Morocco

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

AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDONESIA AND THE GOVERNMENT OF THE KINGDOM OF MOROCCO FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the Republic of Indonesia and The Government of the Kingdom of Morocco, desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
HAVE AGREED AS FOLLOWS:

Article 1
PERSONS COVERED
This Agreement shall apply to persons who are residents of one or both of Contracting States.

Article 2
TAX 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 and taxes on the total amounts of wages or salaries paid by enterprises.
3.	The existing taxes to which the Agreement shall apply are in particular:
	a)	In the case of the Republic of Indonesia:
		(i)	the income tax imposed under the Undang-undang Pajak Penghasilan 1984 (Law Number 7 of 1983 as amended)
		(hereinafter referred to as “Indonesian taxes”)
	b)	In the case of the Kingdom of Morocco
		(i)	income tax;
		(ii)	corporation tax;
		(hereinafter referred to as “Moroccan taxes”).
4.	The Agreement shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State 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 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” means the territory of the Republic of Indonesia as defined in its laws and part of continental shelves, the Exclusive Economic Zone and adjacent seas over which the Republic of Indonesia has sovereignty, sovereign right or jurisdiction in accordance with the 1982 United Nations Convention on the Law of the Sea;
	b)	the term “Morocco” means the Kingdom of Morocco and, when used in geographical sense the term “Morocco” includes:
		(i)	The territory of the Kingdom of Morocco, the territorial sea thereof; and
		(ii)	The maritime areas beyond the territorial sea, including the seabed and subsoil thereof (continental shelf) and the exclusive economic zone over which Morocco exercises sovereign rights, in accordance with its domestic laws and international law, for the purpose of exploration and exploitation of the natural resources of such areas;
	c)	the terms “a Contracting State” and “the other Contracting State” mean Morocco of Indonesia as the context requires;
	d)	the term “tax” means Indonesian tax or Moroccan tax, as the context requires;
	e)	the term “person” includes an individual, a company and any other body of persons;
	f)	the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;
	g)	the term “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;
	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 “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;
	j)	The term “competent authority” means:
		(i)	in the case of Indonesia, the Minister of Finance or his authorized representative;
		(ii)	in the case of Morocco, the Minister of Finance or his authorized representative;
2.	As regards the application of the Agreement by a Contracting State any term not defined shall, unless the context otherwise, requires, have the meaning which it has under the law of that Contracting State relating to the taxes which are the subject of this Agreement.

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, and also includes that State and any political subdivision or local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State.
2.	Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting State, then his status shall be determined as follows:
	a)	he shall be deemed to be a resident of a Contracting State in which he has a permanent home available to him, if he has a permanent home available to him in both Contracting State, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interest);
	b)	if the Contracting State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode;
	c)	if he has an habitual abode in both Contracting State or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national;
	d)	if he is a national of both Contracting State or of neither of them, the competent authorities of the Contracting States shall settle the question by a mutual agreement.
3.	Where by reason of the provisions of paragraph 1 of the Article a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the Contracting States in which its place of effective management is situated.

Article 5
PERMANENT ESTABLISHMENT
1.	For the purposes of this Agreement, the term “permanent establishement” 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.
2.	The term “ permanent establishment” includes especially:
	a)	a place of management;
	b)	a branch;
	c)	an office;
	d)	a factory;
	e)	a workshop, dan
	f)	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;
	g)	a sales outlet;
	h)	a warehouse in relation to a person providing storage facilities for others;
	(i)	a farm of plantation; and; and
	(j)	a building site or construction or assembly project or supervisory activities in connection therewith, but only where such site, project or activity continues for a period of more than six months.
3.	a)	The term “permanent establishment” likewise encompasses:
		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 anggregating more than 60 days within any twelve month period.
	b)	An enterprise shall be deemed to have a permanent establishment in a Cantracting State and to carry on business through that permanent establishment if it provides services or facilities in connection with, or supplies plant and machinery on hire used for or to be used in the prospecting for, or extracting or exploitation of mineral oils in that State.
4.	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, 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, 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 carrying on, for the enterprise, any other activity or a preparatory or auxiliary character;
	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.
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 State in respect of any activities which that person undertakes for the enterprise, if such a 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 no such authority, but habitually maintains in the first mentioned State a stock of goods or merchandise from which he/she regularity 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.
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 shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that 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/she/it 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 constitue either company a permanent establishment of the other

Article 6
INCOME FROM IMMOVABLE PROPERTY
1.	Income derived by a resident of 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 payment 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 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 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 amount, if any, paid 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 bank enterprise, by way of interest on moneys lent to the permanent establishment.
4.	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.
5.	For the purposes of the proceeding 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 derived by an enterprise of a Contracting State from the operation of ships on aircraft in international traffic shall be taxable only in that State.
2.	For the purposes of this Article, profits derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall include inter alia profits derived from the use or rental of containers, if such profits are incidental to the profits to which the provisions of paragraph 1 apply.
3.	The provisions of paragraph 1 shall also apply to profits from the participation in a pool, joint business or an international operating agency.

