AGREEMENT
BETWEEN
THE INDONESIAN ECONOMIC AND TRADE OFICE TO TAIPEI
AND
THE TAIPEI ECONOMIC AND TRADE OFFICE
FOR
THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
Article
1
PERSONAL SCOPE
This Agreement shall apply to
persons
who are residents of one or both of the countries of the contracting
parties.
Article
2
TAXES COVERED
-
The existing taxes to which the
Agreement shall apply are:(a) in the country represented by
the Taipei Economic and Trade Office:the profit seeking enterprise
income tax and the individual consolidated income tax;(b) in the country represented by
the Indonesian Economic and Trade Office to Taipei;the income tax imposed under
the Undang-undang Pajak Penghasilan 1984 (Law No. 7 of 1983 as amended). -
The Agreement shall also apply
to
any identical or substantially similar taxes which are imposed after
the date of signature of the Agreement in addition to, or in place of,
the existing taxes. At the end of each year, the competent authorities
of the countries of the Contracting Parties shall notify each other of
significant changes which have been made in their respective taxation
laws.
Article
3
GENERAL DEFINITIONS
-
For the purpose of this
Agreement,
unless the context otherwise requires:(a) (i) the term “the country
represented by the Taipei Economic and Trade Office” comprises the
territory of the said country and the territorial sea thereof as well
as any area outside the territorial sea over which the said country has
sovereignty, sovereign rights or jurisdiction in accordance with
international law;(ii) the term “the country
represented by the Indonesian Economic and Trade Office to Taipei”
comprises the territory of the said country and the adjacent areas over
which the said country has sovereignty, sovereign rights or
jurisdiction in accordance with international law;(b) the term “person” includes an
individual, a company and any other body of persons;(c) the term “company” means any
body corporate or any entity which is treated as a body corporate for
the tax purposes;(d) the terms “enterprise of the
country of a Contracting Party” and “enterprise of the country of the
other Contracting Party” mean respectively an enterprise carried on by
a resident of the country of a Contracting Party and an enterprise
carried on by a resident of the country of the other Contracting Party;(e) the term “international
traffic” means any transport by a ship or aircraft operated by an
enterprise of the country of a Contracting Party, except when the ship
or aircraft is operated solely between places in the country of the
other Contracting Party;(f) the term “competent
authority” means:(i) in the country represented by
the Taipei Economic and Trade Office: the Director General, Department
of Taxation, Ministry of Finance or his authorised representative;(ii) in the country represented by
the Indonesian Economic and Trade Office to Taipei: the Director
General of Taxation, Ministry of Finance or his authorised
representative;(g) the term “national” means:
(i) any individual possessing the
nationality of the country of a Contracting Party;(ii) any legal person, partnership
and association deriving its status as such from the laws in force in
the country of a Contracting Party;(h) the terms “the country of a
Contracting Party” and “the country of the other Contracting Party”
mean the country represented by the Taipei Economic and Trade Office
and the country represented by the Indonesian Economic and Trade Office
to Taipei as the context required. -
As regards the application of
this
Agreement, any term not defined therein shall, unless the context
otherwise requires, have the meaning which it has under the laws of the
country to which the Agreement applies.
Article
4
RESIDENT
-
For the purposes of this
Agreement,
the term “resident of the country of a Contracting Party” means any
person who, under the laws of that country, is liable to tax therein by
reason of his domicile, residence, place of management, place of
incorporation or any other criterion of a similar nature. -
Where by reason of the
provisions
of paragraph 1 an individual is a resident of both countries of the
Contracting Parties, then his status shall be determined as follows:(a) he shall be deemed to be a
resident of the country in which he has a permanent home available to
him; if he has a permanent home available to him in both countries, he
shall be deemed to be a resident of the country with which his personal
and economic relations are closer (centre of vital interests);(b) if the country 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 country, he shall be
deemed to be a resident of the country in which he has an habitual
abode;(c) if he has an habitual abode
in both countries or in neither of them, the competent authorities of
both countries 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
countries of the Contracting Parties, then it shall be deemed to be a
resident of the country in which its place of incorporation is situated.
