AGREEMENT
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
GOVERNMENT OF THE REPUBLIC OF UZBEKISTAN
FOR
THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAKES ON INCOME (PROFITS)
Article
1
PERSONAL SCOPE
This Agreement shall apply to
persons
who are residents of one or both of the Contracting States.
Article
2
TAXES COVERED
-
This Agreement shall apply to
taxes
on income (profits) imposed on behalf of each Contracting State or
local authorities, irrespective of the manner in which they are levied. -
There shall be regarded as taxes
on
income (profits) and 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 -
The existing taxes to which the
Agreement shall apply are in particular :(a) in
the case of the Republic of Uzbekistan:(i) the
tax on income (profits) of enterprises, associations and organizations,
and(ii) the
individual income tax on the citizens of the Republic of Uzbekistan,
foreign citizens and stateless persons(b) in
the case of the Republic of Indonesia:the
income tax imposed under the Undang-undang Pajak Penghasilan 1984 (Law
no. 7 of 1983 as amended)
(hereinafter referred to
as “Indonesian tax”). -
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 any substantial changes which have been made
in their respective taxation laws.
Article
3
GENERAL DEFINITIONS
-
For the purposes of this
Agreement, unless the context otherwise requires :(a) the term Indonesia means the
territory of the Republic of Indonesia as defined in its laws ;(b) the term “Indonesia” means
the territory of the Republic of Indonesia as defined in its laws;(c) the terms “Contracting State”
and “the other Contracting State” mean Uzbekistan or Indonesia as the
context requires;(d) the term “person” includes an
individual, a company and any other body of persons;(e) the term “company” means any
person that is a body corporate or any partnership, joint venture or
other entity which is treated under the laws of the Contracting State
from which it derives its status as such as a body corporate for tax
purposes;(f) the terms “enterprise of a
Contracting State” and “enterprise of the other Contracting State” mean
respectively an enterprise carried on by a person who is a resident of
a Contracting State and an enterprise carried on by a resident of the
other Contracting State;(g) the term “international
traffic” means any transport by a ship or aircraft operated by an
enterprise of a Contracting State, except when the ship or aircraft is
operated solely between places in the other Contracting State;(h) the term “competent
authority” means, in the case of the Republic of Uzbekistan the
Chairman of the State Tax Committee or his authorized representative,
and in the case of the Republic of Indonesia the Minister of Finance or
his authorized representative;(i) 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. -
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
-
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, place of incorporation, place of management or any
other criterion of a similar nature. But this term does not include any
person who is liable to tax in that State in respect only of income
from sources in that State. -
Where by reason of the
provisions
of paragraph 1 an individual is a resident of both Contracting States,
then his status shall be determined as follows :(a) he shall be deemed to be a
resident of the State in which he has a permanent home available to
him; if he has a permanent home available to him in both States, he
shall be deemed to be a resident of the State with which his personal
and economic relations are closer (centre of vital interests);(b) if the State in which he has
his centre of vital interests cannot be determined, or if he has not a
permanent home available to him in either State, he shall be deemed to
be a resident of the State in which he has an habitual abode;(c) if he has an habitual abode
in both States or in neither of them, he shall be deemed to be a
resident of the State of which he is a national;(d) if each of the Contracting
States considers him to be a resident of that State or of neither of
them, the competent authorities of the Contracting States shall settle
the question by mutual Agreement. -
Where by reason of the
provisions
of paragraph 1 a person other than an individual is a resident of both
Contracting States, the competent authorities of the State shall settle
the question by mutual agreement.
