South Korea

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

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

Article 1
PERSONAL SCOPE

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

Article 2
TAXES COVERED

1. This Agreement shall apply to
   taxes on income imposed on behalf of each Contracting State, 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 taxes which are the subject of this Agreement
   are:

   (a)	in Indonesia : the income tax (Pajak Penghasilan), and to the extent provided in such income tax,  the company tax (Pajak Perseroan), and  the tax on interest, dividends, and royalties (Pajak atas Bunga, Dividen dan Royalti); (hereinafter referred to as “Indonesian Tax”);
   (b)	in Korea:
   	(i)	the income tax;
   	(ii)	the cooperation tax;
   	(iii)	the inhabitant tax where charged by reference to the income tax or the corporation;
   	(hereinafter referred to as “Korean Tax”).

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

Article 3
GENERAL DEFINITIONS

1. In this Agreement, unless the
   context otherwise requires:

   (a)	(i)	the term “Indonesia” comprises the territory of the Republic of Indonesia as defined in its laws and parts of the continental shelf and adjacent seas, over which the Republic of Indonesia has sovereignty, sovereign rights or other rights in accordance with international law;
   	(ii)	the term “Korea” comprises the territory of the Republic of Korea as defined in its laws and parts of the continental shelf and adjacent seas, over which the Republic of Korea has sovereignty, sovereign rights or other rights in accordance with international law;
   (b)	the terms “a Contracting State” and “the other Contracting State” mean Indonesia or Korea as the context requires;
   (c)	the term “tax” means Indonesian tax or Korean tax, as the context requires;
   (d)	the term “person” includes an individual, a company and any other body of persons which is treated as an entity for tax purposes;
   (e)	the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;
   (f)	the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean, respectively, an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
   (g)	the term “international traffic” means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
   (h)	the term “competent authority” means :
   	(i)	in Indonesia: the Minister of Finance or his authorized representative;
   	(ii)	in Korea: the Minister of Finance or his authorized representative;
   (i)	the term “national” means :
   	(a)	all individuals possessing the nationality of a Contracting State;
   	(b)	all legal persons, partnerships and associations deriving their status as such from the laws in force in a Contracting State.

    

2. As regards the application of this
   Agreement by a Contracting State, any term not defined in this Agreement shall, unless the context
   otherwise requires, have the meaning which it has under the laws of that Contracting State concerning
   the taxes to which this Agreement applies. 

Article 4
RESIDENT

1. For the purposes of this
   Agreement, the term “resident of a Contracting State” means any person who, under the laws of that
   Contracting State, is treated as a resident for tax purposes in that Contracting State. 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. 

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

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

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

Article 5
PERMANENT ESTABLISHMENT

1. For the purpose of this Agreement
   the term “permanent establishment” means a fixed place of business through which the business of an
   enterprise is wholly or partly carried on.

2. The term “permanent establishment”
   includes especially:

   (a)	a place of management;
   (b)	a branch;
   (c)	an office;
   (d)	a factory
   (e)	a workshop; and
   (f)	a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.

    

3. The term “permanent establishment”
   likewise encompasses:

   (a)	A building site or construction project or supervisory activities in connection therewith, where such site, project or activities continue for a period of more than six months;
   (b)	An assembly or installation project which exists for more than six months;
   (c)	The furnishing of services, including consultancy services, by an enterprise through employees or other persons 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 period of twelve months.

    

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 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 carrying on, for the enterprise, any other activity of a preparatory or auxiliary character.

    

5. Notwithstanding the provisions of
   paragraphs 1 and 2, where a person other than an agent of an independent status to whom paragraph 7
   applies is acting in a Contracting State on behalf of an enterprise of the other Contracting State,
   that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting
   State in respect of any activities which that person undertakes for the enterprise, if such a
   person: 

   (a)	has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph; 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.

    

6. An insurance enterprise of a
   Contracting State shall, except with regard to reinsurance, be deemed to have a permanent
   establishment in the other Contracting State if it collects premiums in that other Contracting State
   or insures risks situated therein through an employee or through a representative who is not an agent
   of an independent status within the meaning of paragraph 7. 

