Mongolia

AGREEMENT BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE GOVERNMENT OF MONGOLIA

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

1. 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. 

2. 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, taxes on the total amounts of wages or salaries paid by
   enterprises. 

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

   (a)	In the case of Mongolia:
   	(1)	the individual income tax;
   	(2)	the corporate income tax;
   	(hereinafter referred to as “Mongolian tax”);
   (b)	In the case of Indonesia: the income tax imposed under the Law No. 7 of 1983 as amended, (hereinafter referred to as “Indonesian tax”).

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

Article 3
GENERAL DEFINITIONS

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

   (a)	the term “a Contracting State” and “the other Contracting State” mean Mongolia or Indonesia as the context requires;
   (b)	the term “Mongolia” means, when used in a geographical sense, all the territory of Mongolia and any area in which the tax law of Mongolia is in force insofar as Mongolia exercises in such area, in conformity with international law, sovereign rights to exploit its natural resources;
   (c)	the term “Indonesia” means the territory of the Republic of Indonesia as defined in its laws and the adjacent areas over which the Republic of Indonesia has sovereignty, sovereign rights or jurisdiction in accordance with the provisions of the United Nations Convention on the Law of the Sea, 1982;
   (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 “nationals” 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;
   (h)	the term “international traffic” means any transport by a ship or an aircraft operated by an enterprise of a Contracting State, except when the ship or the aircraft is operated solely between places in the other Contracting State;
   (i)	the term “competent authority” means:
   	(i)	in the case of Mongolia, the Minister of Finance or his authorized representative;
   	(ii)	in the case of Indonesia, the Minister of Finance or his authorized representative;

2. As regards the application of
   the
   Agreement by a Contracting State any term not defined therein shall,
   unless the context otherwise requires, have the meaning which it has
   under the laws of that Contracting 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, place of incorporation or any
   other criterion of a similar nature. 

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

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

3. Where by reason of the
   provisions
   of paragraph 1 a person other than an individual is a resident of both
   Contracting States, then it shall be deemed to be a resident of the
   State in which its place of effective management is situated.

Article 5
PERMANENT ESTABLISMENT

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 working ship used for exploration or exploitation of natural resources.

3. The term “permanent
   establishment”
   likewise encompasses: 

   (a)	a building site, a construction, assembly or installation project or supervisory activities in connection therewith, but only where such site, project or activities continue for a period of more than 6 months;
   (b)	the furnishing of services, including consultancy services by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only where activities of that nature continue (for the same or a connected project) within the country for a period or periods aggregating more than 3 months within any twelve month period.

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 on behalf of the enterprise;
   (f)	the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;
   (g)	the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (f), 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
   independent status to whom paragraph 7 applies — is acting in a
   Contracting State on behalf of an enterprise of the other Contracting
   State, that enterprise shall be deemed to have a permanent
   establishment in the first-mentioned State in respect of any activities
   which that person undertakes for the enterprise, if such a
   person: 

   (a)	has and habitually exercises in the first-mentioned State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed [place] of business a permanent establishment under the provisions of that paragraph; or
   (b)	has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise; or
   (c)	manufactures or processes in the first-mentioned State for the enterprise goods or merchandise belonging to the enterprise.

6. Notwithstanding the preceding
   provisions of this Article, an insurance enterprise of a Contracting
   State shall, except in regard to re-insurance, be deemed to have a
   permanent establishment in the other Contracting State if it collects
   premiums in the territory of that other State or insures risks situated
   therein through a person other than an agent of an independent status
   to whom paragraph 7 applies. 

7. An enterprise of a Contracting
   State shall not be deemed to have a permanent establishment in the
   other Contracting State merely because it carries on business in that
   other State through a broker, general commission agent or any other
   agent of an independent status, provided that such persons are acting
   in the ordinary course of their business. However, when the activities
   of such an agent are devoted wholly or almost wholly on behalf of that
   enterprise, he shall not be considered to be 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 and aircraft shall
   not be regarded as immovable property.