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 of a Contracting State is
wholly or partly carried on in the other Contracting State. -
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 or exploration of natural
resources, drilling rig or working ship. -
The term “permanent
establishment”
likewise encompasses :(a) a building site, a
construction, assembly or installation project or supervisory
activities in connection therewith, but only where such site, project
or activities continue for a period of more than 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 3 months within any twelve month period. -
Notwithstanding the preceding
provisions of this Article, the term permanent establishment shall be
deemed not to include:(a) the use of 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 7 applies — is acting in a
Contracting State on behalf of an enterprise of the other Contracting
State, that enterprise shall be deemed to have a permanent
establishment in the first-mentioned State in respect of any activities
which that person undertakes for the enterprise, if such a person has
and habitually exercises in that State an authority to conclude
contracts on behalf 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. -
An insurance enterprise of a
Contracting State shall, except with regard to reinsurance, be deemed
to have a permanent establishment in the other Contracting State if it
collects premiums in that other State or insures risks situated therein
through an employee or through a representative who is not an agent of
an independent status within the meaning of paragraph 7. -
An enterprise of a Contracting
State shall not be deemed to have a permanent establishment in the
other Contracting State merely because it carries on business in that
other State through a broker, general commission agent or any other
agent of an independent status, provided that such persons are acting
in the ordinary course of their business. However, when the activities
of such an agent are devoted wholly or almost wholly on behalf of that
enterprise or its associated enterprises, he will 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.
Article
6
INCOME FROM IMMOVABLE PROPERTY
-
Income derived by a resident of
a
Contracting State from immovable property (including income from
agriculture or forestry) situated in the other Contracting State may be
taxed in that other State. -
In this Agreement, the term
“immovable property” shall have the meaning which it has for the
purposes of taxation by 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, fishery of every kind, rights to which the
provisions of general law respecting landed property apply, usufruct of
immovable property and rights to variable or fixed payments as
consideration for the working of, or the right to work mineral
deposits, sources and other natural resources; ships, and aircraft
shall not be regarded as immovable property. -
The term “usufruct” when being
used
in this Article means the right to the lifelong use of somebody else’s
property and income thereof. -
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
a
Contracting State shall be taxable only in that State unless the
enterprise carries on business in the other Contracting State through a
permanent establishment situated therein. If the enterprise carries on
business as aforesaid, the profits of the enterprise may be taxed in
the other State but only so much of them as is attributable to:(a) that permanent establishment;
(b) sales in that other State of
goods or merchandise of the same or similar kind as those sold through
that permanent establishment; or(c) other business activities
carried on in that other State of the same or similar kind as those
effected through that permanent establishment. -
Subject to the provisions of
paragraph 3, where an enterprise of a Contracting State carries on
business in the other Contracting State through a permanent
establishment situated therein, there shall in each Contracting State
be attributed to that permanent establishment the profits which it
might be expected to make if it were a distinct and separate enterprise
engaged in the same or similar activities under the same or similar
conditions and dealing wholly independently with the enterprise of
which it is a permanent establishment -
In determining the profits of a
permanent establishment, there shall be allowed as deductions expenses
which are incurred for the purposes of the business of the permanent
establishment including executive and general administrative expenses
so incurred, whether in the State in which the permanent establishment
is situated or elsewhere. No such deduction shall be allowed in respect
of amounts, if any, paid (otherwise than towards reimbursement of
actual expenses) by the permanent establishment to the head office of
the enterprise or any of its other offices, by way of royalties, fees
or other similar payments in return for the use of patents or other
rights, or by way of commission, for specific services performed or for
management, or, except in the case of a banking enterprise , by way of
interest on moneys lent to the permanent establishment. No account
shall be taken, in the determination of the profits of a permanent
establishment, for amounts charged, (otherwise than towards
reimbursement of actual expenses), by the permanent establishment to
the head office of the enterprise or any of its other offices, by way
of royalties, fees or other similar payments in return for the use of
patents or other rights, or by way of commission for specific services
performed or for management, or, except in the case of a banking
enterprise, by way of interest on moneys lent to the head office of the
enterprise or any of its other offices. -
In so far as it has been
customary
in a Contracting State to determine the profits to be attributed to a
permanent establishment on the basis of an apportionment of the total
profits of the enterprise to its various parts, nothing in paragraph 2
shall preclude that 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 contained in this Article. -
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
INTERNATIONAL TRANSPORT
-
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. -
The provisions of paragraph 1
shall also apply to:(a) incidental profits derived
from the rental (including on a bareboat basic) of ships or aircraft
operated in international traffic;(b) profits
from the use, maintenance or rental of containers (including trailers
and other equipment for the transport of containers), where such
profits
are
supplementary or incidental in respect to the profits to which the
paragraph 1 shall apply. -
The provisions of paragraph 1
and 2
shall also apply to profits from participation in a pool (in a common
fund), a joint business or an international operating agency.