7. An enterprise of a Contracting
   State shall not be deemed to have a permanent establishment in the other Contracting State merely
   because it carries on business in that other Contracting 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.

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 Contracting State (whether through
   a permanent establishment or otherwise), shall not of itself constitute either company a permanent
   establishment of the other. 

Article 6
INCOME FROM IMMOVABLE PROPERTY

1. Income derived by a resident of a
   Contracting State from immovable property (including income from agriculture or forestry) situated in
   the other Contracting State may be taxed in that other State.

2. The term “immovable property”
   shall have the meaning which it has under the law of the Contracting State in which the property in
   question is situated. The term shall in any case include property accessory to immovable property,
   livestock and equipment used in agriculture and forestry, rights to which the provisions of general
   law respecting landed property apply, usufruct of immovable property and rights to variable or fixed
   payments as consideration for the working of, or the right to work, mineral deposits, sources and
   other natural resources; ships, boats and aircraft shall not be regarded as immovable property. 

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

4. The provisions of paragraphs 1 and
   3 shall 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 are attributable to that permanent establishment, or to the sale of goods or
   merchandise of the same kind as those sold, or to other business transactions of the same kind as
   those effected, through the permanent establishment. 

2. Subject to the provisions of
   paragraph 3 where an enterprise of a Contracting State carries on business in the other Contracting
   State through a permanent establishment situated therein, there shall in each Contracting State be
   attributed to that permanent establishment the profits which it might be expected to make if it were a
   distinct and separate enterprise engaged in the same or similar activities under the same or similar
   conditions and dealing wholly independently with the enterprise of which it is a permanent
   establishment. 

3. In determining the profits of a
   permanent establishment, there shall be allowed as deductions expenses which are incurred for the
   purposes of the business of the permanent establishment including executive and general administrative
   expenses so incurred, whether incurred in the State in which the permanent establishment is situated
   or elsewhere. However, no such deduction shall be allowed in respect of amounts, if any, paid
   (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head
   office of the enterprise or any of its other offices, by way of royalties, fees or other similar
   payments in return for the use of patents or other rights, or by way of commission, for specific
   services performed or for management, or, except in the case of a banking enterprise, by way of
   interest on moneys lent to the permanent establishment. 
   Likewise, no account shall be taken, in the determination of the profits of a permanent establishment,
   for amounts charged (otherwise than toward reimbursement of actual expenses), by the permanent
   establishment to the head office of the enterprise or any of its other offices, by way of royalties,
   fees or other similar payments in return for the use of patents or other rights, or by way of
   commission for specific services performed or for management, or, except in the case of a banking
   enterprise, by way of interest on moneys lent to the head office of the enterprise or any of its other
   offices.

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

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

6. 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. 

Article 8
SHIPPING AND AIR TRANSPORT

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

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

3. In respect of the operation of
   ships or aircraft in international traffic carried on by an enterprise of a Contracting State, that
   enterprise, if an enterprise of Indonesia, shall also be exempt from the value added tax in Korea and,
   if an enterprise of Korea, shall also be exempt from any tax similar to the value added tax in Korea
   which may hereafter be imposed in Indonesia. 

Article 9
ASSOCIATED ENTERPRISES

1. Where:
   

   (a)	an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or
   (b)	the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,
   and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

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

Article 10
DIVIDENDS

1. Dividends paid by a company which
   is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that
   other Contracting State.

2. However, such dividends may also
   be taxed in the Contracting State of which the company paying the dividends is a resident and
   according to the laws of that State, but if the recipient is the beneficial owner of the dividends the
   tax so charged shall not exceed:

   (a)	10% of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25% of the capital of the company paying the dividends;
   (b)	15% of the gross amount of the dividends in all other cases.
   This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

    

3. The term “dividends” as used in
   this Article means income from shares or other rights, not being debt-claims, participating in
   profits, as well as income from other corporate rights which is subjected to the same taxation
   treatment as income from shares by the taxation laws of the Contracting State of which the company
   making the distribution is a resident. 