Article
5
PERMANENT ESTABLISHMENT
-
For the purposes of this
Agreement,
the term “permanent establishment” means a fixed place of business
through which the business of an enterprise 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;(f) a
farm or
plantation;(g) 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 or project
or activities continue in one of the countries of the Contracting
Parties for a period of more than 6 months;(b) the furnishing of services,
including consultancy services by an enterprise through employees or
other personnel engaged by the enterprise for such purpose, but only
where activities of that nature continue (for the same or a connected
project) within the country for a period or periods aggregating more
than 120 days within any twelve month period. -
Notwithstanding the preceding
provisions of this Article, the term “permanent establishment” shall be
deemed not to include:(a) the use of the facilities
solely for the purpose of storage or display of goods or merchandise
belonging to the enterprise;(b) the maintenance of a stock
of goods or merchandise belonging to the enterprise solely for the
purpose of storage or display;(c) the maintenance of a stock of
goods or merchandise belonging to the enterprise solely for the purpose
of processing by another enterprise;(d) the maintenance of a fixed
place of business solely for the purpose of purchasing goods or
merchandise or of collecting information, for the enterprise;(e) the maintenance of a fixed
place of business solely for the purpose of advertising or for the
supply of information-,(f) the maintenance of a fixed
place of business solely for the purpose of carrying on, for the
enterprise, any other activity of a preparatory or auxiliary character;(g) the maintenance of a fixed
place of business solely for any combination of activities mentioned in
sub-paragraphs (a) to (f), provided that the overall activity of the
fixed place of business resulting from this combination is of a
preparatory or auxiliary character. -
Notwithstanding the provisions
of
paragraphs 1 and 2, where a person – other than an agent of an
independent status to whom paragraph 6 applies – is acting in the
country of a Contracting Party on behalf of an enterprise of the
country of the other Contracting Party, that enterprise shall be deemed
to have a permanent establishment in the first-mentioned country in
respect of any activities which that person undertakes for the
enterprise, if such a person:(a) has and habitually exercises
in that country 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 country a stock of goods
or merchandise from which he regularly delivers goods or merchandise on
behalf of the enterprise. -
An enterprise of the country of
a
Contracting Party shall not be deemed to have a permanent establishment
in the country of the other Contracting Party merely because it carries
on business in that other country 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. -
The fact that a company which
is a
resident of the country of a Contracting Party controls or is
controlled by a company which is a resident of the country of the other
Contracting Party, or which carries on business in that other country
(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
the
country of a Contracting Party from immovable property (including
income from agriculture or forestry) situated in the country of the
other Contracting Party may be taxed in that other country. -
The term “immovable property”
shall
have the meaning which it has under the law of the country of the
Contracting Party in which the property in question is situated. The
term shall in any case include property accessory to immovable
property, livestock and equipment used in agriculture and forestry,
rights to which the provisions of general law respecting landed
property apply, usufruct of immovable property and rights to variable
or fixed payments as consideration for the working of, or the right to
work, mineral deposits, sources and other natural resources; ships,
boats and aircraft shall not be regarded as immovable property. -
The provisions of paragraph 1
shall
also 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
the
country of a Contracting Party
shall be taxable only in that country unless the enterprise carries on
business in the country of the other Contracting Party 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 country but only so much of them as is attributable to (a)
that permanent establishment; (b) sales in that other country
of goods or merchandise of the same or similar kind as those sold
through that permanent establishment provided that the permanent
establishment has contributed in any manner in those sales. -
Subject to the provisions of
paragraph 3, where an enterprise of the country of a Contracting Party
carries on business in the country of the other Contracting Party
through a permanent establishment situated therein, there shall in each
country 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 country in which the permanent
establishment is situated or elsewhere. -
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 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. -
Where profits include items of
income which are dealt with separately in other Articles of this
Agreement, then the provisions of those Articles shall not be affected
by the provisions of this Article.