Article
9
ASSOCIATED ENTERPRISES
-
Where
(a) an enterprise of a
Contracting State participates directly or indirectly in the
management, control or capital of an enterprise of the other
Contracting State, or(b) the same persons participate
directly or indirectly in the management, control or capital of an
enterprise of a Contracting State and an enterprise of the other
Contracting State,and in either case conditions
are made or imposed between the two enterprises in their commercial or
financial relations which differ from those which would be made between
independent enterprises, then any profits which would, but for those
conditions, have accrued to one of the enterprises, but, by reason of
those conditions, have not so accrued, may be included in the profits
of that enterprises and taxed accordingly. -
Where a Contracting State
includes
in the profits of an enterprise of that State — and taxes accordingly
— profits on which an enterprise of the other Contracting State has
been charged to tax in that other State and the profits so included are
profits which would have accrued to the enterprise of the
first-mentioned State if the conditions made between the two
enterprises had been those which would have been made between
independent enterprises, then that other State shall make an
appropriate adjustment to the amount of the tax charged therein on
those profits. In determining such adjustment, due regard shall be had
to the other provisions of this Agreement and the competent authorities
of the Contracting States shall if necessary consult each other. -
A Contracting State shall not
change the profits of an enterprise in the circumstances referred to in
paragraph 2 after the expiry of the time limits provided in its tax
laws.
Article
10
DIVIDENDS
-
Dividends paid by a company
which
is a resident of a Contracting State to a resident of the other State
may be taxed in that other State. -
However, such dividends may also
be
taxed in the Contracting State of which the company paying the
dividends is a resident and according to the laws of that State, but if
the recipient is the beneficial owner of the dividends and is liable to
taxes in respect of dividends in that other Contracting State the tax
so charged shall not exceed 10 per cent 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 any shares or other rights, not being
debt-claims, participating in profits, as well as income from other
corporate rights which is subjected to the same taxation treatment as
income from shares by the laws of the State of which the company making
the distribution is a resident. -
The provisions of paragraphs 1
and
2 shall not apply if the beneficial owner of the dividends, being a
resident of a Contracting State, carries on business in the other
Contracting State of which the company paying the dividends is a
resident, through a permanent establishment situated therein, or
performs in that other State independent personal services from a fixed
base situated therein, and the holding in respect of which the
dividends are paid is effectively connected with such permanent
establishment or fixed base. In such case, the provisions of Article 7
or 14, as the case may be, shall apply. -
Where a company is a resident of
a
Contracting State, the other Contracting State may not impose any tax
on the dividends paid by the company, except insofar as such dividends
are paid to a resident of that other State or insofar as the holding in
respect of which the dividends are paid is effectively connected with a
permanent establishment or a fixed base situated in that other State,
nor subject the company’s undistributed profits to a tax on the
company’s undistributed profits, even if the dividends paid or the
undistributed profits consist wholly or partly of profits or income
arising in such other State. -
Notwithstanding any other
provisions of this Agreement where a company which is a resident of a
Contracting State has a permanent establishment in the other
Contracting State, the profits of the permanent establishment may be
subjected to an additional tax in that other State in accordance with
its law, but the additional tax so charged shall not exceed 10 per cent
of the amount of such profits after deducting therefrom income tax and
other taxes on income imposed thereon in that other State. -
The provision of paragraph 6 of
this Article shall not affect the provisions contained in any
production sharing contracts and contracts of work (or any other
similar contracts) relating to the oil and gas sector or other mining
sector concluded 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 the other Contracting State.
