United Kingdom

The taxes which are the
subject of this Agreement are:

in the United Kingdom:

the income tax;

the corporation tax; and

the capital gains tax;

(hereinafter referred to as
“United Kingdom tax”);

in Indonesia:
the income tax (Pajak Penghasilan 1984), and to the extent provided in such income tax, the
company tax (Pajak Perseroan 1925), and the tax on interest, dividends and royalties (Pajak Atas
Bunga, Dividen dan Royalty 1970);
(hereinafter referred to as “Indonesian tax”).

This Agreement shall also
apply to any identical or substantially similar taxes which are imposed by either Contracting
State after the date of signature of this Agreement in addition to, or in place of the taxes
referred to in paragraph 1 of this Article. The competent authorities of the Contracting States
shall notify each other of any substantial changes which are made in their respective taxation
laws.

In this Agreement, unless the
context otherwise requires:

the term “United Kingdom of
Great Britain and Northern Ireland” means the territory of Great Britain and Northern Ireland,
including any maritime area situated beyond the territorial waters of the United Kingdom within
which the United Kingdom of Great Britain and Northern Ireland may exercise rights with regard to
the seabed and subsoil and the natural resources in accordance with international law;

the term “Indonesia” means the
territory under the sovereignty of the Republic of Indonesia and such parts of the Continental
Shelf and the adjacent seas, over which the Republic of Indonesia has sovereignty, sovereign
rights as well as other rights in accordance with international law;

the term “national” means:

in relation to the United
Kingdom, any British citizen or any British subject not possessing the citizenship of any other
Commonwealth country or territory, provided he has the right of abode in the United Kingdom; and
any legal person, partnership, association or other entity deriving its status as such from the
law in force in the United Kingdom;

in relation to Indonesia, any
individual possessing the nationality of Indonesia, and any juridical person created or organised
under the laws of Indonesia and any organisation without juridical personality treated for the
purposes of Indonesian tax as a juridical person created or organised under the laws of Indonesia;

the terms “a Contracting
State” and “the other Contracting State” mean the United Kingdom or Indonesia as the context
requires;

the term “person” comprises an
individual, a company and any other body of persons, but subject to paragraph 2 of this Article
does not include a partnership;

the term “company” means any
body corporate or any entity which is treated as a body corporate for tax purposes;

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;

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;

the term “competent authority”
means, in the case of the United Kingdom the Commissioners of Inland Revenue or their authorised
representative, and in the case of Indonesia the Minister of Finance or his authorised
representative.

A partnership deriving its
status from Indonesian law which is treated as a taxable unit under the law of Indonesia shall be
treated as a person for the purposes of this Agreement.

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

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

Where by reason of the
provisions of paragraph 1 of this Article an individual is a resident of both Contracting States,
then his status shall be determined in accordance with the following rules:

he shall be deemed to be a
resident of the Contracting State in which he has a permanent home available to him; if he has a
permanent home available to him in both Contracting States, he shall be deemed to be a resident of
the Contracting State with which his personal and economic relations are closer (centre of vital
interests);

if the Contracting State in
which he has his centre of vital interests cannot be determined, or if he has not a permanent home
available to him in either Contracting State, he shall be deemed to be a resident of the
Contracting State in which he has an habitual abode;

if he has an habitual abode in
both Contracting States or in neither of them, the competent authorities of the Contracting States
shall settle the question by mutual agreement.

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

The fact that an enterprise of
a Contracting State carries on business in the other Contracting State through a permanent
establishment situated therein shall not constitute either the enterprise or the permanent
establishment a resident of that other State.

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.

a mine, an oil or gas well, a
quarry or any other place of extraction of natural resources.

The term “permanent
establishment” likewise includes:

a building site, a
construction, assembly or installation project or supervisory activities in connection therewith,
but only where such site, project or activities continue for a period of more than 183 days;

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 connected project) within the Contracting State for a period or periods aggregating more than
91 days within any continuous period of twelve months.