4. The provisions of paragraphs 1 and
   2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State,
   carries on business in the other Contracting State of which the company paying the dividends is a
   resident, through a permanent establishment situated therein, or performs in that other Contracting
   State independent personal services from a fixed base situated therein, and the holding in respect of
   which the dividends are paid is effectively connected with such permanent establishment or fixed base.
   In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply. 

5. Where a company which is a
   resident of a Contracting State derives profits or income from the other Contracting State, that other
   Contracting 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 Contracting 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 Contracting 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 that other Contracting State. 

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

7. The provisions of paragraph 6 of
   this Article shall not affect the provisions contained in any production sharing contracts and
   contracts of work (or any other similar contracts) relating to the 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
   Korea. 

Article 11
INTEREST

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

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

3. Notwithstanding the provisions of
   paragraph 2, interest arising in a Contracting State and derived by the Government of the other
   Contracting State including political subdivisions and local authorities thereof, the Central Bank of
   that other Contracting State or any financial institution wholly owned by that Government, or by any
   resident of the other Contracting State with respect to debt-claims guaranteed or indirectly financed
   by the Government of that other Contracting State including political subdivisions and local
   authorities thereof, the Central Bank of that other Contracting State or any financial institution
   wholly owned by that Government shall be exempt from tax in the first-mentioned Contracting State.

4. For the purposes of paragraph 3,
   the term “the Central Bank” and “financial institution wholly owned by the “Government” mean:

   (a)	in the case of Korea :
   	(i)	the Bank of Korea;
   	(ii)	the Korea Export – Import Bank;
   	(iii)	the Korea Exchange Bank;
   	(iv)	such other financial institution, the capital of which is wholly owned by the Government of the Republic of Korea as may be agreed upon from time to time between the Governments of the two Contracting States.
   (b)	In the case of Indonesia:
   	(i)	the “Bank Indonesia” ,and
   	(ii)	such other financial institution the capital of which is wholly owned by the Government of the Republic of Indonesia as may be agreed upon from time to time between Government of the two Contracting States.

    

5. 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 by the
   taxation laws of the State in which the income arises. 

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

7. Interest shall be deemed to arise
   in a Contracting State when the payer is that Contracting State itself, a political subdivision or a
   local authority thereof, or a resident of that Contracting 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 Contracting State in which the permanent
   establishment or fixed base is situated.

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

Article 12
ROYALTIES

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 also
   be taxed in the Contracting State in which they arise and according to the laws of that State, but if
   the recipient is the beneficial owner of the royalties the tax so charged shall not exceed 15% of the
   gross amount of the royalties. 

3. The term “royalties” as used in
   this Article means payments of any kind received as a consideration for the use of, or the right to
   use, any copyright of literary, artistic or scientific work including cinematograph film, 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, commercial or scientific
   equipment, or for information concerning industrial, commercial or scientific experience. 

4. The provisions of paragraphs 1 and
   2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State,
   carries on business in the other Contracting State in which the royalties arise, through a permanent
   establishment situated therein, or performs in that other 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 obligation to pay the royalties was incurred, and such royalties are borne
   by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the
   State in which the permanent establishment or fixed base is situated.

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

Article 13
CAPITAL GAINS

1. Capital gains from the alienation
   of immovable property as defined in paragraph 2 of Article 6 may be taxed in the state in which such
   property is situated. 

2. Gains from the alienation of
   movable property forming part of the business property of a permanent establishment which an
   enterprise of a Contracting State has in the other Contracting State or of movable property pertaining
   to a fixed base available to a resident of a Contracting State in the other Contracting State for the
   purpose of performing independent personal services, including such gains from the alienation of such
   a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in
   that other State. 

3. Gains from the alienation of ships
   or aircraft operated in international traffic or movable property pertaining to the operation of such
   ships or aircraft shall be taxable only in the Contracting State of which the enterprise is a
   resident. 

4. Gains from the alienation of any
   property other than that referred to in paragraphs 1, 2 and 3, shall be taxable only in the
   Contracting State of which the alienator is a resident.

