Turkey

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

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

Article
1
PERSONAL SCOPE

This Agreement shall apply to
persons
who are residents of one or both of the Contracting State.

Article
2
TAXES COVERED

1. This Agreement shall apply to
   taxes
   on income imposed on behalf of a Contracting State or of its political
   subdivisions or local authorities, irrespective of the manner in which
   they are levied.

2. There shall be regarded as taxes
   on
   income all taxes imposed on total income, or on elements of income,
   including taxes on gains from the alienation of movable or immovable
   property [and] taxes on the total amounts of wages or salaries paid by
   enterprises.

3. The existing taxes to which the
   Agreement shall apply are in particular:

   (a)	in Turkey:
   	(i)	the income tax;
   	(ii)	the corporation tax;
   	(iii)	the levy imposed on the income tax and the corporation tax;
   	(hereinafter referred to as Turkish tax”).
   (b)	in Indonesia: the income tax imposed under the Undang-undang Pajak Ponghasilan 1984 (Law no. 7 of 1983 as amended) (hereinafter referred to as “Indonesian tax”).

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

Article
3
GENERAL DEFINITIONS

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

   (a)	(i)	the term “Turkey” means the Turkish territory, territorial sea, as well as the maritime areas over which it has jurisdiction or sovereign rights for the purpose of exploring, exploiting, conserving and managing natural resources, pursuant to international law;
   	(ii)	the term “Indonesia” comprises the territory of the Republic of Indonesia and the adjacent areas over which the Republic of Indonesia has sovereignty, sovereign rights or jurisdiction in accordance with international law;
   (b)	the terms “a Contracting State” and “the other Contracting State” mean Turkey or Indonesia as the context requires;
   (c)	the term “tax” means any tax covered by Article 2 of this Agreement;
   (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 term registered office means the place of incorporation under the laws of Indonesia or the legal head office registered under the Turkish Code of Commerce;
   (g)	the term “national” means:
   	(i)	any individual possessing the nationality of a Contracting State;
   	(ii)	any legal person, partnership and association deriving its status as such from the laws in force in a Contracting State;
   (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 Turkey, the Minister of Finance or his authorized representative, and
   	(ii)	in Indonesia, the Minister of Finance or his authorized representative;
   (j)	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.

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

Article
4
RESIDENT

1. For the purposes of this
   Agreement,
   the term “resident of a Contracting State” means any person who, under
   the laws of that State, is liable to tax therein by reason of his
   domicile, residence, registered office, legal head office, place of
   management or any other criterion of a similar nature.

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

   1. 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);

   2. 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;

   3. if he has an habitual abode
      in
      both States or in neither of them, he shall be deemed to be a resident
      of the States of which he is a national;

   4. if he is a national of both
      States or of neither of them, the competent authorities of the
      Contracting States shall settle the question by mutual agreement.

3. Where by reason of the
   provisions
   of paragraph 1 a person other than an individual is a resident of both
   Contracting States, then it shall be deemed to be a resident of the
   State in which it has been incorporated (registered).

Article
5
PERMANENT ESTABLISHMENT

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

2. The term “permanent
   establishment”
   includes especially:

   1. a place of management;

   2. a branch;

   3. an office;

   4. a factory;

   5. a workshop; and

   6. 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:

   1. a building site, a
      construction, assembly or installation project or supervisory
      activities in connection therewith but only where such site, project or
      activities continue in one of the Contracting States for a period of
      more than six months;

   2. 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 183 days within any twelve-month period.

4. Notwithstanding the preceding provisions of this
   Article,
   the term “permanent establishment” shall be deemed not to include:

   1. the use of facilities solely
      for the purpose of storage or display of goods or merchandise belonging
      to the enterprise;

   2. the maintenance of a stock
      of
      goods or merchandise belonging to the enterprise solely for the purpose
      of storage or display;

   3. the maintenance of a stock
      of
      goods or merchandise belonging to the enterprise solely for the purpose
      of processing by another enterprise;

   4. the maintenance of a fixed
      place of business solely for the purpose of purchasing goods or
      merchandise or of collecting information, for the enterprise;

   5. 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;

   6. the maintenance of a fixed
      place of business solely for any combination of activities mentioned in
      subparagraphs (a) to (e), provided that the overall activity of the
      fixed place of business resulting from this combination is of a
      preparatory or auxiliary character.

5. Notwithstanding the provisions
   of
   paragraphs 1 and 2, where a person — other than an agent of an
   independent status to whom paragraph 6 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:

   1. 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

   2. has no such authority, but
      habitually maintains in the first-mentioned State a stock of goods or
      merchandise from which he regularly delivers goods on behalf of the
      enterprise.