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

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

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

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

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

the maintenance of a fixed
place of business solely for the purpose of advertising, supply of information, scientific
research or any other activity of a preparatory or auxiliary character, for the enterprise;

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

A person acting in a
Contracting State on behalf of an enterprise of the other Contracting State, other than an agent
of an independent status to whom the provisions of paragraph 7 of the Article apply, shall be
deemed to be a permanent establishment in the first-mentioned State if:

he has, and habitually
exercises in that State, an authority to conclude contracts in the name of the enterprise, unless
his activities are limited to the purchase of goods or merchandise for the enterprise; or

he maintains in the
first-mentioned State a stock of goods or merchandise belonging to the enterprise from which he
regularly fills orders on behalf of the enterprise.

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

An enterprise of a Contracting
State shall not be deemed to have a permanent establishment in the other Contracting State merely
because it carried on business in that other State through a broker, general commission agent or
any other agent of an independent status, where 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
to the business of that enterprise, he shall not be considered an agent of an independent status
within the meaning of this paragraph.

The fact that a company which
is a resident of a Contracting State controls or is controlled by a company which is a resident of
the other Contracting State, or which carries on business in that other State (whether through a
permanent establishment or otherwise), shall not of itself constitute either company a permanent
establishment of the other.

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

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

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

The provisions of paragraphs 1
and 3 of this Article 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.

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 directly or indirectly attributable to that permanent
establishment.

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

In the determination of the
profits of a permanent establishment, there shall be allowed as deductions expenses which are
incurred for the purposes of the permanent establishment, including a reasonable allocation of
executive and general administrative expenses incurred for the purposes of the enterprise as a
whole, whether in the Contracting State in which the permanent establishment is situated or
elsewhere.

Insofar as it has been
customary in a Contracting State, according to its law, to determine the profits to be attributed
to a permanent establishment on the basis of an apportionment of the total profit of the
enterprise to its various parts, nothing in paragraph 2 of this Article shall preclude that
Contracting State from determining the profits to be taxed by such an apportionment as may be
customary; the method of apportionment adopted shall, however, be such that the result shall be in
accordance with the principles laid down in this Article.

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

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

Where profits include items
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.

Profits derived by a resident
of a Contracting State from international traffic shall be taxable only in that State.

Where profits within paragraph
1 of this Article are derived by a resident of a Contracting State from participation in a pool, a
joint business or an international operating agency, the profits attributable to that resident
shall be taxable only in the Contracting State of which he is a resident.

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

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;

Dividends paid by a company
which is a resident of the United Kingdom to a resident of Indonesia may be taxed in Indonesia.

Where a resident of Indonesia
is entitled to a tax credit in respect of such a dividend under subparagraph (b) of this
paragraph, tax may also be charged in the United Kingdom and according to the laws of the United
Kingdom on the aggregate of the amount or value of that dividend and the amount of that tax credit
at a rate not exceeding 15%.

Except as aforesaid dividends
paid by a company which is a resident of the United Kingdom to a resident of Indonesia who is the
beneficial owner of the dividends shall be exempt from any tax in the United Kingdom which is
chargeable on dividends.

A resident of Indonesia who
receives a dividend from a company which is a resident of the United Kingdom shall, subject to the
provisions of subparagraph (c) of this paragraph and provided he is the beneficial owner of the
dividend, be entitled to the tax credit in respect thereof to which an individual resident in the
United Kingdom would have been entitled had he received that dividend and to the payment of any
excess of that tax credit over his liability to United Kingdom tax.

The provisions of subparagraph
(b) of this paragraph shall not apply where the beneficial owner of the dividend is, or is
associated with, a company which, either alone or together with one or more associated companies,
controls, directly or indirectly, at least 10% of the voting power in the company paying the
dividend. For the purposes of this subparagraph, two companies shall be deemed to be associated if
one controls, directly or indirectly, more than 50% of the voting power in the other company, or a
third company controls more than 50% of the voting power in both of them.

Dividends paid by a company which is a
resident of Indonesia to a resident of the United Kingdom may be taxed in the United Kingdom. Such
dividends may also be taxed in Indonesia and according to the laws of Indonesia, 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 if the beneficial owner is a company which controls, directly or indirectly, at least
15% of the voting power in the company paying the dividends;

in all other cases 15% of the
gross amount of the dividends.