Article
8
SHIPPING AND AIR TRANSPORT
-
Profits of an enterprise of the
country of a Contracting Party from the operation of ships or aircraft
in international traffic shall be taxable only in that country. -
The provisions of paragraph 1
shall
also apply to profits from the participation in a pool, a joint
business or an international operating agency. -
Profits mentioned in this
Article
include all profits derived from the operation of ships and aircraft in
international traffic, including profits from the rental of ships or
aircraft on a full (time or voyage) basis and profits from the rental
of containers and related equipment which is incidental to the
operation of ships and aircraft in international traffic.
Article
9
ASSOCIATED ENTERPRISES
-
Where
(a) an enterprise of the country
of a Contracting Party participates directly or indirectly in the
management, control or capital of an enterprise of the country of the
other Contracting Party; or(b) the same persons participate
directly or indirectly in the management, control or capital of an
enterprise of the country of a Contracting Party and an enterprise of
the country of the other Contracting Party;and in either case conditions
are made or imposed between the two enterprises in their commercial or
financial relations which differ from those which would be made between
independent enterprises, then any profits which would, but for those
conditions, have accrued to one of the enterprises, but, by reason of
those conditions, have not so accrued, may be included in the profits
of that enterprise and taxed accordingly. -
Where the country of a
Contracting
Party includes in the profits of an enterprise of that country – and
taxes accordingly – profits on which an enterprise of the country of
the other Contracting Party has been charged to tax in that other
country and the profits so included are profits which would have
accrued to the enterprise of the first-mentioned country if the
conditions made between the two enterprises had been those which would
have been made between independent enterprises, then that other country
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 countries of the Contracting Parties shall
if necessary consult each other.
Article
10
DIVIDENDS
-
Dividends paid by a company
which
is a resident of the country of a Contracting Party to a resident of
the country of the other Contracting Party may be taxed in that other
country. -
However, such dividends may also
be
taxed in the country of the Contracting Party of which the company
paying the dividends is a resident and according to the laws of that
country, but if the recipient is the beneficial owner of the dividends
the tax so charged shall not exceed 10% of the gross amount of the
dividends. 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 country 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 the country of a Contracting Party, carries on business in
the country of the other Contracting Party of which the company paying
the dividends is a resident, through a permanent establishment situated
therein, or performs in that other country 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 the country of a Contracting Party derives profits or income from
the country of the other Contracting Party, that other country 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 country 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 country, nor subject the company’s undistributed
profits to a tax on the company’s undistributed profits, even if the
dividend paid or the undistributed profits consist wholly or partly of
profits or income arising in such other country. -
Notwithstanding any other
provisions of this Agreement where a company which is a resident of the
country of a Contracting Party has a permanent establishment in the
country of the other Contracting Party, the profits of the permanent
establishment may be subjected to an additional tax in that other
country in accordance with its law, but the additional tax so charged
shall not exceed 5% of the amount of such profits after deducting
therefrom income tax and other taxes on income imposed thereon in that
other country. -
The rate of tax in paragraph 6
of
this Article shall not affect the provisions contained in any
production sharing contracts or any other similar contracts relating to
oil and gas sector or other mining sector concluded by the country of a
Contracting Party, its instrumentality, its relevant state oil and gas
company or any other entity thereof with a person who is a resident of
the country of the other Contracting Party.
Article
11
INTEREST
-
Interest arising in the country
of
a Contracting Party and paid to a resident of the country of the other
Contracting Party may be taxed in that other country. -
However, such interest may also
be
taxed in the country of the Contracting Party in which it arises and
according to the laws of that country, 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 arising in the country of a Contracting Party and
derived by the authority of the country of the other Contracting Party
including local authorities thereof, a political subdivision, the
Central Bank or any financial institution controlled by that authority,
the capital of which is wholly owned by the authority of the country of
the other Contracting Party, as may be agreed upon from time to time
between the competent authorities of the countries of the Contracting
Parties, shall be exempt from tax in the first-mentioned country. -
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. 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 the country of a Contracting Party, carries on business in
the country of the other Contracting Party in which the interest
arises, through a permanent establishment situated therein, or performs
in that other country 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. -
Interest shall be deemed to
arise
in the country of a Contracting Party when the payer is the authority
of the country of that Contracting Party itself, a local authority or a
resident of that country. Where, however, the person paying the
interest, whether he is a resident of the country of a Contracting
Party or not, has in the country of a Contracting Party 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 country 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 the
country of each Contracting Party, due regard being had to the other
provisions of this Agreement.
