be taxable only in that State.
Profits referred to in paragraph 1 shall not include profits from the provision of accommodation or
transportation other than from the operation of ships or aircraft in international traffic.
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 ENTERPRISE

Where
1. 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
2. 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.
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 the two enterprises, then that other State may, in accordance with
paragraph 3 of Article 25, make the appropriate adjustment to the amount of the tax charged therein on
those profits if it agrees with the adjustment made by the first-mentioned Contracting State. In
determining such adjustment, due regard shall be paid to the other provisions of this Agreement and
the competent authorities of the Contracting States shall if necessary consult each other.
The provisions of paragraph 2 shall not apply in the case of fraud, gross negligence, or willful
default.
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

Dividends paid by a company which is a resident of a Contracting State to a resident of the other
Contracting State may be taxed in that other State.
However, if the beneficial owner of the dividends is a resident of the other Contracting State, the
tax charged by the first-mentioned State may not exceed ten per cent of the gross amount of the
dividends actually distributed.
The term “dividends” as used in this Article means income from shares, “jouissance” shares or
“jouissance” rights, mining shares, founders’ shares or other rights, not being debt-claims,
participating in profits, as well as income from other corporate rights which is subjected to the same
taxation treatment as income from shares by the laws of the State of which the company making the
distribution is a resident.
The provisions of 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.
A Contracting State may not impose any tax on the dividends paid by a company which is not a resident
of that State, except insofar as the dividends are paid to a resident of that 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 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 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 ten per cent of the amount of such profits
after deducting therefrom income tax and other taxes on income imposed thereon in that other
State.
The provision of paragraph 6 of this Article shall not affect the provision contained in any
production sharing contract and contracts of work (or any other similar contracts) relating to oil and
gas sector or other mining sector concluded by 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

Interest arising in a Contracting State and paid to a resident of the other Contracting State may be
taxed in that other State.
However, such interest may also be taxed in the Contracting State in which it arises and according to
the laws of that State, but if the recipient is the beneficial owner of the interest the tax so
charged shall not exceed ten per cent of the gross amount of the interest.
Notwithstanding the provisions of paragraph 2, interest referred to in paragraph 1 shall be taxable
only in the Contracting State in which the beneficial owner is a resident if:
1. the beneficial owner is a Contracting State, a political subdivision, or local authority, or its
  Central Bank;
2. the interest is paid by any of the entities mentioned in sub-paragraph (a);
3. the interest arises in Indonesia and is paid in respect of a loan for a period of not less than
  three years granted, guaranteed or insured, or a credit for such period granted, guaranteed or
  insured, by Banco Nacional de Comercio Exterior, S.N.C., Nacional Financiera, S.N.C.; or
4. the interest arises in Mexico and is paid in respect of a loan for a period of not less than three
  years granted, guaranteed or insured, or a credit for such period granted, guaranteed or insured
  by financial institutions wholly controlled by the Government of Indonesia to be agreed upon by
  competent authorities of both States.
The term “interest” as used in this Article means income from debt-claims of every kind, whether or
not secured by mortgage, and whether or not carrying a right to participate in the debtor’s profits,
and in particular, income from government securities and income from bonds or debentures, including
premiums and prizes attaching to such securities, bonds or debentures, as well as income assimilated
to income from money lent under the taxation law of the State in which the income arises, including
interest on deferred payments sales. Penalty charges for late payment shall not be regarded as
interest for the purpose of this Article.
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a
resident of a Contracting State, carries on business in the other Contracting State in which the
interest arises, through a permanent establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and the debt-claim in respect of
which the interest is paid is effectively connected with (a) such permanent establishment or fixed
base, or with (b) business activities referred to under (c) of paragraph 1 of Article 7. In such case,
the provisions of Article 7 or 14, as the case may be, shall apply.
Interest shall be deemed to arise in a Contracting State when the payer is that State itself, 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, 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 there is a special relationship between the payer and the beneficial owner or between both of
them and some other person and the amount of the interest 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.
The provisions of this Article shall not apply if the competent authorities agree that the debt-claim
in respect of which the interest is paid was created or assigned with the main purpose of taking
advantage of this Article. In that case the provisions of the domestic law of the Contracting State in
which the interest arises shall apply.

Article 12
ROYALTIES

Royalties arising in a Contracting States and paid to a resident of the other Contracting State may be
taxed in that other State.
However, such royalties may also be taxed in the State in which they arise and according to the laws
of that State, but if the recipient is the beneficial owner of the royalties the tax so charged shall
not exceed ten per cent of the gross amount of the royalties.