The preceding paragraphs of
this Article 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 assimilated to income from shares by the
taxation laws of the State of which the company making the distribution is a resident and also
includes any other item which, under the laws of the Contracting State of which the company paying
the dividend is a resident, is treated as a dividend or distribution of a company.

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

Where a company which is a
resident of a Contracting State derives profits or income from the other Contracting State, that
other State may not impose any tax on the dividends paid by the company, except insofar as such
dividends are paid to a resident of that other State or insofar as the holding in respect of which
the dividends are paid is effectively connected with a permanent establishment or a fixed base
situated in that other State, nor subject the company’s undistributed profits to a tax on
undistributed profits, even if the dividends paid or the undistributed profits consist wholly or
partly of profits or income arising in that other State.

Notwithstanding the other
provisions of this Agreement, where a company which is a resident of a Contracting State, having a
permanent establishment in the other Contracting State, derives profits through that permanent
establishment, such profits may be taxed (in addition to the tax which would be chargeable on
those profits if they were the profits of a company which was a resident of that other Contracting
State) in accordance with the laws of the other Contracting State but the rate of tax so imposed
shall not exceed 10% of the profits of the permanent establishment after payment of the income tax
on those profits.

The provisions of paragraph 7
of this Article shall not affect the provisions contained in any production sharing contracts and
contracts of work (or any similar contracts) relating to the oil or gas sector or other mining
sector entered into by a resident of the United Kingdom with the Government of Indonesia, its
instrumentality, its relevant state oil and gas company or any other entity thereof, provided such
contracts:

were concluded on or before
31st December 1983; or

were being negotiated at 31st
December 1983 and the Minister of Finance of Indonesia determined before the date of signature of
this Agreement that the profits or income arising from such contracts should be taxed in Indonesia
in accordance with the laws in force in Indonesia at 31st December 1983.

Interest arising in a
Contracting State which is derived by a resident of the other Contracting State may be taxed in
that other State.

However, such interest may
also be taxed in the Contracting State in which it arises, and according to the law of that State;
but where the beneficial owner of such interest is a resident of the other Contracting State the
tax so charged shall not exceed 10% of the gross amount of the interest.

Notwithstanding the provisions
of paragraph 2 of this Article, interest arising in a Contracting State shall be exempt from tax
in that State if:

it is derived and beneficially
owned by the Government of the other Contracting State, or a political subdivision or a local
authority thereof, or the central bank of that other State, or by any agency or instrumentality
of, or any financial institution wholly owned by, that Government; or

it is paid in respect of a
loan made, guaranteed or insured, or any other debt-claim or credit guaranteed or insured by the
Government of the other Contracting State, or a political subdivision or a local authority of, or
the central bank of that other State, or any agency or instrumentality of, or any financial
institution wholly owned by, that Government.

For the purposes of paragraph 3 of this
Article, the terms “central bank”, “agency”, “instrumentality” and “financial institution
wholly owned by that Government” mean:

in the case of the United
Kingdom:

the Bank of England;

the United Kingdom Export
Credits Guarantee Department;

the Commonwealth Development
Corporation; and

such other agencies or
instrumentalities of, and such other financial institutions wholly owned by, the Government of the
United Kingdom as may be agreed from time to time between the competent authorities of the
Contracting States;

in the case of Indonesia:

the Bank of Indonesia; and

such other agencies or
instrumentalities of, and such other financial institutions wholly owned by, the Government of the
Republic of Indonesia as may be agreed from time to time between the competent authorities of the
Contracting States.

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 but shall not include any item
which is treated as a distribution under the provisions of Article 10 of this Agreement.

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

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

Where, by reason of a special
relationship between the payer and the beneficial owner or between both of them and some other
person, the amount of the interest paid exceeds, for whatever reason, 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 law of each Contracting State, due
regard being had to the other provisions of this Agreement.

The provisions of this Article
shall not apply if it was the main purpose or one of the main purposes of any person concerned
with the creation or assignment of the debt-claim in respect of which the interest is paid to take
advantage of this Article by means of that creation or assignment.

Royalties arising in a
Contracting State which are derived by a resident of the other Contracting State may be taxed in
that other State.

