CONVENTION BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE KINGDOM OF NORWAY
FOR
THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
AND ON CAPITAL
Article 1
PERSONAL SCOPE
This Convention shall apply to persons who are residents of one or both of the Contracting States.
Article 2
TAXES COVERED
-
This Convention shall apply to taxes on income and on capital 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 and on capital all taxes imposed on total income, on total
capital, or on elements of income or of capital, including taxes on gains from the alienation of
movable or immovable property. -
The existing taxes to which the Convention shall apply are in particular :
(a) In Indonesia :
the income tax imposed under the Undang-undang Pajak Penghasilan 1984 (Law No. 7 of 1983) and to
the extent provided in such income tax law, the company tax imposed under the Ordonansi Pajak
Perseroan 1925 (State Gazette No. 319 of 1925 as lastly emended by Law No. 8 of 1970) and the
tax imposed under the Undang-undang Pajak atas Bunga, Deviden dan Royalty 1970 (Law No. 10 of
1970)
(hereinafter referred to as “Indonesian tax”).(b) In Norway : (i) the national tax on income (inntektsskatt til staten);
(ii) the county municipal tax on income (inntektsskatt til fylkeskommunen);
(iii) the municipal tax on income (inntektsskatt til kommunen);
(iv) the national contributions to the Tax Equalisation Fund (fellesskatt til
Skattefordelingsfondet);(v) the national tax on capital (formuesskatt til staten);
(vi) the municipal tax on capital (formuesskatt til kommunen);
(vii) the national tax relating to income and capital from the exploration for and the exploitation
of submarine petroleum resources and activities and work relating thereto, including pipeline
transport of petroleum produced (skatt til staten vedrrende inntekt og formue i forbindelse
med underskelse etter og utnyttelse av undersjiske petroleumsforekomster og dertil knyttet
virksomhet og arbeid, herunder rrledningstransport av utvunnet petroleum);(viii) the national dues on remuneration to non-resident artistes (avgift til staten av honorarer som
tilfaller kunstnere bosatt i utlandet);(ix) the seamen’s tax (sjmannsskatt); (hereinafter referred to as “Norwegian tax”). -
The Convention shall also apply to any identical or substantially similar taxes which are imposed by
either Contracting State after the date of signature of the Convention 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
-
For the purposes of this Convention, unless the context otherwise requires:
(a) the term “Indonesia” comprises the territory of the Republic of Indonesia as defined in its
laws and the adjacent areas over which the Republic of Indonesia has sovereign rights or
jurisdiction in accordance with the provisions of the United Nations Convention on the Law of
the Sea, 1982;(b) the term “Norway” means the Kingdom of Norway, including any area outside the territorial
waters of the Kingdom of Norway where the Kingdom of Norway, according to Norwegian
legislation and in accordance with international law, may exercise her rights with respect to
the sea-bed and sub-soil and their natural resources; the term does not comprise Svalbard, Jan
Mayen and the Norwegian dependencies (“biland”);(c) the term “nationals” means:
(i) all individuals possessing the nationality of a Contracting State;
(ii) all legal persons, partnerships and associations deriving their status as such from the laws
in force in a Contracting State;(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 “a Contracting State” and “the other Contracting State” mean Indonesia or Norway as
the context requires;(g) the term “tax” means Indonesian tax or Norwegian tax, as the context requires;
(h) 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;(i) the term “competent authority” means:
(i) in Indonesia, the Minister of Finance or his authorized representative;
(ii) in Norway, the Minister of Finance and Customs or his authorized representative.
-
As regards the application of the Convention by a Contracting State any term not defined therein
shall, unless the context otherwise requires, have the meaning which it has under the law of that
State concerning the taxes to which the Convention applies.
Article 4
RESIDENT
-
For the purposes of this Convention, the term “resident of a Contracting State” means any person who,
under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of
management or any other criterion of a similar nature. But this term does not include any person who
is liable to tax in that State in respect only of income from sources in that State or capital
situated therein. -
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. -
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. If a place of effective management is considered as situated in both
Contracting States, the competent authorities of the Contracting States shall settle the question by
mutual agreement.
Article 5
PERMANENT ESTABLISHMENT
-
For the purposes of this Convention, the term “permanent establishment” means a fixed place of
business through which the business of an enterprise is wholly or partly carried on. -
The term “permanent establishment” includes especially:
(a) a place of management; (b) a branch; (c) an office; (d) a factory; (e) a workshop, and (f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.