Article 9
PERUSAHAAN-PERUSAHAAN YANG MEMPUNYAI HUBUNGAN ISTIMEWA
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 ether 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, than 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, than 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 this Agreement and the competent authorities of the Contracting States shall, if necessary, consult each other.

Article 10
DEVIDENDS
1.	Dividends paid by a company which is a resident of Contracting State to a resident of the other Contracting State may be taxed in that other State. 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 the 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.
2.	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.
3.	The provisions of paragraphs 1 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the previsions of Article 7 or Article 14, as the case may be, shall apply.
4.	Where a company which is a resident of a Contracting State 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 profit consist wholly or party of profits or income arising in such other State.
5.	Notwithstanding any of other 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 the 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 provision of paragraph 5 of this Article shall not affect the provision contained in any production sharing contract relating to oil and gas 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 States.

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 in 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 the paragraph 2:
	a)	interest arising in Indonesia and paid to the Government of the Kingdom of Morocco or to the Central Bank of Morocco (Bank Al Magrib) shall be exempt from tax in the Republic of Indonesia;
	b)	interest arising in Morocco and paid to the Government of the Republic of Indonesia or the Bank of Indonesia shall be exempt from tax in the Kingdom of Morocco;
	c)	interest paid in connection with the sale on credit of any industrial or scientific equipment shall be taxable only in the Contracting State of which beneficiary is a resident.
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.
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 States 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 such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14 as the case may be, shall apply.
6.	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 resident of a Contracting State or not, has in 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 in borne by such permanent establishment or a fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or a 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 same 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 payment shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

Article 12
ROYALTIES
1.	Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2.	However, such royalties may be taxed in the Contracting State in which they arise, and according to the law of the State, but if the recipient is the beneficial owner of th roaylties, the tax so charged shall not exceed 10 per cent of the gross amount of the royalties. The competent authorities of the Contracting State shall by mutual agreement settle the mode of application of this limiation.
3.	The term “royalties” as used in this Article means payments 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 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, commercials or scientific equipment, or for information concerning industrial, commercial or scientific experience, as well as technical assistance and other services that are ancillary and subsidiary to any such property or right, any such equipment or any such knowledge or information.
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 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.	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 of rixed base, then such royalties shall be deemed to arise in the State in Which the permanent establishment of fixed base is situated.
6.	Where, by reason of 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.

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 taxes 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 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 bas, 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 the Contracting State of which the enterprise is a resident.
4.	Gains from the alienation of shares of a company whose property is constituted essentially by immovable property which is situated in a Contracting State may be taxed in that Contracting State.
5.	Gains from the alienation of any property other than that referred to the paragraphs 1, 2, 3 and 4, 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 61 days within any twelve month period. 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, lawyers, engineers, architects, dentist and accountants.

Article 15
DEPENDENT PERSONAL SERVICES
1.	Subject to the provisions of article 16, 18, 19, 20 and 21, 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 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 concerned; and
	b)	the remuneration is paid by, or on behall of an employer who is not a resident of the other State, and
	c)	the remuneration is not borne by permanent establishment or a fixed base which the employer has in the other State.
3.	Notwithstanding the preceding provisions of this Article, remuneration derived is 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 FEES
1.	Directors’ fees and other similar payments derived by a resident of a Contracting State is 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, 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 SPORTSMEN
1.	Notwhitstanding the provisions of Article 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 sprotsmen, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.
2.	Where income in respect or personal activities exercised by an entertainer or a sprotsmen in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, not withstanding the provisions of Article 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsmen are exercised.
3.	Notwithstanding the provisions of paragraph 1 and 2, income derived from activities reverred to in paragraphs 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 political subdivision or a local authority thereof.

Articlel 18
PENSIONS
1.	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 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 periode 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 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 of subdivisions or authority shall be taxable only in that State.
	b)	However, such 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 other 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 created 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)	NHowever, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.
3.	The provisions of Article 15, 16 and 18 shall apply to remunerations and pensions in respect of services rendered in connection with business carried on by a Contracting State or a political subdivision or a local authority thereof.