However, such royalties may
also be taxed in the Contracting State in which they arise and according to the law of that State;
but where the beneficial owner of such royalties is a resident of the other Contracting State the
tax so charged shall not exceed:

in the case of royalties
referred to in subparagraph (a) of paragraph 3 of this Article, 15% of the gross amount of the
royalties; and

in the case of royalties
referred to in subparagraph (b) of paragraph 3 of this Article, 10% of the gross amount of the
royalties.

The term “royalties” as used
in this Article comprises:

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 films or tapes for radio or television
broadcasting, or any patent, know-how, trade mark, design or model, plan, secret formula or
process; and

payments of any kind received
as a consideration for the use of, or the right to use, any industrial, commercial or scientific
equipment.

The provisions of paragraphs 1
and 2 of this Article 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 of this Agreement, as the
case may be, shall apply.

Royalties shall be deemed to
arise in a Contracting State when the payer is that State itself, a 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 that permanent establishment or fixed base, then such royalties shall
be deemed to arise in the State in which the permanent establishment or fixed base is situated.

Where, by reason of a special
relationship between the payer and the beneficial owner or between both of them and some other
person, the amount of the royalties paid exceeds, for whatever reason, 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.

The provisions of this Article
shall not apply if it was the main purpose or one of the main purposes of any person concerned
with the creation or assignment of the right or property in respect of which the royalties are
paid to take advantage of this Article by means of that creation or assignment.

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

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

Gains derived by a resident of
a Contracting State from the alienation of ships or aircraft operated in international traffic or
movable property pertaining to the operation of such ships or aircraft shall be taxable only in
that State.

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

The provisions of paragraph 4
of this Article shall not affect the right of a Contracting State to levy according to its law a
tax on capital gains from the alienation of any property derived by an individual who is a
resident of the Contracting State and has been a resident of the first-mentioned Contracting State
at any time during the five years immediately preceding the alienation of the property.

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; in
that case only so much of the income as is attributable to that fixed base may be taxed in that
other State; or

his stay in the other
Contracting State is for a period or periods amounting to or exceeding in the aggregate 91 days in
any continuous period of twelve months; in that case only so much of the income as is derived from
his activities performed in that other State may be taxed in that other State.

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

Subject to the provisions of
Articles 16, 17, 18, 19 and 20 of this Agreement, salaries, wages and other similar remuneration
derived by a resident of a Contracting State in respect of an employment shall be taxable only in
that State unless the employment is exercised in the other Contracting State. If the employment is
so exercised, such remuneration as is derived therefrom may be taxed in that other State.

Notwithstanding the provisions
of paragraph 1 of this Article, 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:

the recipient is present in
the other State for a period or periods not exceeding in the aggregate 183 days within any
continuous period of twelve months; and

the remuneration is paid by,
or on behalf of, an employer who is not a resident of the other State; and

the remuneration is not borne
by a permanent establishment or a fixed base which the employer has in the other State.

Notwithstanding the preceding
provisions of this Article, remuneration derived in respect of an employment exercised aboard a
ship or aircraft operated in international traffic may be taxed in the Contracting State of which
the person deriving the profits from the operation of the ship or aircraft is a resident.

Directors’ fees and similar
payments derived by a resident of the United Kingdom in his capacity as a “pengurus” or a
“komisaris” of a company which is a resident of Indonesia may be taxed in Indonesia.

Directors’ fees and similar
payments derived by a resident of Indonesia in his capacity as a member of the board of directors
of a company which is a resident of the United Kingdom may be taxed in the United Kingdom.

Notwithstanding the provisions
of Articles 14 and 15 of this Agreement, income derived by a resident of a Contracting State as an
entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as
an athlete, from his personal activities as such exercised in the other Contracting State, may be
taxed in that other State.

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

Notwithstanding the provisions
of paragraphs 1 and 2 of this Article, income derived from activities referred to in paragraph 1
performed under a cultural agreement or arrangement between the Contracting States shall be exempt
from tax in the Contracting State in which the activities are exercised if the visit to that State
is wholly or substantially supported by funds of the other Contracting State, a political
subdivision, a local authority or public institution thereof.

Subject to the provisions of
paragraph 2 of Article 19 of this Agreement, 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.

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.

Remuneration, other than a
pension, paid by a Contracting State or a political subdivision or a local authority thereof to an
individual in respect of services rendered to that State or subdivision or authority shall be
taxable only in that State.