Article
12
ROYALTIES
-
Royalties arising in the country
of
a Contracting Party and paid to a resident of the country of the other
Contracting Party may be taxed in that other country. -
However, such royalties may also
be
taxed in the country of the Contracting Party in which they arise and
according to the laws of that country, but if the recipient is the
beneficial owner of the royalties, the tax so charged shall not exceed
10% of the gross amount of the royalties. -
The term “royalties” as used in
this Article means payments of any kind received as a consideration for
the use of, or the right to use, any copyright of literary, artistic or
scientific work including cinematograph films or films or tapes used
for radio or television broadcasting, any patent, trade mark, design or
model, plan, secret formula or process, or for the use of, or the right
to use, industrial, commercial or scientific equipment, or for
information concerning industrial, commercial or scientific experience. -
The provisions of paragraphs 1
and
2 shall not apply if the beneficial owner of the royalties, being a
resident of the country of a Contracting Party, carries on business in
the country of the other Contracting Party in which the royalties
arise, through a permanent establishment situated therein, or performs
in that other country 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. -
Royalties shall be deemed to
arise
in the country of a Contracting Party when the payer is the authority
of the country of that Contracting Party itself, a local authority or a
resident of that country. Where, however, the person paying the
royalties, whether he is a resident of the country of a Contracting
Party or not, has in the country of a Contracting Party 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 country 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 payments shall remain
taxable according to the laws of each country of the Contracting Party,
due regard being had to the other provisions of this Agreement.
Article
13
CAPITAL GAINS
-
Gains derived by a resident of
the
country of a Contracting Party from the alienation of immovable
property referred to in Article 6 and situated in the country of the
other Contracting Party may be taxed in that other country. -
Gains from the alienation of
movable property forming part of the business property of a permanent
establishment which an enterprise of the country of a Contracting Party
has in the country of the other Contracting Party or of movable
property pertaining to a fixed base available to a resident of the
country of a Contracting Party in the country of the other Contracting
Party 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 country. -
Gains derived by an enterprise
of
the country of a Contracting Party
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 country. -
Gains from the alienation of any
property other than that referred to in the preceding paragraphs shall
be taxable only in the country of the Contracting Party of which the
alienator is a resident.
Article
14
INDEPENDENT PERSONAL SERVICES
-
Income derived by a resident of
the
country of a Contracting Party in respect of professional services or
other activities of an independent character shall be taxable only in
that country unless he has a fixed base regularly available to him in
the country of the other Contracting Party for the purpose of
performing his activities or he is present in that other country for a
period or periods exceeding in the aggregate 120 days in the taxable
year concerned. If he has such a fixed base or remains in that other
country for the aforesaid period or periods, the income may be taxed in
that other country but only so much of it as is attributable to that
fixed base or is derived in that other country during the aforesaid
period or periods. -
The term “professional services”
includes especially independent scientific, literary, artistic,
educational or teaching activities as well as the independent
activities of physicians, engineers, lawyers, dentists, architects and
accountants.
Article
15
DEPENDENT PERSONAL SERVICES
-
Subject to the provisions of
Articles 16, 18, 19 and 20, salaries, wages and other similar
remuneration derived by a resident of the country of a Contracting
Party in respect of an employment shall be taxable only in that country
unless the employment is exercised in the country of the other
Contracting Party. If the employment is so exercised, such remuneration
as is derived therefrom may be taxed in that other country -
Notwithstanding the provisions
of
paragraph 1, remuneration derived by a resident of the country of a
Contracting Party in respect of an employment exercised in the country
of the other Contracting Party shall be taxable only in the
first-mentioned country if:(a) the recipient is present in
the other country for a period or periods not exceeding in the
aggregate 183 days in the taxable year concerned; and(b) the remuneration is paid by,
or on behalf of, an employer who is not a resident of the other
country; and(c) the remuneration is not borne
by a permanent establishment or a fixed base which the employer has in
the other country. -
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 the country of a Contracting
Party shall be taxable only in that country.