The term “royalties” in this Article means payments or credits, whether periodical or not, and however
described and computed, to the extent to which they are made as consideration for:

(a)

the use of, or the right to use, any copyright, patent, design or model, plan, secret formula or
process, trademark or other like property or right; or

(b)

the use of, or the right to use, any industrial, commercial or scientific equipment; or

(c)

the supply of scientific, technical, industrial or commercial knowledge or information; or

(d)

the supply of any assistance that is ancillary and subsidiary to, and is furnished as a means of
enabling the application or enjoyment of, any such property or right as is mentioned in
sub-paragraph (a), any such equipment as is mentioned in sub-paragraph (b) or any such knowledge
or information as is mentioned in sub-paragraph (c); or

(e)

the use of, or the right to use:

(i)	motion picture films; or
(ii)	films or video for use in connection with television; or
(iii)	tapes for use in connection with radio broadcasting; or

(f)

for the reception of, or the right to receive, visual images or sounds, or both, transmitted to
the public by satellite or by cable, optic fibre or similar technology, or the use in connection
with television broadcasting or radio broadcasting;

(g)

total or partial forbearance in respect of the use or supply or any property or right referred
to in this paragraph.

The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a
resident of a Contracting State, carries on business in the other Contracting State in which the
royalties arise, through a permanent establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and the right or property in respect
of which the royalties are paid is effectively connected with (a) such permanent establishment or
fixed base, or with (b) business activities referred to under (c) of paragraph 1 of Article 7. In such
case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a
political subdivision, a local authority or a resident of that State. Where, however, the person
paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting
State a permanent establishment or a fixed base and such royalties are borne by such permanent
establishment or fixed base, then such royalties shall be deemed to arise in the State in which the
permanent establishment or fixed base is situated.
Where, by reason of a special relationship between the payer and the beneficial owner or between both
of them and some other person, the amount of the royalties, having regard to the use, right or
information for which they are paid, exceeds the amount which would have been agreed upon by the payer
and the beneficial owner in the absence of such relationship, the provisions of this Article shall
apply only to the last-mentioned amount. In such case, the excess part of the payment shall remain
taxable according to the laws of each Contracting State, due regard being had to the other provisions
of this Agreement.
The provisions of this Article shall not apply if the competent authorities agree that the rights in
respect of which the royalties are paid were created or assigned with the main purpose of taking
advantage of this Article. In that case the provisions of the domestic law of the Contracting State in
which the royalties arise shall apply.

Article 13
CAPITAL GAINS

Gains derived by a resident of a Contracting State from the alienation of immovable property referred
to in Article 6 and situated in the other Contracting State may be taxed in that other State.
Gains from the alienation of shares or other rights of a company which assets consist principally,
directly or indirectly, of immovable property situated in a Contracting State or any other right
pertaining to such immovable property, may be taxed in that State.
In addition to gains taxable in accordance with the provisions of the preceding paragraphs of this
Article, gains derived by a resident of a Contracting State from the alienation of stock,
participation, or other rights in the capital of a company which is a resident of the other
Contracting State, may be taxed in that other Contracting 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 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 the Contracting State
in which the enterprise is a resident.
Gains from the alienation of any property other than that referred to in Article 12 or in the
preceding paragraphs of this Article shall be taxable only in the Contracting State of which the
alienator is a resident.

Article 14
INDEPENDENT PERSONAL SERVICES

Income derived by a resident of a Contracting State in respect of professional services or other
activities of an independent character shall be taxable only in that State. However, such income may
also be taxed in the other Contracting State if:

(a)	the resident, being an individual, is present in the other State for a period or periods exceeding in the aggregate 91 days in any twelve-month period commencing or ending in the fiscal year concerned; or
(b)	the resident has a fixed base regularly available in that other State for the purpose of performing its activities, but only so much of the income as is attributable to services performed in that other State.

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.

Article 15
DEPENDENT PERSONAL SERVICES

Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar
remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable
only in that State unless the employment is exercised in the other Contracting State. If the
employment is so exercised, such remuneration as is derived therefrom may be taxed in that other
State.

Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting
State in respect of an employment exercised in the other Contracting State shall be taxable only in
the first-mentioned State if:

(a)	the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the fiscal year concerned, 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.

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 may be taxed in that State.