6. An enterprise shall not be
   deemed
   to have a permanent establishment in a Contracting State merely because
   it carries on business in that State through a broker, general
   commission agent or any other agent of an independent status, provided
   that such persons are acting in the ordinary course of their business.

7. 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
   of 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 (including the breeding and cultivation
   of fish) 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 also apply to the income from immovable property of an
   enterprise and to income from immovable property used for the
   performance of independent personal services

Article
7
BUSINESS PROFITS

1. The profits of an enterprise of
   a
   Contracting State shall be taxable only in that State unless the
   enterprise carries on business in the other Contracting State through a
   permanent establishment situated therein. If the enterprise carries on
   business as aforesaid, the profits of the enterprise may be taxed in
   the other State but only so much of them as is attributable to that
   permanent establishment.

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

3. In determining the profits of a
   permanent establishment, there shall be allowed as deductions expenses
   which are incurred for the purposes of the 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 will be allowed in respect of
   participations to the expenses and losses of the head office or other
   permanent establishments situated abroad and, likewise, the amounts
   paid by the permanent establishment to the head office of the
   enterprise [or] any of its other permanent establishments, by way of
   royalties, interests, commissions or other similar payments.

4. No profits shall be attributed
   to a
   permanent establishment by reason of the mere purchase by that
   permanent establishment of goods or merchandise for the enterprise.

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

Article
8
SHIPPING AND AIR TRANSPORT

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

2. For the purposes of this
   Article,
   profits derived by an enterprise of a Contracting State from the
   operation of ships or aircraft in international traffic shall include
   inter alia profits derived from the use or rental of containers, if
   such profits are incidental to the profits to which the provisions of
   paragraph 1 apply.

3. The provisions of paragraph 1 of
   this Article shall also apply to profits from the participation in a
   pool, a joint business or an international operating agency.

Article
9
ASSOCIATED ENTERPRISES

1. Where

   1. 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

   2. 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
   by the first-mentioned State claimed to be 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, where that other State considers the
   adjustment justified. 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 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:

   1. 10 per cent of the gross
      amount
      of the dividends if the beneficial owner is a company (excluding
      partnership) which holds directly at least 25 per cent of the capital
      of the company paying the dividends;

   2. 15 per cent of the gross
      amount
      of the dividends in all other cases.

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

4. Profits of a company of a
   Contracting State carrying on business in the other Contracting State
   through a permanent establishment situated therein may, after having
   been taxed under Article 7, be taxed on the remaining amount in the
   Contracting State in which the permanent establishment is situated and
   in accordance with paragraph 2 of this Article.

5. 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 in the
   case of a resident of Turkey, performs in Indonesia independent
   personal services from a fixed base situated in Indonesia, 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.

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 per cent of the gross
   amount of the interest. The competent authorities of the Contracting
   States shall by mutual agreement settle the mode of application of this
   limitation.

3. Notwithstanding the provisions
   of
   paragraph (2), interest arising in:

   (a)	Indonesia and paid to the Government of Turkey or to the Central Bank of Turkey (Turkiye Cumhuriyet Merkez Bankasy) or to the Turkish Eximbank (Turkiye Yhracat Kredi Bankasy A.S.) shall be exempt from Indonesian tax;
   (b)	Turkey and paid to the Government of Indonesia or to the Bank of Indonesia (Central Bank) shall be exempt from Turkish tax.

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

5. The provisions of paragraphs 1
   and
   2 shall not apply if the beneficial owner of the interest, being a
   resident of a Contracting State, carries on business in the other
   Contracting State in which the interest arises, through a permanent
   establishment situated therein, or in the case of a resident of Turkey,
   performs in Indonesia independent personal services from a fixed base
   situated in Indonesia, and the debt-claim in respect of which the
   interest is paid is effectively connected with such permanent
   establishment or fixed base. In such case the provisions of Article 7
   or Article 14, as the case may be, shall apply.

6. Interest shall be deemed to
   arise
   in a Contracting State when the payer is that State itself, a political
   subdivision, a local authority or a resident of that State. Where,
   however, the person paying the interest, whether he is a resident of a
   Contracting State or not, has in a Contracting State a permanent
   establishment or a fixed base in connection with which the indebtedness
   on which the interest is paid was incurred, and such interest is borne
   by such permanent establishment or fixed base, then such interest shall
   be deemed to arise in the State in which the permanent establishment or
   fixed base is situated.

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

Article
12
ROYALTIES

1. Royalties arising in a
   Contracting
   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 10 per cent of the gross
   amount of the royalties. The competent authorities of the Contracting
   States shall by mutual agreement settle the mode of application of this
   limitation.

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

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 in the case of a resident of Turkey
   performs in Indonesia independent personal services from a fixed base
   situated in Indonesia, 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 right or
   property giving rise to the royalties is effectively connected, and
   such royalties are borne by such permanent establishment or fixed base,
   then such royalties shall be deemed to arise in the State in which the
   permanent establishment or fixed base is situated.