However, such remuneration
shall be taxable only in the other Contracting State if the services are rendered in that State
and the individual is a resident of that State who: 

is a national of that State;
or

did not become a resident of
that State solely for the purpose of rendering the services.

Any pension paid by, or out of
funds created by, a Contracting State or a political subdivision or a local authority thereof to
an individual in respect of services rendered to that State or subdivision or authority shall be
taxable only in that State.

However, such pension shall be
taxable only in the other Contracting State if the individual is a resident of, and a national of,
that State.

The provisions of Articles 15,
16 and 18 of this Agreement shall apply to remuneration and pensions in respect of services
rendered in connection with a business carried on by a Contracting State or a political
subdivision or a local authority thereof.

An individual who is or was a
resident of a Contracting State immediately before making a visit to the other Contracting State
and is temporarily present in that other Contracting State solely as a student at a university,
college, school or other similar recognised educational institution in that other Contracting
State or as a business or technical apprentice therein, shall be exempt from tax in that other
Contracting State on:

all remittances from the
first-mentioned Contracting State for the purposes of his maintenance, education or training; and

any income derived from the
other Contracting State in respect of services rendered in that other Contracting State (other
than any rendered by a business or technical apprentice to the person or partnership to whom he is
apprenticed), with a view to supplementing the resources available to him for such purposes, not
exceeding the sum of , 500 sterling in the case of the United Kingdom, or the equivalent in
Indonesian currency in the case of Indonesia, during any year of assessment.

An individual who is or was a
resident of a Contracting State immediately before making a visit to the other Contracting State
and is temporarily present in that other Contracting State for the purposes of study, research or
training solely as a recipient of a grant, allowance or award from the Government of either of the
Contracting States or from a scientific, educational, religious or charitable organisation or
under a technical assistance programme entered into by the Government of either of the Contracting
States for a period not exceeding two years from the date of his first arrival in that other
Contracting State in connection with that visit shall be exempt from tax in that other Contracting
State on:

the amount of such grant,
allowance or award; and

any income derived from that
other Contracting State in respect of services in that other Contracting State if the services are
performed in connection with his study, research, or training or are incidental thereto.

An individual who is or was a
resident of a Contracting State immediately before making a visit to the other Contracting State
and is temporarily present in that other Contracting State solely as an employee of, or under
contract with, the Government or an enterprise of the first-mentioned Contracting State for the
purpose of acquiring technical, professional or business experience for a period not exceeding
twelve months from the date of his first arrival in that other Contracting State in connection
with that visit shall be exempt from tax in that other Contracting State on:

all remittances from the
first-mentioned Contracting State for the purposes of his maintenance, education or training; and

any remuneration, so far as it
is not in excess of , 500 sterling or the equivalent in Indonesian currency, as the case may be,
for personal services rendered in that other Contracting State, provided such services are in
connection with his studies or training or are incidental thereto.

Provided that the benefits
under this paragraph shall not be granted if the technical, professional or business experience is
acquired from a company controlled directly or indirectly by the Government or the enterprise
which sent the employee or the person under contract.

Subject to the provisions of
the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of
tax payable in a territory outside the United Kingdom (which shall not affect the general
principle hereof):

Indonesian tax payable under
the laws of Indonesia and in accordance with this Agreement, whether directly or by deduction, on
profits, income or chargeable gains from sources within Indonesia (excluding in the case of a
dividend, tax payable in respect of the profits out of which the dividend is paid) shall be
allowed as a credit against any United Kingdom tax computed by reference to the same profits,
income or chargeable gains by reference to which the Indonesian tax is computed;

in the case of a dividend paid
by a company which is a resident of Indonesia to a company which is a resident of the United
Kingdom and which controls directly or indirectly at least 10% of the voting power in the company
paying the dividend, the credit shall take into account (in addition to any Indonesian tax for
which credit may be allowed under the provisions of subparagraph (a) of this paragraph) the
Indonesian tax payable by the company in respect of the profits out of which such dividend is
paid.