Article 16
DIRECTORS’ FEES

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 as a statutory supervisor, and in the case of
Mexico, in his capacity as an “administrador” or a “comisario”, and in the case of Indonesia, in his
capacity as “anggota dewan komisaris”, of a company which is a resident of the other Contracting State
may be taxed in that other State.
The remuneration which a person to whom paragraph 1 applies, derived 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 SPORTPERSON

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 artist, or a musician,
or as a sportperson, from his personal activities as such exercised in the other Contracting State,
may be taxed in that other State. Income referred to in this paragraph shall include income derived
from any personal activities performed in the other Contracting State by such resident relating to
their reputation as an entertainer or sportperson.
Where income in respect of personal activities exercised by an entertainer or a sportperson in their
capacity as such accrues not to the entertainer or sportperson themselves 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 sportperson are exercised.
There shall be deemed as income to which this paragraph applies, the income derived by a resident of
the other Contracting State from the performance of independent personal services, the direct use,
letting, or use in any other form of goods or their alienation thereof, related to the activities
exercised by an entertainer or a sportperson referred to in paragraph 1.
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 AND ANNUITIES

Subject to the provisions of paragraph 2 of Article 19, any pensions or other similar remuneration
paid to a resident of one of the Contracting States from a source in 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 taxable in that other State.
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

1.	(a)	Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
	(b)	However, such salaries wages and other remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who :
		(i)	is a national of that State; or
		(ii)	did not become a resident of that State solely for the purpose of rendering the services.
2.	(a)	Any pension paid by, or out of funds crested by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
	(b)	However, such pension shall be taxable only in the other Contracting State if the individual is a resident is a resident of, and a national of, that State.
3.	The provision of Article 15, 16 and 18 shall apply to salaries, wages and other similar remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.

Article 20
TEACHERS AND RESEARCHERS

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

Article 21
STUDENTS AND TRAINEES

Payments which a student or business trainee who is or was immediately before visiting a Contracting
State a resident of the other Contracting State and who is present in the first-mentioned Contracting
State solely for the purpose of his education or training receives for the purpose of his maintenance,
education or training shall not be taxed in that Contracting State, provided that such payments arise
from sources outside that Contracting State.
In respect of grants, scholarships and remuneration from employment not covered by paragraph 1, a
student or business trainee described in paragraph 1 shall, in addition, be entitled during such
education or training to the same exemption, [reliefs] or reductions in respect of taxes available to
residents of the Contracting State which he is visiting.

Article 22
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 State.

Article 23
ELIMINATION OF DOUBLE TAXATION

In accordance with the provisions and subject to the limitations of the laws of Mexico, as may be
amended from time to time without changing the general principle hereof, Mexico shall allow its
residents as a credit against the Mexican tax:

(a)	the Indonesian tax paid on income arising in Indonesia, in an amount not exceeding the tax payable in Mexico on such income; and
(b)	in the case of a company owning at least ten per cent of the capital of a company which is a resident of Indonesia and from which the first-mentioned company receives dividends, the Indonesian tax paid by the distributing company with respect to the profits out of which the dividends are paid.

In the case of Indonesia Double Taxation shall be avoided as follows:
Where a resident of a Contracting State derives income from Mexico, the amount of tax on that income
payable in Mexico in accordance with the provisions of this Agreement, may be credited against the tax
levied in Indonesia. The amount of credit, however, shall not exceed the amount of the tax in
Indonesia on that income computed in accordance with its taxation laws and regulations.

Article 24
NON-DISCRIMINATION

Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation
or any requirement connected therewith, which is other or more burdensome than the taxation and
connected requirements to which nationals of that other State in the same circumstances, in particular
with respect to residence, are or may be subjected. This provision shall, notwithstanding the
provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting
States.
The taxation on a permanent establishment which an enterprise of a Contracting State has in the other
Contracting State shall not be less favourably levied in that other State than the taxation levied on
enterprises of that other State carrying on the same activities.
The provisions of this Article 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.
Except where the provisions of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12,
apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a
resident of the other Contracting State shall, for the purpose of determining the taxable profits of
such enterprise, be deductible under the same conditions as if they had been paid to a resident of the
first-mentioned State.
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.
The term “taxation” as used in this Article means taxes of every kind and description, except for the
Indonesian municipal tax on foreign nationals (pajak bangsa asing).