Article
16
DIRECTORS FEES
-
Directors’ fees and other
similar
payments derived by a resident of the country of a Contracting Party in
his capacity as a member of the board of directors or any other similar
organ of a company which is a resident of the country of the other
Contracting Party may be taxed in that other country. -
The remuneration which a person
to
whom paragraph 1 applies derives from the company in respect of the
discharge of day-to-day functions of a managerial or technical nature
may be taxed in accordance with the provisions of Article 15.
Article
17
ARTISTES AND ATHLETES
-
Notwithstanding the provisions
of
Articles 14 and 15, income derived by a resident of the country of a
Contracting Party 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 country of the other
Contracting Party, may be taxed in that other country. -
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 country of the Contracting Party in which
the activities of the entertainer or athlete are exercised. -
Notwithstanding the provisions
of
paragraphs 1 and 2, income derived from activities referred to in
paragraph 1 performed under a cultural agreement or arrangement between
both authorities of the countries of the Contracting Parties shall be
exempt from tax in the country of the Contracting Party in which the
activities are exercised if the visit to that country is wholly or
substantially supported by funds of one or both countries of the
Contracting Parties, a local authority or public institution thereof.
Article
18
PENSIONS AND ANNUITIES
-
Subject to the provisions of
paragraph 2 of Article 19, any pension and other similar remuneration
paid to a resident of the country of one of the Contracting Parties
from a source in the country of the other Contracting Party in
consideration of past employment or services in the country of that
other Contracting Party and any annuity paid to such a resident from
such a source may be taxed in that other country. -
The term “annuity” as used in
this
Article 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 consideration of money paid.
Article
19
GOVERNMENT SERVICE
| 1. | (a) |
Remuneration, other than a |
|
| (b) |
However, such remuneration shall |
||
| (i) |
is a national of that country; or |
||
| (ii) |
did not become a resident of |
||
| 2. | (a) |
Any pension paid by, or out of |
|
| (b) | However, such pension shall be taxable only in the country of the other Contracting Party if the individual is a resident of, and a national of, that other country. |
||
| 3. |
The provisions of Articles 15, 16 |
||
Article
20
TEACHERS, RESEARCHERS AND STUDENTS
-
An individual who visits the
country of a Contracting Party at the invitation of that country or of
a university, college, school, museum or other cultural institution of
that country or under an official program of cultural exchange for a
period not exceeding two years solely for the purpose of teaching,
giving lectures or carrying out research at such institution and who
is, or was immediately before that visit, a resident of the country of
the other Contracting Party shall be exempt from tax in the first-
mentioned country on his remuneration for such activity, provided that
such remuneration is derived by him from outside that country -
Payments which a student,
apprentice or business trainee who is or was immediately before
visiting the country of a Contracting Party, a resident of the country
of the other Contracting Party and who is present in the
first-mentioned country solely for the purpose of his full-time
education or training receives for the purpose of his maintenance,
education or training shall not be taxed in that first-mentioned
country, provided that such payments arise from sources outside that
first-mentioned country.
Article
21
OTHER INCOME
Items of income of a resident of the
country of a Contracting Party, wherever arising, not dealt with in the
foregoing Articles of this Agreement shall be taxable only in that
country.
Article
22
ELIMINATION OF DOUBLE TAXATION
Where a resident of the country of a
Contracting Party derives income from the country of the other
Contracting Party, the amount of tax on that income payable in that
other country in accordance with the provisions of this Agreement, may
be credited against the tax levied in the first-mentioned country
imposed on that resident. The amount of credit, however, shall not
exceed the amount of the tax on the first-mentioned country on that
income computed in accordance with its taxation laws and regulations.