Where a resident of Indonesia
derives income from the United Kingdom and such income may be taxed in the United Kingdom in
accordance with the provisions of this Agreement, the amount of United Kingdom tax payable in
respect of the income shall be allowed as a credit against the Indonesian tax imposed on that
resident. The amount of credit, however, shall not exceed that part of the Indonesian tax which is
appropriate to such income.

For the purposes of paragraph 1 of this
Article, the term “Indonesian tax payable” shall be deemed to include any amount which would have
been payable as Indonesian tax for any year but for an exemption or reduction of tax granted for
the year or any part thereof under Article 15(5) and Article 16(1) and (2) of Law No. 1 of 1967 of
Indonesia to the extent that these provisions continue in force by virtue of Article 33(2)(a) of
Act No. 7 of 1983 of Indonesia.
Provided that relief from United Kingdom tax shall not be given by virtue of this paragraph in
respect of income from any source if the income arises in a period starting more than 10 years
after the exemption from, or reduction of, Indonesian tax was first granted in respect of that
source.

For the purposes of paragraphs
1 and 2 of this Article, profits, income and capital gains owned by a resident of a Contracting
State which may be taxed in the other Contracting State in accordance with this Agreement shall be
deemed to arise from sources in that other Contracting State.

Where profits on which an
enterprise of a Contracting State has been charged to tax in that State are also included in the
profits of an enterprise of the other State and the profits so included are profits which would
have accrued to that enterprise of the other State if the conditions made between the enterprises
had been those which would have been made between independent enterprises dealing at arm’s length,
the amount included in the profits of both enterprises shall be treated for the purposes of this
Article as income from a source in the other State of the enterprise of the first-mentioned State
and relief shall be given accordingly under the provisions of paragraph 1 or paragraph 2 of this
Article.

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

Subject to the provisions of
paragraphs 7 and 8 of Article 10 of this Agreement, 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.

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
that first-mentioned State are or may be subjected.

Nothing contained in this
Article shall be construed as obliging either Contracting State to grant to individuals not
resident in that State any of the personal allowances, reliefs and reductions for tax purposes
which are granted to individuals so resident.

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

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 this Agreement, he may, notwithstanding 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.

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 not in accordance with
the Agreement.

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.

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 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 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.

In no case shall the
provisions of paragraph 1 of this Article be construed so as to impose on the competent authority
of either Contracting State the obligation:

to carry out administrative
measures at variance with laws and administrative practice prevailing in either Contracting
States;

to supply information which is
not obtainable under the laws or in the normal course of the administration of either Contracting
State;

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).

Nothing in this Agreement
shall affect the fiscal privileges of members of diplomatic or permanent missions or consular
posts under the general rules of international law or under the provisions of special agreements.

Notwithstanding the provisions
of paragraph 1 of Article 4, an individual who is a member of the diplomatic or permanent mission
or consular post of a Contracting State or any third State which is situated in the other
Contracting State and who is subject to tax in that other State only if he derives income from
sources therein, shall not be deemed to be a resident of that other State.

Each of the Contracting States
shall notify to the other the completion of the procedure required by its law for the bringing
into force of this Agreement.

The Agreement shall enter into
force on the date of the later of these notifications and shall thereupon have effect:

in the United Kingdom:

as respects income tax and
capital gains tax, for any year of assessment beginning on or after 6th April;

as respects corporation tax,
for any financial year beginning on or after 1st April;

in Indonesia:
as respects income derived during any fiscal year beginning on or after 1st January; in either
case in the calendar year next following that in which the later of such notifications is given.

The Agreement between the
Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the
Republic of Indonesia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income and Capital signed at Jakarta on 13th March 1974 shall terminate
and cease to be effective from the date upon which this Agreement has effect in respect of the
taxes to which this Agreement applies in accordance with the provisions of paragraph 1 of this
Article.

in the United Kingdom:

as respects income tax and
capital gains tax, for any year of assessment beginning on or after 6th April in the calendar year
next following that in which the notice is given;

as respects corporation tax,
for any financial year beginning on or after 1st April in the calendar year next following that in
which the notice is given; and

in Indonesia:
as respects income derived during any fiscal year beginning on or after 1st January in the
calendar year next following that in which the notice is given.

For the Government of
the Republic of Indonesia

For the Government of
United Kingdom of Great Britain 

and Northern Ireland