Article 25
MUTUAL AGREEMENT PROCEDURE

Where a person considers that the actions of one or both of the Contracting States result or will
result for him in taxation not in accordance with the provisions of this Agreement, he may,
irrespective of the remedies provided by the domestic law of those States, present his case to the
competent authority of the Contracting State of which he is a resident or, if his case comes under
paragraph 1 of Article 24, to that of the Contracting State of which he is a national.
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, provided that the competent authority of the other Contracting
State is notified of the case within three years from the first notification of the action resulting
in taxation not in accordance with the provisions of this Agreement. In such case, any agreement
reached shall be implemented subject to the time limits provided in its tax laws.
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. For the
purposes, the Contracting States shall take into account the Model Tax Agreement on Income and on
Capital, the General Guidelines, and the Decisions and Recommendations of the Organisation for
Economic Cooperation and Development (OECD) regarding tax issues. They may also consult together
regarding cases not provided for in the Agreement.
The competent authorities of the Contracting States may communicate with each other directly for the
purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in
order to reach agreement to have an oral exchange of opinions, such exchange may take place through a
Commission consisting of representatives of the competent authorities of the Contracting States.
If any difficulty or doubt arising as to the interpretation or application of this Agreement cannot be
resolved by the competent authorities pursuant to the previous paragraphs of this Article, the case
may, if both competent authorities and the taxpayer agree, be submitted for arbitration, provided that
the taxpayer agrees in writing to be bound by the decision of the arbitration board. The decision of
the arbitration board in a particular case shall be binding on both States with respect to that case.
The procedures shall be established between the States by notes to be exchanged through diplomatic
channels.
Notwithstanding any treaty on international trade or investment [to] which the Contracting States are
or may become parties, any dispute over a measure taken by a Contracting State involving a tax covered
by Article 2 or, in the case of non-discrimination, any taxation measure taken by a Contracting State
including a dispute whether this Agreement applies, shall be settled only under the Agreement unless
the competent authorities of the Contracting State agree otherwise.

Article 26
EXCHANGE OF INFORMATION

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 imposed by the Contracting States insofar as the taxation thereunder is not contrary
to the Agreement. The exchange of information shall apply to taxes of every kind and description and
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 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 imposed on behalf of that State. Such persons or authorities shall
use the information only for such purposes. They may disclose the information in public court
proceedings or in judicial decisions.

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

(a)	carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
(b)	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)	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
MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

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

Article 28
ENTRY INTO FORCE

The Contracting States shall notify each other in writing, through diplomatic channels, that the
procedures required by its law for the entry into force of this Agreement have been satisfied. The
Agreement shall enter into force on the date of receipt of the last notification.

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, for taxable years beginning on or after 1 January in the year next following that in which the Agreement enters into force.

Article 29
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 notice of termination at least six
months before the end of any calendar year beginning after the expiration of a period of five years
from the date of its entry into force.
In such case, the Agreement shall cease to have effect:

(a)	in respect of tax withheld at source, to income derived on or after 1 January in the year next following that in which the notice of termination is given;
(b)	in respect of other taxes on income, for taxable years beginning on or after 1 January in the year next following that in which the notice of termination is given.

In witness whereof the undersigned, duly authorized thereto, have signed this Agreement.

Done in triplicate at Los Cabos City, Mexico, this 6th day of September 2002, in the Spanish, Indonesian
and English languages, all of the texts being equally authentic. In case there is any divergence of
interpretation between the Spanish and the Indonesian texts, the English text shall prevail.

For the Government of
the Republic of Indonesia

Yosef Berty Fernandez
Charge d’ Affaires a.i.

For the Government of
the United Mexican States

Francisco Gil Diaz
Minister of Finance and Public Credit

PROTOCOL

At the moment of signing the Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to taxes on income, this day concluded between the Government of the United Mexican
States and the Government of the Republic of Indonesia, the undersigned have agreed that the following
provisions shall form an integral part of the Agreement.

With reference to paragraph 2 of Article 8
The income from shipping and air transport in international traffic shall include a lease of
containers provided that it is incidental to such income.
With reference to paragraph 6 of Article 10
It is understood that the branch tax referred to in paragraph 6 of article 10 would be fully
applicable even if such paragraph had not been included in this Agreement.

In witness whereof the undersigned, duly authorized thereto, have signed this Protocol.

For the Government of
the Republic of Indonesia

Yosef Berty Fernandez
Charge d’ Affaires a.i.

For the Government of
the United Mexican States

Francisco Gil Diaz
Minister of Finance and Public Credit

Mexico

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