Article
11
lNTEREST
-
Interest arising in a
Contracting
State and paid to a resident of the other Contracting State may be
taxed in that other State. -
However, such interest may also
be
taxed in the Contracting State in which it arises and according to the
laws of that State, but, if the recipient (the beneficial owner of the
interest) is a resident of the other Contracting State, the tax so
charged shall not exceed 10 per cent of the gross amount of the
interest. -
The term “interest” as used in
this
Article means income from debt-claims of every kind, whether or not
secured by mortgage, and in particular, income from government
securities and income from bonds or debentures, including premiums and
prizes attaching to such securities, bonds or debentures. Penalty
charges for late payment shall not be regarded as interest for the
purpose of this Article. -
The provisions of paragraphs 1
and
2 shall not apply if the beneficial owner of the interest, being a
resident of a Contracting State, carries on business in the other
Contracting State in which the interest arises, through a permanent
establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and
the debt-claim in respect of which the interest is paid is effectively
connected with 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 a Contracting State when the payer is that State itself, a local
authority or a resident of that State. Where, however, the person
paying the interest, whether he is a resident of a Contracting State or
not, has in a Contracting State a permanent establishment or a fixed
base in connection with which the indebtedness on which the interest is
paid was incurred, and such interest is borne by such permanent
establishment or fixed base, then such interest shall be deemed to
arise in the State in which the permanent establishment or fixed base
is situated. -
Where, by reason of a special
relationship between the payer and the beneficial owner or between both
of them and some other person, the amount of the interest, having
regard to the debt-claims 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
-
Royalties arising in a
Contracting
State and paid to a resident of the other Contracting State may be
taxed in that other State, if this resident is the beneficial owner of
these royalties. -
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 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, or sale of any copyright of literary,
artistic or scientific work including cinematograph films, or films or
tapes or video cassette 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 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, shall apply. -
Royalties shall be deemed to
arise
in a Contracting State when the payer is that State itself, a local
authority or a resident of that State. Where, however, the person
paying the royalties, whether he is a resident of a Contracting State
or not, has in any State a permanent establishment or a fixed base in
connection with which the ability to pay the royalties was incurred and
such royalties are borne by such permanent establishment or fixed base,
then such royalties shall be deemed to arise in the State in which the
permanent establishment or fixed base is situated. -
Where, by reason of a special
relationship between the payer and the beneficial owner or between both
of them and some other person, the amount of the royalties, having
regard to the use, right or information for which they are paid exceeds
the amount which would have been agreed upon by the payer and the
beneficial owner in the absence of such relationship, the provisions of
this Article shall apply only to the last-mentioned amount. In such
case, the excess part of the payment shall remain taxable according to
the laws of each Contracting State, due regard being had to the other
provisions of this Agreement. -
The provisions of this Article
shall not apply if it was the main purposes or one of the main purposes
of any person concerned with the creation or assignment of the rights
in respect of which the royalties are paid to take advantage of this
Article by means of the creation or assignment.
Article
13
CAPITAL GAINS
-
Gains derived by a resident of a
Contracting State from the alienation of immovable property referred to
in Article 6 and situated in the other Contracting State may be taxed
in that other State. -
Gains from the alienation of
movable property forming part of the business property of a permanent
establishment which an enterprise of a Contracting State has in the
other Contracting State or of movable property pertaining to a fixed
base available to a resident of a Contracting State in the other
Contracting State for the purpose of performing independent personal
services, including such gains from the alienation of such a permanent
establishment (alone or with the whole enterprise) or of such fixed
base, may be taxed in that other State. -
Gains derived by an enterprise
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 referred to in the preceding paragraphs shall
be taxable only in the Contracting State of which the alienator is a
resident.
Article
14
INDEPENDENT PERSONAL SERVICES
-
Income derived by a resident of
a
Contracting State in respect of professional or other similar services
of an independent character shall be taxable only in that State except
in the following circumstances, when such income may also be taxed in
the other Contracting State:(a) if 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(b) if his stay in the other
Contracting State is for a period or periods amounting to or exceeding
in the aggregate 90 days in any 12-month period concerned. -
The term “professional services”
includes especially independent scientific, literary, artistic,
educational or teaching activities as well as the independent
activities of physicians, lawyers, engineers, architects, dentists and
accountants.