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

Article
13
CAPITAL GAINS

1. Gains derived by a resident of a
   Contracting State from the alienation of immovable property referred to
   in Article 6 and situated in the other Contracting State may be taxed
   in that other State.

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

3. Gains 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.

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. However, the capital gains mentioned in the foregoing
   sentence and derived from the other Contracting State shall be taxable
   in the other Contracting State if the time period does not exceed one
   year between acquisition and alienation.

Article
14
INDEPENDENT PERSONAL SERVICES

1. Income derived by a resident of
   a
   Contracting State in respect of professional services or other
   activities of an independent character shall be taxable only in that
   State unless he has a fixed base regularly available to him in the
   other Contracting State for the purpose of performing his activities or
   he is present in that other State for a period or periods exceeding in
   the aggregate 183 days within any twelve-month period. If he has such a
   fixed base or remains in that other State for the aforesaid period or
   periods, the income may be taxed in that other State but only so much
   of it as is attributable to that fixed base or is derived in that other
   State during the aforesaid period or periods.

2. The term “professional services”
   includes especially independent scientific, literary, artistic,
   educational or teaching activities as well as the independent
   activities of physicians, lawyers, engineers, architects, dentists and
   accountants.

Article
15
DEPENDENT PERSONAL SERVICES

1. Subject to the provisions of
   Articles 16, 18, 19 and 20, 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 within any twelve month period; and
   (b)	the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
   (c)	the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

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

Article
16
DIRECTORS’ FEES

Article
17
ARTISTS AND SPORTSMEN

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 a sportsman, from his personal
   activities as such exercised in the other Contracting State, may be
   taxed in that other State.

2. Where income in respect of
   personal
   activities exercised by an entertainer or a sportsman in his capacity
   as such accrues not to the entertainer or sportsman himself but to
   another person, that income may, notwithstanding the provisions of
   Article 7, 14 and 15, be taxed in the Contracting State in which the
   activities of the entertainer or sportsman are exercised.

3. Income derived by an entertainer
   or
   a sportsman from activities exercised in a Contracting State shall be
   exempt from tax in that State if the visit to that State is supported
   wholly or mainly by public funds of the other Contracting State, a
   political subdivision or a local authority thereof.

Article
18
PENSIONS

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

2. Pensions and life annuities
   paid,
   and other periodical or occasional payments made by a Contracting
   State, or one of its political subdivisions in respect of insuring
   personal accidents, may be taxed in that State.

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

Article
19
GOVERNMENT SERVICE

Article
20
TEACHERS AND STUDENTS

1. Payments which a student or
   business apprentice who is a national of a Contracting State and who is
   present in the other Contracting 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 other State, provided
   that such payments arise from sources outside that other State.

2. Likewise, remuneration received
   by
   a teacher or by an instructor who is a national of a Contracting State
   and who is present in the other Contracting State [for] the primary
   purpose of teaching or engaging in scientific research for a period or
   periods not exceeding two consecutive years shall be exempt from tax in
   that other State on his remuneration from personal services for
   teaching or research, provided that such payments arise from sources
   outside that other State.

3. Remuneration which a student or
   a
   trainee who is a national of a Contracting State derives from an
   employment which he exercises in the other Contracting State for a
   period or periods not exceeding 183 days in a calendar year in order to
   obtain practical experience related to his education or formation shall
   not be taxed in that other State.

Article
21
OTHER INCOME

Article
22
ELIMINATION OF DOUBLE TAXATION

1. Double taxation for the
   residents
   of Indonesia shall be eliminated as follows :

   (a)	Where a resident of Turkey derives income which, exclusive of income covered by paragraph (b) hereafter, in accordance with the provisions of this Agreement, may be taxed in Indonesia, Turkey shall exempt such income from tax but may, in calculating tax on the remaining income of that person, apply the rate of tax which would have been applicable if the exempted income had not been so exempted.
   (b)	Where a resident of Turkey derives income which, in accordance with the provisions of Articles 10, 11, 12 and paragraph 4 of Article 13 of this Agreement, may be taxed in Indonesia, Turkey shall allow as a deduction from the tax on the income of that person, an amount equal to the tax paid in Indonesia.

   Such deductions shall not,
   however,
   exceed that part of the tax, as computed before the deduction is given,
   which is appropriate to the income [which] may be taxed in Indonesia.