Article
23
NON-DISCRIMINATION
-
Nationals of the country of a
Contracting Party shall not be subjected in the country of the other
Contracting Party 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 country in the
same circumstances are or may be subjected. -
The taxation on a permanent
establishment which an enterprise of the country of a Contracting Party
has in the country of the other Contracting Party shall not be less
favourably levied in that other country than the taxation levied on
enterprises of that other country carrying on the same activities. This
provision shall not be construed as obliging the country of a
Contracting Party to grant to residents of the country of the other
Contracting Party any personal allowances, reliefs and reductions for
taxation purposes on account of civil status or family responsibilities
which it grants to its own residents. -
Except where the provisions of
paragraph 1 of Article 9, paragraph 7 of Article 11, or paragraph 6 of
Article 12 apply, interest, royalties and other disbursements paid by
an enterprise of the country of a Contracting Party to a resident of
the country of the other Contracting Party 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 country. -
Enterprises of the country of a
Contracting Party, the capital of which is wholly or partly owned or
controlled, directly or indirectly, by one or more residents of the
country of the other Contracting Party, shall not be subjected in the
first-mentioned country 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 country are or may be subjected. -
In this Article the term
“taxation”
means taxes which are the subject of this Agreement.
Article
24
MUTUAL AGREEMENT PROCEDURE
-
Where a person considers that
the
actions of one or both of the authorities of the countries of the
Contracting Parties 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 countries,
present his case to the competent authority of the country of which he
is a resident. The case must be presented within three years from the
first notification of the action resulting in taxation not in
accordance with the provisions of the Agreement. -
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 country of
the other Contracting Party, with a view to the avoidance of taxation
which is not in accordance with the Agreement. -
The competent authorities of the
countries of the Contracting Parties shall endeavour to resolve by
mutual agreement any difficulties or doubts arising as to the
interpretation or application of the Agreement. They may also consult
together for the elimination of double taxation in cases not provided
for in the Agreement. -
The competent authorities of the
countries of the Contracting Parties may communicate with each other
directly for the purpose of reaching an agreement in the sense of the
preceding paragraphs. The competent authorities, through consultations,
shall develop appropriate bilateral procedures, conditions, methods and
techniques for the implementation of the mutual agreement procedure
provided for in this Article.
Article
25
EXCHANGE OF INFORMATION
-
The competent authorities of the
countries of the Contracting Parties shall exchange such information as
is necessary for carrying out the provisions of this Agreement or of
the domestic laws of the countries of the Contracting Parties
concerning taxes covered by the Agreement, insofar as the taxation
thereunder is not contrary to the Agreement, in particular for the
prevention of fraud or evasion of such taxes. Any information received
by the competent authority of the country of a Contracting Party shall
be treated as secret, in the same manner as information obtained under
the domestic laws of that country. However, if the information is
originally regarded as secret in the transmitting country it shall be
disclosed only to persons or authorities (including courts and
administrative bodies) involved in the assessment or collection of, the
enforcement or prosecution in respect of, or the determination of
appeals in relation to, the taxes which are the subject of the
Agreement. Such persons or authorities shall use the information only
for such purposes but 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 the competent authority of
the country of a Contracting Party the obligation:(a) to carry out administrative
measures at variance with the laws and administrative practice of that
or of the other country;(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 country;(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
26
ENTRY INTO FORCE
-
This Agreement shall enter into
force on the later of the dates on which the respective Contracting
Parties may notify each other in writing that the formalities required
in their respective countries have been complied with. -
This Agreement shall have
effect:(a) in respect of taxes withheld
at source, for amounts paid or credited on or after the first day of
the second month following the date on which the Agreement enters into
force; and(b) in respect of other taxes on
income, for taxable years beginning on or after 1 January in the year
next following that in which the Agreement enters into force.
Article
27
TERMINATION
This Agreement shall remain in force
until terminated by a Contracting Party. Either Contracting Party may
terminate the Agreement, by giving written notice of termination on or
before the thirtieth day of June of any calendar year following after
the period of five years from the year in which the Agreement enters
into force.
In such case, the Agreement shall
cease
to have effect:
| (a) |
in respect of taxes withheld at |
| (b) |
in respect of other taxes on |
signed this Agreement.
Done in duplicate at Taipei on this 1st day of March 1995 in the
Chinese, Indonesian and English languages, the three texts being
equally authentic. In case of any divergency of interpretation, the
English text shall prevail.
|
FOR THE INDONESIAN |
FOR THE TAIPEI ECONOMIC |