Article
15
DEPENDENT PERSONAL SERVICES
-
Subject to the provisions of
Articles 16, 18, 19 and 21, salaries, wages and other similar
remuneration derived by a resident of a Contracting State in respect of
an employment shall be taxable only in that State unless the employment
is exercised in the other Contracting State. If the employment is so
exercised, such remuneration as is derived therefrom may be taxed in
that other State. -
Notwithstanding the provisions
of
paragraph 1, remuneration derived by a resident of a Contracting State
in respect of an employment exercised in the other Contracting State
shall be taxable only in the first-mentioned State, if:(a) the recipient is present in
that 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 that 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. -
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
DIRECTOR’S FEES
Directors’ fees and other similar
payments derived by a resident of a Contracting State in his capacity
as a member of the board of directors or similar organ of a company
which is a resident of the other Contracting State may be taxed in that
other State
Article
17
ARTISTES AND ATHLETES
-
Notwithstanding the provisions
of
Articles 14 and 15, income derived by a resident of a Contracting State
as an entertainer, such as a theatre, motion picture, radio or
television artist, or a musician, or as an athlete, from his personal
activities as such exercised in the other Contracting State, may be
taxed in that other State -
Where income in respect of
personal
activities exercised by an entertainer or an athlete in his capacity as
such accrues not to the entertainer or athlete himself but to another
person, that income may, notwithstanding the provisions of Articles 7,
14 and 15, be taxed in the Contracting State in which the activities of
the entertainer or athlete are exercised -
The provisions of paragraphs 1
and
2 shall not apply to income derived from activities performed in a
Contracting State by artists or athletes if the visit to that State is
completely supported by public funds of one or both of the Contracting
States or local authorities thereof. In such a case, the income is
taxable only in the Contracting State of which the artist or the
athlete is a resident.
Article
18
PENSIONS AND ANNUITIES
-
Pension 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.
Article
19
GOVERNMENT SERVICE
| 1. | (a) |
Remuneration, other than a |
|
| (b) |
However, such remuneration |
||
| (i) |
is a national of that |
||
| (ii) |
did not become a resident |
||
| 2. | (a) |
Any pension paid by, or out |
|
| (b) |
However, such pension shall |
||
| 3. |
The provisions of Articles |
||
Article
20
STUDENTS
Payments which a student or business
apprentice who is or was immediately before visiting a Contracting
State a resident of the other Contracting State and who is present in
the first-mentioned State solely for the purpose of his education or
training receives for the purpose of his maintenance, education or
training shall not be taxed in that State, provided that such payments
arise from sources outside that State.
Article
21
TEACHERS
An individual who is immediately
before
visiting a Contracting State a resident of the other Contracting State
and who, at the invitation of the Government of the first-mentioned
Contracting State or of a University, college, school, museum or other
cultural institution in that first-mentioned Contracting State or under
an official programme of cultural exchange, is present in that
Contracting state for a period not exceeding two consecutive years
solely for the purpose of teaching, or giving lectures at such
institution shall be exempt from tax in that Contracting State on his
remuneration for such activity, provided that payment of such
remuneration is derived by him from outside that Contracting State.
Article
22
OTHER INCOME
-
Items of income of a resident of
a
Contracting State, wherever arising, not dealt with in the foregoing
Articles of this Agreement shall be taxable only in that State. -
The provisions of paragraph 1
shall
not apply to income, other than income from immovable property, if the
recipient of such income, being a resident of a Contracting State,
carries on business in the other Contracting State through a permanent
establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and
the right or property in respect of which the income is paid is
effectively connected with such permanent establishment or fixed base.
In such case the provisions of Article 7 or Article 14, as the case may
be, shall apply. -
Notwithstanding the provisions
of
paragraphs 1 and 2, items of income of a resident of a Contracting
State not dealt with in the foregoing Articles of this Agreement and
arising in the other Contracting State may also be taxed in that other
State
Article
23
ELIMINATION OF DOUBLE TAXATION
-
Where a resident of a
Contracting
State derives income (profits) which, in accordance with the provisions
of this Agreement, may be taxed in the other Contracting State, the
first-mentioned State shall allow as a deduction from the tax on the
income (profits) of that resident, an amount equal to the income tax
paid in that other State. Such deduction shall not, however, exceed
that part of the income (profits) tax as computed before the deduction
is given, which is attributable, as the case may be, to the income
(profits) which may be taxed in that other State -
Where in accordance with any
provision of the Agreement income derived by a resident of a
Contracting State is exempt from tax in that State, such State may
nevertheless, in calculating the amount of tax on the remaining income
of such resident, take into account the exempted income. -
For the purpose of paragraphs 1
and
2 of this Article, profits and income, derived by a resident of one of
the Contracting States which may be taxed in the other Contracting
State in accordance with this Agreement shall be deemed to be derived
from the sources of that other Contracting State. -
Where the amount of tax exempted
or
reduced under certain special incentive measures provided by domestic
legislation of a Contracting State is deemed to have been paid in a
Contracting State, then it shall become deductible from tax of the
other Contracting State.