Article 14
INDEPENDENT PERSONAL SERVICE

1. 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 Contracting 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 Contracting State for a period or periods exceeding in the aggregate 90
   days in the calendar year concerned. If he has such a fixed base or remains in that other Contracting
   State for the aforesaid period or periods, the income may be taxed in that other Contracting State but
   only so much of it as is attributable to that fixed base or is derived in that other Contracting 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, dentists and
   accountants. 

Article 15
DEPENDENT PERSONAL SERVICE

1. Subject to the provisions of
   Articles 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 the fiscal year concerned; and
   (b)	the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
   (c)	the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

    

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

Article 16
DIRECTORS’ FEES

Article 17
ARTISTES AND ATHLETES

1. Notwithstanding the provisions of
   Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a
   theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his
   personal activities as such, may be taxed in the other Contracting State in which these activities of
   the entertainer or athlete are exercised. 
   Such income shall, however, be exempt from tax in that other Contracting State if such activities are
   exercised by an individual, being a resident of that Contracting State, pursuant to a special
   programme for cultural exchange agreed upon between he Governments of the two Contracting States.

2. Where income in respect of
   personal activities as such of an entertainer or athlete accrues not to that 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. 
   Such income shall, however, be exempt from tax in that Contracting State if such income is derived
   from the activities exercised by an individual, being a resident of the other Contracting State,
   pursuant to a special programme for cultural exchange agreed upon between the Government of the two
   Contracting States and accrues to another person who is a resident of that other Contracting State.

Article 18
PENSIONS

However, such pensions may also be
taxed in the other Contracting State if the payment is made by a resident of that State or a permanent
establishment situated therein.

Article 19
GOVERNMENT SERVICE

Article 20
TEACHERS

Article 21
STUDENTS

Article 22
INCOME NOT EXPRESSLY MENTIONED

1. Items of income of a resident of a
   Contracting State, wherever arising, not dealt with in the foregoing Articles of this Agreement shall
   be taxable only in that Contracting 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 Contracting 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
RELIEF FROM DOUBLE TAXATION

1. In the case of a resident of
   Korea, double taxation shall be avoided as follows:
   Subject to the provisions of Korean tax law regarding the allowance as a credit against Korean tax of
   tax payable in any country other than Korea (which shall not affect the general principle hereof), the
   Indonesian tax payable (excluding, in the case of a dividend, tax payable in respect of the profits
   out of which the dividend is paid) under the laws of Indonesia and in accordance with this Agreement,
   whether directly or by deduction, in respect of income from sources within Indonesia shall be allowed
   as a credit against Korean tax payable in respect of that income. The credit shall not, however,
   exceed that proportion of Korean tax which the income from sources within Indonesia bears to the
   entire income subject to Korean tax.

2. For the purpose of paragraph 1,
   the term “Indonesian tax payable” shall be deemed to include the amount of Indonesian tax which would
   have been payable in accordance with Indonesian tax laws but for the exemption or reduction on
   dividends of Indonesian tax in accordance with Indonesian laws relating to incentives for the
   promotion of economic development in Indonesia which were in force on the date of signature of this
   Agreement or any other provisions which may subsequently be introduced in Indonesia in modification
   of, or in addition to, those laws so far as they are agreed by the competent authorities of the
   Contracting State to be of a substantially similar character, provided that the amount of the tax
   referred to in this paragraph shall, however, be an amount of 10% of the gross amount of such
   dividends. 

3. In the case of 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 Korea in accordance with the provisions of this Agreement;
   (b)	Where a resident of Indonesia derives income from Korea and that income may be taxed in Korea in accordance with the provisions of this Agreement, the amount of Korean 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 the income.