Article 20
STUDENTS AND APPRENTICES
Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the fist 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 State, provided that such payment arise from sources outside that State.

Article 21
TEACHERS AND RESEARCHERS
1.	An individual who visits a Contracting State at the invitation of that State, of a public university and other educational or culutural institution which is recognized as non profitable by the Government of that State, in the part of programme of a cultural exchange for a period not exceeding two years in the aim of the teaching, giving conferences or carrying out researches for that institution, who is or was immediately before that visit, a resident of the other Contracting State, shall be exempt from tax in the first Contracting State on his remuneration in respect of such activity, provided that such remuneration is derived by him from sources outside that State.
2.	The provision of paragraph 1 shall not apply to remunerations received in respect of research works undertaken not in the public interest but chiefly for the private benefit of specific person or persons.

Article 22
OTHER INCOME
1.	Items of income of a resident of a Contracting State, wherever arising, not dealt with on the foregoing Article of this Agreement, other than income in the form of lotteries, prizes shall be taxable in the first mentioned State.
2.	The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State 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 income is 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.

Article 23
ELIMINATION OF DOUBLE TAXATION
1.	In the case of a resident of Indonesia, double taxation shall be avoided as follows: Where a resident of a Contracting State derives income from the other Contracting State, the ammount of tax on that income payable in that other Contracting State in accordance with the provisions of this Agreement, may be credited against the tax levied in the first mentioned Contracting State imposed on that resident. The amount of credit, however, shall not exceed the amount of the tax on the first mentioned Contracting State on that income computed in accordance with its taxation laws and regulations.
2.	In the case of a resident of Morocco, double taxation shall be avoided as follows:
	a)	Where a resident of Morocco derives income which, in accordance with the provisions of this Agreement, may be taxable in Indonesia, Morocco shall grant as regard of the tax perceived upon that resident’s income, subject to the provisions of sub-paragraph b), a deduction of equal amount to the tax payable on the income in Indonesia. However this deduction may no exceed the part of the tax on the Moroccan income, computed before deduction, corresponding to income taxable in Indonesia.
	b)	Income having profited wholly or partly of an exemption for a given period, in accordance with the fiscal domestic law of one of both Contracting State shall be deemed to be effectively imposed and the tax which would have been due in the absence of such examption, gives the right to a deduction of the tax contengently levied on such income in the other Contracting State.
	c)	Income which in accordance with the provisions of this Agreement, is not to be subjected to tax in a Contracting State, may be taken into account for calculating the rate of tax to be imposed in that Contracting State.

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, in particular with respect to residence, are or may be subjected.
2.	Stateless persons who are residents of a Contracting State shall not be subjected in either 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 the State concerned in the same circumstances are or may be subjected.
3.	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 an account of civil status or family responsibilities which it grants to its own residents.
4.	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 enterprises 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.
5.	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.

Article 25
MUTUAL AGREEMENT PROCEDUR
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 on the remedies provided by the domestic law of those States, present his case to the competent outhority 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 outhority shall endeavor, 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 or the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Agreement.
3.	The competent authorities of the Contracting States shall endeavor 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, including through a joint commission consisting themselves or their representatives, for the purpose of reaching an agreement in the sense or the preceding paragraphs.

Article 26
EXCHANGE OF INFORMATION
1.	The competent authorities of the Contracting State 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 by the Agreement insofar as the taxation thereunder is not contrary to the Agreement. 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 or that State and shall be disclosed only to persons of 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. The 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 adminstrative 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 the other Contracting State; and
	c)	to supply information which would disclose, any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure or which would be contrary to public policy.

Article 27
DIPLOMATIC AGENTS AND CONSULAR OFFICERS
Nothing in this Agreement shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of interntional law or under the provisions of special agreement.

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)	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 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 written notice of termination on or before the thirtieth day of June of any calender year following after the period of five years from the year in which the Agreement enters into force. In such case, the Agreement shall cease to have effect:
a)	in respect of tax withheld at source to income derived on after 1 January in the year next following that in which the notice of termination is given;
b)	in respect of the 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.
N WITNESS WHEREOF: the undersigned, have signed this Agreement.
DONE in duplicate at Rabat this eighth day of June 2008 in the Indonesian, Arabic and English languages, all texts being equally authentic. In Case of divergency or interpretation, the English text shall prevail.



	FOR THE GOVERNMENT OF THE			FOR THE GOVERNMENT OF THE
	REPUBLIC OF INDONESIA			KINGDOM OF MOROCCO

	ttd			ttd

	Dr. N. HASSAN WIRAJUDA			TAIB FASSI FIHRI

Morocco

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