-
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 six 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 three months 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 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, for the
supply of information, for scientific research 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. -
Notwithstanding the provisions of paragraphs 1 and 2, where a person – other than an agent of an
independent status to whom paragraph 7 applies – is acting in a Contracting State on behalf of an
enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent
establishment in the first-mentioned Contracting State in respect of any activities which that person
undertakes for the enterprise, if such a person:(a) has and habitually exercises in that State an authority to conclude contracts in the name of
the enterprise, unless the activities of such person are limited to those mentioned in
paragraph 4, which, if exercised through a fixed place of business, would not make this fixed
place of business a permanent establishment under the provisions of that paragraph; 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. -
An insurance enterprise of a Contracting State shall, except with regard to reinsurance, be deemed to
have a permanent establishment in the other Contracting State if it collects premiums in that other
State or insures risks situated therein through an employee or through a representative who is not an
agent of an independent status within the meaning of paragraph 7. -
An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the
other Contracting State merely because it carries on business in that other State through a broker,
general commission agent or any other agent of an independent status, provided that such persons are
acting in the ordinary course of their business. However, when the activities of such an agent are
devoted wholly or almost wholly on behalf of that enterprise, he will not be considered an agent of an
independent status within the meaning of this paragraph, unless he demonstrates that transactions have
been made under arms’ length conditions. -
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 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 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 actives carried on in the that other State of the same or similar kind as those
effected through that permanent establishment. -
Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on
business in the other Contracting State through a permanent establishment situated therein, there
shall in each Contracting State be attributed to that permanent establishment the profits which it
might be expected to make if it were a distinct and separate enterprise engaged in the same or similar
activities under the same or similar conditions and dealing wholly independently with the enterprise
of which it is a permanent establishment. -
In determining the profits of a permanent establishment, there shall be allowed as deductions expenses
which are incurred for the purposes of the business of the permanent establishment including executive
and general administrative expenses so incurred, whether in the State in which the permanent
establishment is situated or elsewhere. However, no such deduction shall be allowed in respect of
amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent
establishment to the head office of the enterprise or any of its other offices, by way of royalties,
fees or other similar payments in return for the use of patents or other rights, or by way of
commission, for specific services performed or for management, or, except in the case of a banking
enterprise, by way of interest on money 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 patent 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 of any of its other offices. -
In the absence of appropriate accounting or other data permitting the determination of the profits to
be attributed to a permanent establishment, the tax may be assessed in the Contracting State in which
the permanent establishment is situated in accordance with the laws of that State, in particular
regard being had to the normal profits of similar enterprises engaged in the same or similar
conditions, provided that, on the basis of the available information, the determination of the profits
of the permanent establishment is consistent with the principles stated in this Article. -
No profits shall be attributed to a permanent establishment by reason of the mere purchase by that
permanent establishment of goods or merchandise for the enterprise. -
For the purposes of the preceding paragraphs, the profits to be attributed to the permanent
establishment shall be determined by the same method year by year unless there is good and sufficient
reason to the contrary. -
Where profits include items of income which are dealt with separately in other Articles of this
Convention, then the provisions of those Articles shall not be effected by the provisions of this
Article.
Article 8
SHIPPING AND AIR TRANSPORT
-
Profits from the operation of ships or aircraft in international traffic shall be taxable only in the
Contracting State in which the enterprise operating the ships or aircraft is resident. -
The provisions of paragraph 1 shall also apply to profits derived from the participation in a pool, a
joint business or in an international operating agency. -
The provisions of paragraphs 1 and 2 shall apply to profits derived by the joint Norwegian, Danish and
Swedish air transport consortium Scandinavian Airlines System (SAS), but only in so far as profits
derived by Det Norske Luftfartsselskap A/S (DNL), the Norwegian partner of the Scandinavian Airlines
System (SAS), are in proportion to its share in that organization.
Article 9
ASSOCIATED ENTERPRISES
Where :
(a) |
an enterprise of a Contracting State participates directly or indirectly in the management, |
(b) |
the same persons participate directly or indirectly in the management, control or capital of an |
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 not so accrued, may be included in the profits of that enterprise and taxed accordingly. |
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, 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 15% of the gross amount of the
dividends.