2. Double taxation for the
   residents
   of Indonesia shall be eliminated as follows: Where a resident of
   Indonesia derives income from Turkey, the amount of tax on that income
   payable in Turkey, in accordance with the provisions of this Agreement,
   may be credited against the tax levied in Indonesia imposed on that
   resident. The amount of credit, however, shall not exceed the amount of
   the tax in Indonesia on that income computed in accordance with its
   taxation laws and regulations

Article
23
NON-DISCRIMINATION

1. Nationals of a Contracting State
   shall not be subjected in the other Contracting State to any taxation
   or any requirement connected therewith, which is other or more
   burdensome than the taxation and connected requirements to which
   nationals of that other State in the same circumstances, in particular
   with respect to residence, are or may be subjected

2. Subject to the provisions of
   paragraph 4 of Article 10, 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.

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 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.

4. These provisions 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.

Article
24
MUTUAL AGREEMENT PROCEDURE

1. Where a resident of a
   Contracting
   State 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 23, to that of the
   Contracting State of which he is a national.

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.

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

1. The competent authorities of the
   Contracting States shall exchange such information as is necessary for
   carrying out the provisions of this Agreement or of the domestic laws
   of the Contracting States concerning taxes covered by the Agreement
   insofar as the taxation thereunder is not contrary to the Agreement.
   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, the enforcement or prosecution in
   respect of, or the determination of appeals in relation to, the taxes
   covered by the Agreement. Such persons or authorities shall use the
   information only for such purposes. They may disclose the information
   in public court proceedings or in judicial decisions.

2. In no case shall the provisions
   of
   paragraph (1) be construed so as to impose on a Contracting State State
   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
26
MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Article
27
ENTRY INTO FORCE

1. Each Contracting State shall
   notify
   to the other Contracting State the completion of the procedures
   required by its law for the bringing into force of this Agreement. This
   Agreement shall enter into force on the date of the later of these
   notifications.

2. The provisions of this
   Agreement
   shall have effect :

   (a)	with regard to taxes withheld at source, in respect of amounts paid or credited on or after the first day of January next following the date upon which this Agreement enters into force; and
   (b)	with regard to other taxes, in respect of taxable years beginning on or after the first day of January next following the date upon which this Agreement enters into force.

Article
28
TERMINATION

This Agreement shall remain in force
until terminated by a Contracting State. Either Contracting State may
terminate the Agreement, through diplomatic channels, by giving notice
of termination at least six months before the end of any calendar year
beginning after the expiration of five years from the date of entry
into force of the Agreement. In such event, the Agreement shall cease
to have effect:

 

Done in duplicate at
Jakarta this 25th day of February 1997 in the
Turkish, Indonesian and English languages, all three texts being
equally authentic. In case of divergence between the texts, the English
text shall be the operative one.

PROTOCOL

At
the time of signing the
Agreement for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with respect to taxes on income, concluded this day
between the Republic of Indonesia and the Republic of Turkey, the
undersigned have agreed that the following provisions shall form an
integral part of the Agreement.

1.With respect to Article
5:

 

It is understood that
the use of facilities solely for the purpose of
mere delivery of goods or merchandise and the maintenance of a stock of
goods or merchandise solely for the purpose of mere delivery shall not
be treated as permanent establishment for the purposes of this
Agreement. On the contrary, the regular delivery in such cases and in
the cases of activities of a person other than acting as an agent of an
independent status on behalf of an enterprise and who habitually
maintains a stock of goods or merchandise in the other Contracting
State, shall be deemed to be a permanent establishment for the purposes
of this Agreement.

2.With respect to Article
10:

 

The provisions of
paragraph 4 of this Article shall not affect the
provisions contained in any production sharing contracts or any other
similar contracts relating to [the] oil and gas sector or other mining
sector concluded by the Government of Indonesia, its instrumentality,
its relevant state oil and gas company or any other entity thereof with
a person who is a resident of Turkey.

 

3.With respect to Article
16:

 

The term “a member of
the board of directors of company” shall include
managing directors (anggota pengurus) and supervisory directors
(anggota dewan komisaris) of an Indonesia company.

 

4.With respect to Article
24:

 

For the purposes of
paragraph 3 of Article XXII (Consultation) of the
General Agreement on Trade in Services, the Contracting States agree
that, notwithstanding that paragraph, any dispute between them as to
whether a measure falls within the scope of this Agreement may be
brought before the Council for Trade in Services, as provided by that
paragraph, only with the consent of both Contracting States. Any doubt
as to the interpretation of this paragraph shall be resolved under
paragraph 3 of Article 24 or, failing agreement under that procedure,
pursuant to any other procedure agreed by both Contracting States.

In
witness whereof, the undersigned duly authorized thereto have signed
the present Protocol and have affixed their seals thereto.

Done in duplicate at
Jakarta this 25th day of February 1997 in the
Turkish, Indonesian and English languages, all three texts being
equally authentic. In case of divergence between the texts, the English
text shall be the operative one.