    

4. For the purpose of paragraph 3,
   the term “Korean tax payable” shall be deemed to include the amount of Korean tax which would have
   been payable in accordance with Korean tax laws but for the exemption or reduction on dividends of
   Korean tax in accordance with the Korean laws relating to incentives for the promotion of economic
   development in Korea which were in force on the date of signature of this Agreement or any other
   provisions which may subsequently be introduced in Korea in modification of, or in addition to, those
   laws so far as they are agreed by the competent authorities of the Contracting State to be of a
   substantially similar character, provided that the amount of the tax referred to in this paragraph
   shall, however, be an amount of 10% of the gross amount of such dividends. 

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 Contracting State in the same circumstances are or may be subjected. 

2. The taxation on a permanent
   establishment which an enterprise of a Contracting State has in the other Contracting State shall not
   be less favourably levied in that other Contracting State than the taxation levied on enterprises of
   that other Contracting State carrying on the same activities. 

3. Enterprises of a Contracting
   State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or
   more residents of the other Contracting State shall not be subjected in the first-mentioned
   Contracting 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 Contracting State are or may be subjected. 

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

Article 25
MUTUAL AGREEMENT PROCEDURE

1. Where a person considers that the
   actions of one or both of the Contracting States result or will result for him in taxation not in
   accordance with the provisions of this Agreement, he may, irrespective of the remedies provided by the
   domestic law of those States, present his case to the competent authority of the Contracting State of
   which he is a resident or, if his case comes under paragraph 1 of Article 24, to that of the
   Contracting State of which he is a national. The case must be presented within 3 years from the first
   notification of the action resulting in taxation not in accordance with the provisions of the
   Agreement. 

2. The competent authority shall
   endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a
   satisfactory solution, to resolve the case by mutual agreement with the competent authority of the
   other Contracting State, with a view to the avoidance of taxation which is not in accordance with the
   Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic
   law of the Contracting States. 

3. The competent authorities of the
   Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising
   as to the interpretation or application of this Agreement. They may also consult together for the
   elimination of double taxation in cases not provided for in this Agreement. 

4. The competent authorities of the
   Contracting States may communicate with each other directly for the purpose of reaching an agreement
   in the sense of the preceding paragraphs. 

5. The competent authorities of the
   Contracting States may by mutual agreement settle the mode of application of this Agreement and,
   especially, the requirements to which the residents of a Contracting State shall be subjected in order
   to obtain, in the other Contracting State, tax reliefs or exemptions on income referred to in Articles
   10, 11 and 12, received from that other Contracting State. 

Article 26
EXCHANGE OF INFORMATION

1. The competent authorities of the
   Contracting States shall exchange such information as is necessary for carrying out the provisions of
   this Agreement or for the prevention of fraud or fiscal evasion or for the administration of statutory
   provisions against tax avoidance in relation to the taxes which are the subject of this
   Agreement. Any information so exchanged shall be treated as secret and shall not be disclosed to
   any persons or authorities other than those, including a court, concerned with the assessment and
   collection, the enforcement or prosecution in respect of those taxes or the determination of appeals
   in relation thereto and the persons with respect to whom the information relates.

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

   (a)	to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
   (b)	to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; or
   (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.

    

Article 27
MISCELLANEOUS RULES

Article 28
DIPLOMATIC AGENTS AND CONSULAR OFFICERS

Article 29
ENTRY INTO FORCE

1. This Agreement shall be ratified
   and the instruments of ratification shall be exchanged at Seoul as soon as possible. The Agreement
   shall enter into force upon the exchange of instruments of ratification.

2. This Agreement shall have effect:
   

   (i)	in respect of tax withheld at the source on amounts paid or credited on or after the first day of January of the calendar year next following that of the entry into force of the Agreement; and
   (ii)	in respect of other taxes for taxation years beginning on or after the first day of January of the calendar year next following that of the entry into force of the Agreement.

Article 30
TERMINATION

PROTOCOL

1. In respect of subparagraph (b) of
   paragraph 3 of Article 2 of the Agreement, it is understood that the Agreement shall apply to the
   Korean defense tax where charged by reference to the income tax or the corporation tax.

2. In respect of paragraph 5 of
   Article 11, it is understood that interest on deferred payment sales is included in the term interest
   if it is in accordance with the provisions in the domestic laws of a Contracting State.