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

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

Article 7
BUSINESS PROFITS

1. The profits of an enterprise of
   a
   Contracting State shall be taxable only in that 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 and 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. 

4. 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 maybe customary; the method of
   apportionment adopted shall, however, be such that the result shall be
   in accordance with the principles contained in this Article. 

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

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

Article 8
SHIPPING AND AIR TRANSPORT

1. Profits from sources within a
   Contracting State derived by an enterprise of the other Contracting
   State from the operation of ships and aircraft in international traffic
   shall be taxable only in the State in 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 enterprises 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. 

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 10 per cent of the gross amount of the
   dividends actually distributed. 
   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, “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. 

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. Notwithstanding any other
   provisions of this Agreement where a company which is a resident of a
   Contracting State has a permanent establishment in the other
   Contracting State, the profits of the permanent establishment may be
   subjected to an additional tax in that other State in accordance with
   its law, but the additional tax so charged shall not exceed 10 per cent
   of the amount of such profits after deducting therefrom income tax and
   other taxes on income imposed thereon in that other State. 

6. The rate of tax in paragraph 2
   and
   in paragraph 5 of this Article shall not affect the rate of tax applied
   in any production sharing contracts or any other similar contracts
   relating to [the] oil and gas sector or other mining sector concluded
   by the Government of a Contracting State, its instrumentality, its
   relevant state oil and gas company or any other entity thereof with a
   person who is a resident of the other Contracting State. 

Article 11
INTEREST

1. Interest arising in a
   Contracting
   State and paid to a resident of the other Contracting State may be
   taxed in that other State if such resident is the beneficial owner of
   the interest.

2. However, such interest may also
   be
   taxed in the Contracting State in which it arises and according to the
   laws of that State, but if the recipient is the beneficial owner of the
   interest the tax so charged shall not exceed 10 per cent of the gross
   amount of the interest. 

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

4. The term “interest” as used in
   this
   Article means income from debt-claims of every kind, whether or not
   secured by mortgage, and whether or not carrying a right to participate
   in the debtor’s profits, and in particular, income from government
   securities and income from bonds or debentures, including premiums 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 States in which the income arises, including interest on deferred
   payment sales. Penalty charges for late payment shall not be regarded
   as interest for the purpose of this Article. 

5. The provisions of paragraphs 1
   and
   2 shall not apply if the beneficial owner of the interest, being a
   resident of a Contracting State, carries on business in the other
   Contracting State in which the interest arises, through a permanent
   establishment situated therein, or performs in that other 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 Article 14, as the case
   may be, shall apply. 

6. Interest shall be deemed to
   arise
   in a Contracting State when the payer is that 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 in connection with which the indebtedness
   on which the interest is paid was incurred, and such interest is borne
   by such permanent establishment or fixed base, then such interest shall
   be deemed to arise in the State in which the permanent establishment or
   fixed base is situated. 

7. Where, by reason of a special
   relationship between the payer and the beneficial owner or between both
   of them and some other person, the amount of the interest, having
   regard to the debt-claim for which it is paid, exceeds the amount which
   would have been agreed upon by the payer and the beneficial owner in
   the absence of such relationship, the provisions of this Article shall
   apply only to the last-mentioned amount. In such case, the excess part
   of the payments shall remain taxable according to the laws of each
   Contracting State, due regard being had to the other provisions of this
   Agreement.

Article 12
ROYALTIES

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

2. However, such royalties may also
   be
   taxed in the Contracting State in which they arise, and according to
   the laws of that State, but if the recipient is the beneficial owner of
   the royalties, the tax so charged shall not exceed 10 per cent of the
   gross amount of the royalties.

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

4. The provisions of paragraphs 1
   and
   2 shall not apply if the beneficial owner of the royalties, being a
   resident of a Contracting State, carries on business in the other
   Contracting State in which the royalties arise, through a permanent
   establishment situated therein, or performs in that other Contracting
   State independent personal services from a fixed base situated therein,
   and the right or property in respect of which the royalties are paid as
   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. 