The provisions of this paragraph shall not affect the taxation of the company in respect of the
profits out of which the dividends are paid. -
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. -
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. -
Where a company which is a resident of a Contracting State derives profits or income from the other
Contracting State, that other State may not impose any tax on the dividends paid by the company,
except insofar as such dividends are paid to a resident of that other State or insofar as the holding
in respect of which the dividends are paid is effectively connected with a permanent establishment or
a fixed base situated in that other State, nor subject the company’s undistributed profits to a tax on
the company’s undistributed profits, even if the dividends paid or the undistributed profits consist
wholly or partly of profits or income arising in such other State. -
Notwithstanding any other provisions of this Convention 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 15% of the amount of such profits after
deducting therefrom income tax and other taxes on income imposed thereon in that other State. . -
The provisions of paragraph 6 of this Article shall not affect the provisions contained in any
production sharing contracts and contracts of work (or any other similar contracts) relating to oil
and gas sector or other mining sector concluded on or before 31 December 1983, by the Government of
Indonesia, its instrumentality, its relevant state oil and gas company or any other entity thereof
with a person who is resident of Norway.
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 10% of the gross amount of the interest. -
Notwithstanding the provisions of paragraph 2, interest shall be exempt from tax in the Contracting
State in which it arises if:(a) the interest is beneficially owned by a Contracting State, a political subdivision or local
authority thereof or an instrumentality, subdivision or authority of a Contracting State which
is not subject to tax by that State;(b) the interest is beneficially owned by a resident of a Contracting State with respect to debt
obligations guaranteed by that State, a political subdivision or local authority thereof or an
instrumentality, subdivision or authority of such State which is not subject to tax by that
State. -
The term “interest” as used in this Article means income from debt-claims of every kind, whether or
not secured by a mortgage, and in particular, income from government securities and income from bonds
or debentures, including premiums and prizes attaching to such securities, bonds or debentures,
including interest on deferred payment 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 Article 14, as the case may be, shall apply.
-
Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a
political subdivision, a local authority or a resident of that State. Where, however, the person
paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting
State a permanent establishment or a fixed base in connection with which the indebtedness on which the
interest is paid was incurred, and such interest is borne by such permanent establishment or fixed
base, then such interest shall be deemed to arise in the State in which the permanent establishment or
fixed base is situated. -
Where, by reason of a special relationship between the payer and the beneficial owner or between both
of them and some other person, the amount of the interest, having regard to the debt-claim for which
it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner
in the absence of such relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to
the laws of each Contracting State, due regard being had to the other provisions of this
Convention.
Article 12
ROYALTIES
-
Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be
taxed in that other State. -
However, such royalties may be taxed in the Contracting State in which they arise, and according to
the laws of that State, but if the recipient is the beneficial owner of the royalties the tax so
charged shall not exceed:(a) 15% of the gross amount of royalties as defined in paragraph 3(a); and
(b) 10% of the gross amount of royalties as defined in paragraph 3(b).
-
The term “royalties” as used in this Article means payments of any kind received as a
consideration:(a) for the use of, or the right to use, any copyright of literary, artistic or scientific work
including cinemato graph films or films or tapes for radio or television broadcasting;
and(b) any patent, trade mark, design or model, plan, secret formula or process, and for the use of
or the right to use, industrial, commercial or scientific equipment or for information
concerning industrial, commercial or scientific experience. -
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 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. -
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 Convention.
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 movable property forming part of the business property of a permanent
establishment which an enterprise of a Contracting State has in the other Contracting State or of
movable property pertaining to a fixed base available to a resident of a Contracting State in the
other Contracting State for the purpose of performing independent personal services, including such
gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of
such fixed base, may be taxed in that other State. -
Gains derived by a resident of a Contracting State from the alienation of 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.With respect to gains derived by the Norwegian, Danish and Swedish air transport consortium
Scandinavian Airlines System (SAS), the provisions of this paragraph shall apply only to such
proportion of the gains as corresponds to the participation held in that consortium by Det Norske
Luftfartsselskap (DNL) the Norwegian partner of Scandinavian Airlines System (SAS). -
Gains from the alienation of shares in a company which is a resident of a Contracting State may be
taxed in that State, but only if the shares alienated form part of an interest of at least 30% in the
company. -
Gains from the alienation of any property other than those referred to in the preceding paragraphs
shall be taxable only in the Contracting State of which the alienator is a resident.