Article
24
NON-DISCRIMINATION
-
Nationals of a Contracting State
shall not be subjected in the other Contracting State to any taxation
or any requirement connected therewith which is other or more
burdensome than the taxation and connected requirements to which
nationals of that other State in the same circumstances are or may be
subjected. -
The taxation on a permanent
establishment which an enterprise of a Contracting State has in the
other Contracting State shall not be less favourably levied in that
other State than the taxation levied on enterprises of that other State
carrying on the same activities. This provision shall not be construed
as obliging a Contracting State to grant to residents of the other
Contracting State any personal allowances, relieves 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 6 of Article 11, or paragraph 6 of
Article 12 apply, interest, royalty and other disbursements paid by an
enterprise of a Contracting State to a resident of the other
Contracting State shall, for the purpose of determining the taxable
profits of such enterprise, be deductible under the same conditions as
if they had been paid to a resident of the first-mentioned State. -
Enterprises of a Contracting
State,
the capital of which is wholly or partly owned or controlled, directly
or indirectly, by one or more residents of the other Contracting State,
shall not be subjected in the first-mentioned State to any taxation or
any requirement connected therewith which is other or more burdensome
than the taxation and connected requirements to which other similar
enterprises of the first- mentioned State are or may be subjected. -
The provisions of paragraph 3
shall
not affect the provisions of the taxation laws of a Contracting State
that are designed to counter transactions having as their objective to
evade tax. -
In this Article the term
“taxation”
means taxes which are the subject of this Agreement.
Article
25
MUTUAL AGREEMENT PROCEDURE
-
Where a person considers that
the
actions of one or both of the Contracting States result or will result
for him in taxation not in accordance with the provisions of this
Agreement, he may, irrespective of the remedies provided by the
domestic law of those States, present his case to the competent
authority of the Contracting State of which he is a resident or, if his
case comes under paragraph 1 of Article 24, to that of the Contracting
State of which he is a national. The case must be presented within
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 other
Contracting State, with a view to the avoidance of taxation which is
not in accordance with this 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. They may also consult together for the elimination of
double taxation in cases not provided for in 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, 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
26
EXCHANGE OF INFORMATION
-
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 this Agreement,
in particular for the prevention of fraud or evasion of such taxes. 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. However, if the information is originally regarded as
secret in the transmitting State 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 a Contracting State the
obligation:(a) to carry out administrative
measures at variance with the laws and administrative practice of that
or of the other Contracting State;(b) to supply information which
is not obtainable under the laws or in the normal course of the
administration of that or of the other Contracting State;(c) to supply information which
would disclose any trade, business, industrial, commercial or
professional secret or trade process, or information, disclosure of
which would be contrary to public policy (ordre public).
Article
27
DIPLOMATIC AGENTS AND CONSULAR OFFICERS
Nothing in this Agreement shall
affect
the fiscal privileges of diplomatic agents or consular officers under
the general rules of international law or under the provisions of
special agreements.
Article
28
ENTRY INTO FORCE
Each of the Contracting State shall
notify to the other through diplomatic channels 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 and shall there upon have effect:
| (a) |
with respect to taxes withheld at |
| (b) |
with respect of other taxes on |
Article
29
TERMINATION
This Agreement shall remain in force until terminated by one of the
Contracting States. 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 expiry of five years from the date of entry into force of the
Agreement. In such event, the Agreement shall cease to have effect:
| (a) |
with respect to taxes withheld at |
| (b) |
with respect to other taxes on |
In witness whereof the undersigned,
duly authorized thereto have signed this Agreement.
Done at Jakarta this 27 day of
August
nineteen hundred and ninety six in duplicates in the Uzbek, Indonesian
and English languages, all texts being equally authentic. In case of
any divergence of interpretation, the English text shall prevail.
|
For the Government of the |
For the Government of the |