5. 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 in connection with which the liability to
   pay the royalties was incurred, and such royalties are borne by such
   permanent establishment or fixed base, then such royalties shall be
   deemed to arise in the State in which the permanent establishment or
   fixed base is situated. 

6. Where, by reason of a special
   relationship between the payer and the beneficial owner or between both
   of them and some other person, the amount of the royalties, having
   regard to the use, right or information for which they are paid,
   exceeds the amount which would have been agreed upon by the payer and
   the beneficial owner in the absence of such relationship, the
   provisions of this Article shall apply only to the last-mentioned
   amount. In such case, the excess part of the payments shall remain
   taxable according to the laws of each Contracting State, due regard
   being had to the other provisions of this Agreement. 

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
   ships
   or aircraft operated in international traffic or movable property
   pertaining to the operation of such ships or aircraft, shall be taxable
   only in that State. 

4. Gains from the alienation of any
   property other than that referred to in paragraphs 1 to 3 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
   Contracting State except in one of the following circumstances, when
   such income may also be taxed in the other Contracting State: 

   (a)	if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other Contracting State; or
   (b)	if his stay in the other Contracting State is for a period or periods exceeding in the aggregate 91 days in the calendar year concerned; in that case, only so much of the income as is derived from his activities performed in that other Contracting State may be taxed in that other Contracting State.

2. 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

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

   (a)	the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 91 days in the calendar 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.

3. Notwithstanding the preceding
   provisions of this Article, remuneration derived in respect of an
   employment exercised aboard a ship or aircraft operated in the
   international traffic by an enterprise of a Contracting State shall be
   taxable only in that State. 

Article 16
DIRECTORS’ FEES

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 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. 

Article 17
ARTISTES AND ATHLETES

1. Notwithstanding the provisions
   of
   Articles 14 and 15, income derived by a resident of a Contracting State
   as an entertainer, such as a theatre, motion picture, radio or
   television artiste, or a musician, or as an athlete, from his personal
   activities as such exercised in the other Contracting State, may be
   taxed in that other Contracting State. 

2. Where income in respect of
   personal
   activities exercised 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

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

2. The term “annuity” means a
   stated
   sum payable periodically at stated times during life or during a
   specified or ascertainable period of time under an obligation to make
   the payments in return for adequate and full consideration in money or
   money’s worth. 

Article 19
GOVERNMENT SERVICE

Article 20
TEACHERS AND RESEARCHERS

Article 21
STUDENTS AND TRAINEES

Article 22
OTHER INCOME

Article 23
METHODS FOR ELIMINATION OF DOUBLE TAXATION

Double taxation shall be eliminated
as
follows:

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. 

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
   Contracting State, carrying on the same activities. This provision
   shall not be construed as obliging a Contracting State to grant to
   residents of the other Contracting State any personal allowances,
   reliefs and reductions for taxation purposes on account of civil status
   or family responsibilities which it grants to its own residents.

3. Except where the provisions of
   paragraph 1 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 have been paid to a resident of the first-mentioned
   State. 

4. 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 requirements 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. 

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
   three years from the first notification of the action resulting in
   taxation not in accordance with the provisions of the
   Agreement. 

2. The competent authority shall
   endeavour, if the objection appears to it to be justified and if it is
   not itself able to arrive at 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 provisions of 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 this 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. 

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 covered by the
   Agreement. 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. 

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
DIPLOMATIC AGENTS AND CONSULAR OFFICERS

Article 28
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)	with respect to taxes withheld at source, on or after the first day of January in the calendar year next following that in which the Agreement enters into force; and
   (b)	with respect to other taxes for all taxable periods beginning on or after the first day of January in the calendar year next following that in which the Agreement enters into force.

Article 29
TERMINATION

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

lN WITNESS WHEREOF the undersigned,
duly authorized thereto, have signed this Agreement.

Done in duplicate at Ulan Bator this
2nd day of July
1996 in the Indonesian, Mongolian and English languages, all texts
being equally authentic. In case of divergency of interpretation, the
English text shall prevail.