Article 14
INDEPENDENT PERSONAL SERVICES
-
Income derived by an individual who is 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 individual is present in the other State for a period or periods exceeding in the aggregate
90 days in any period of twelve months; or(b) the individual has a fixed base regularly available to him in that other State for the purpose
of performing his activities;but only so much thereof 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, 17, 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. -
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 firsts-mentioned State if:(a) the recipient is present in that other State for a period or periods not exceeding in the
aggregate 183 days in any period of twelve months; 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 that other State. -
Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an
employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a
Contracting State shall be taxable only in that State. -
Where a resident of Norway derives remuneration in respect of an employment exercised aboard an
aircraft operated in international traffic by the Scandinavian Airlines System (SAS) consortium, such
remuneration shall be taxable only in Norway.
Article 16
DIRECTORS’ FEES
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.
Article 17
ARTISTES AND ATHLETES
-
Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting
State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a
musician, or as an athlete, from his personal activities as such exercised in the other Contracting
State, may be taxed in that other State. -
Where income in respect of personal activities exercised by an entertainer or an athlete in his
capacity as such accrues not to the entertainer or athlete himself but to another person, that income
may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in
which the activities of the entertainer or athlete are exercised. -
Notwithstanding the provisions of paragraph 1 and 2, income derived from such activities are defined
in paragraph 1 performed under a cultural agreement concluded between the two Contracting States,
shall be taxable only in the State of which the entertainer or athlete is a resident.
Article 18
PENSIONS, ALIMONY, ANNUITIES, AND PAYMENTS UNDER A SOCIAL SECURITY SYSTEM
-
Pensions (including government pensions and payments under a social security system), alimony and
annuities paid to a resident of a Contracting State shall be taxable only in that State. However, such
pensions paid from sources within a Contracting State may be taxed in that 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 moneys worth. -
Notwithstanding the provisions of paragraph 1, any alimony or other maintenance payment paid by a
resident of one of the Contracting States to a resident of the other Contracting State, shall, to the
extent it is not allowable as a relief to the payer, be taxable only in the first-mentioned State.
Article 19
GOVERNMENT SERVICE
1. | (a) |
Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a |
|
(b) |
However, such remuneration shall be taxable only in the other Contracting State if the services |
||
(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. |
The provisions of Article 15 and 16 shall apply to remuneration other than pensions in respect of |
Article 20
STUDENTS
State a resident of the other Contracting State and who is present in the first-mentioned State solely for
the purpose of his education or training receives for the purpose of his maintenance, education or
training shall not be taxed in that State provided that such payments arise from sources outside that
State.
Article 21
OFFSHORE ACTIVITIES
-
The provisions of this Article have effect notwithstanding any other provision of this
Convention. -
A person who is a resident of a Contracting State and carries on activities offshore in the other
Contracting State in connection with the exploration or exploitation of the sea-bed and sub-soil and
their natural resources situated in that other State shall, subject to paragraphs 3 and 4 of this
Article, be deemed in relation to those activities to be carrying on business in that other State
through a permanent establishment or fixed base situated therein. -
The provisions of paragraph 2 shall not apply where the activities are carried on for a period not
exceeding 30 days in the aggregate in any twelve months’ period. However, for the purposes of this
paragraph:(a) activities carried on by an enterprise associated with another enterprise shall be regarded as
carried on by the enterprise with which it is associated if the activities in question are
substantially the same as those carried on by the last-mentioned enterprise;(b) two enterprises shall be deemed to be associated if one is controlled directly or indirectly
by the other, or both are controlled directly or indirectly by a third person or persons. -
Paragraph 2 of this Article shall not apply where a resident of a Contracting State carries on
transportation of supplies or personnel to a location, or between locations, where activities in
connection with the exploration or exploitation of the sea-bed and sub-soil and their natural
resources are being carried on in the other Contracting State, or operate tugboats and other vessels
auxiliary to such activities.
5. |
(a) |
Subject to sub-paragraph (b) of this paragraph, salaries, wages and similar remuneration derived |
(b) |
Sub-paragraph (a) of this paragraph shall not apply to salaries, wages and similar remuneration |
-
Gains derived by a resident of a Contracting State from the alienation of:
(a) exploration or exploitation rights, or
(b) property situated in the other Contracting State and used in connection with the exploration
or exploitation of the sea-bed and sub-soil and their natural resources situated in that other
State, or(c) shares deriving their value or the greater part of their value directly or indirectly from
such rights or such property or from such rights and such property taken together,may be taxed in that other State.In this paragraph “exploration and exploitation rights” means rights to assets to be produced
by the exploration or exploitation of the sea-bed and sub-soil and their natural resources in
the other Contracting State, including rights to interests in or to the benefit of such
assets.
Article 22
OTHER INCOME
-
Items of income of a resident of a Contracting State, wherever arising, not dealt with in the
foregoing Articles of this Convention shall be taxable only in that State. -
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. -
Notwithstanding the provisions of paragraphs 1 and 2, items of income of a resident of a Contracting
State not dealt with in the foregoing Articles of this Convention and arising in the other Contracting
State may also be taxed in that other State.
Article 23
CAPITAL
-
Capital represented by immovable property referred to in Article 6, owned by a resident of a
Contracting State and situated in the other Contracting State may be taxed in that other State. -
Capital represented by movable property forming part of the business property of a permanent
establishment which an enterprise of a Contracting State has in the other Contracting State, or by
movable property pertaining to a fixed base available to a resident of a Contracting State in the
other Contracting State for the purpose of performing independent personal services, may be taxed in
that other State. -
Capital represented by ships and aircraft operated in international traffic and by movable property
pertaining to the operation of such ships and aircraft shall be taxable only in the Contracting State
in which the operator is resident. -
All other elements of capital of a resident of a Contracting State shall be taxable only in that
State.
Article 24
ELIMINATION OF DOUBLE TAXATION
-
In Indonesia double taxation shall be avoided as follows:
(a) Indonesia, when imposing tax on residents of Indonesia, may include in the basis upon which
such tax is imposed the items of income which may be taxed in Norway in accordance with the
provisions of this Convention;(b) where a resident of Indonesia derives income from Norway and such income may be taxed in
Norway in accordance with the provisions of this Convention, the amount of Norwegian tax
payable in respect of the income shall be allowed as a credit against the Indonesian tax
imposed on that resident. The amount of credit, however, shall not exceed that part of the
Indonesian tax which is appropriate to such income. -
In Norway double taxation shall be avoided as follows:
(a) where a resident of Norway derives income or owns capital which, in accordance with the
provisions of this Convention, may be taxed in Indonesia, Norway shall, subject to the
provisions of sub-paragraph (b), exempt such income or capital from tax but may, in
calculating tax on the remaining income or capital of that person, apply the rate of tax which
would have been applicable if the exempted income or capital had not been so exempted;(b) where a resident of Norway derives items of income which, in accordance with the provisions of
Articles 10, 11, 12, paragraph 4 of Article 13 and Articles 16, 21 and 22 may be taxed in
Indonesia, Norway shall allow as a deduction from the tax on the income of that person an
amount equal to the tax paid in Indonesia. Such deduction shall not, however, exceed that part
of the tax, as computed before the deduction is given, which is appropriate to the income
derived from Indonesia;(c) for the purpose of sub-paragraph (b), when calculating the deduction from Norwegian tax, tax
paid in Indonesia shall be deemed to include the amount of Indonesian tax which would have
been payable if the Indonesian tax had not been exempted or reduced in accordance with the
provisions on special incentive measures under Indonesian Law No. 1 of 1967. This provision
shall cease to have effect after 31 December 1992.
Article 25
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 are or may be
subjected. -
The taxation on a permanent establishment which an enterprise of a Contracting State has in the other
Contracting State shall not be less favourably levied in that other State than the taxation levied on
enterprises of that other State carrying on the same activities. This provision shall not be construed
as obliging a Contracting State to grant to residents of the other Contracting State any personal
allowances, reliefs and reductions for taxation purposes on account of civil status or family
responsibilities which it grants to its own residents.
If a company of a Contracting State has a permanent establishment in the other Contracting State, that
other State may tax the permanent establishment at the rate applying to non-distributed profits of a
company resident of that other State. -
Except where the provisions of Article 9, paragraph 7 of Article 11 or paragraph 4 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. Similarly, any debts of an enterprise of a Contracting State to a resident of
the other Contracting State shall, for the purpose of determining the taxable capital of such
enterprise, be deductible under the same conditions as if they had been contracted to a resident of
the first-mentioned State. -
Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled,
directly or indirectly, by one or more residents of the other Contracting State, shall not be
subjected in the first-mentioned State to any taxation or any requirement connected therewith which is
other or more burdensome than the taxation and connected requirements to which other similar
enterprises of the first-mentioned State are or may be subjected. -
The provisions of this Article shall not be construed as obliging a Contracting State to grant to
nationals of the other Contracting State not being nationals of the first Contracting State any
exceptional tax relief accorded to repatriating nationals of this Contracting State. -
Nothing contained in this Article shall be construed as to prevent either Contracting State from
limiting to its nationals the enjoyment of tax incentives and any tax of a preferential nature
designed in pursuance of its programme of economic development. -
In this Article the term “taxation” means taxes which are the subject of this Convention.
Article 26
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 Convention, 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 26, to that of the Contracting State of which he is a national. The case must
be presented within three years from the receipt of the first notification of the action resulting in
taxation not in accordance with the provisions of the Convention. -
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 Convention. Any agreement reached shall be implemented notwithstanding any
time limits in the domestic law of the Contracting States. -
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 Convention. They may
also consult together for the elimination of double taxation in cases not provided for in the
Convention. -
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.
Article 27
EXCHANGE OF INFORMATION
-
The competent authorities of the Contracting States shall exchange such information as is necessary
for carrying out the provisions of this Convention and of the domestic laws of the Contracting States
concerning taxes covered by the Convention, insofar as the taxation thereunder is not contrary to the
Convention, 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 and
shall be disclosed only to persons or authorities (including courts and administrative bodies)
involved in the assessment or collection of, enforcement or prosecution in respect of, or the
determination of appeals in relation to, the taxes covered by the Convention. 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:(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 28
DIPLOMATIC AGENTS AND CONSULAR OFFICERS
Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or secular officers
under the general rules of international law or under the provisions of special agreements.
Article 29
ENTRY INTO FORCE
-
This Convention shall be ratified and the instruments of ratification shall be exchanged at olso as
soon as possible. -
The Convention shall enter into force upon the exchange of instruments of ratification and its
provisions shall have effect:(a) In Indonesia:
in respect of income derived on or after 1 January of the year next following that of the
entry into force of the Convention.(b) In Norway:
in respect of taxes on income or on capital relating to the calendar year (including
accounting periods beginning in any such year) next following that in which the Convention
enters into force.
Article 30
TERMINATION
Contracting State may terminate the Convention, through the diplomatic channel, by giving notice of
termination at least six months after the expiration of the fifth year after the year in which this
Convention enters into force. In such event, the Convention shall cease to have effect:
-
in Indonesia:
in respect of income derived on or after 1 January of the year next following, that in which the
notice of termination is given; -
in Norway:
in respect of taxes on income or on capital relating to the calendar year (including accounting
periods beginning in such year) next following that in which the notice is given.
this Convention.
Done in duplicate at Jakarta on the 19th day of July 1988, in the English language.
FOR THE GOVERNMENT OF |
FOR THE GOVERNMENT OF |
PROTOCOL
avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on
capital, the undersigned have agreed that the following provisions shall form an integral part of the said
Convention:
-
To Articles 7, 11 and 12
The provisions of sub-paragraphs (b) and (c) of paragraph 1 of Article 7, paragraph 5 of Article 11
and paragraph 4 of Article 12 shall not apply if the enterprise proves that such sales or activities
could not have been reasonably undertaken by the permanent establishment. -
To Article II paragraph 3.
It is understood that the term “interest” includes commitment fees and guarantee fees. -
To Article 15
Paragraph 2 of Article 15 shall not apply to remuneration derived by a resident of a Contracting
State, in this paragraph called “the employee”, and paid by or on behalf of an employer who is
resident of that State in respect of an employment exercised in the other Contracting State where:(a) the employee renders services in the course of that employment to a person other than the
employer who, directly or indirectly, supervises, directs or controls the manner in which
those services are performed; and(b) the employer is not responsible for carrying out the purposes for which the services are
performed. -
To Article 26
Paragraph 3 of Article 26 shall not prohibit a Contracting State to apply regulations determining the
debt to equity ratio of enterprises resident of that State, for the purpose of determining the
deductibility of the interest paid by those enterprises.
this Protocol.
FOR THE GOVERNMENT OF |
FOR THE GOVERNMENT OF |