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CONVENTION BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE GOVERNMENT OF THE FRENCH REPUBLIC
FORTHE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL
EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL
Article 1
PERSONAL SCOPE
This Convention shall apply to persons who are residents of one or both of the
Contracting States.
Article 2
TAXES COVERED
1
.
This Convention shall apply to taxes on income and on capital imposed on behalf of
each Contracting State or of its political subdivisions or local authorities irrespective of
the manner in which they are levied.
!
.
There shall be regarded as taxes on income and on capital all taxes imposed on total
income on total capital or on elements of income or of capital including taxes on
gains from the alienation of movable or immovable property taxes on the total
amounts of wages or salaries paid by enterprises as well as taxes on capital
appreciation.
"
.
The existing taxes to which the Convention shall apply are#
$a% in the case of &ndonesia #
$1% the income tax'
$!% the corporation tax'
$"% the net wealth tax' including any withholding tax prepayment or advance
payment with respect to the aforesaid taxes and
$(% the tax on dividends interest and royalties
$)a*a+ atas ,unga -ividen dan Royalty%
$hereinafter refereed to as &ndonesian Tax%.
$b% in the case of France #
$1% the income tax'
$!% the corporation tax'
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including any withholding tax prepayment $precompte% or advance payment
with respect to the aforesaid taxes'
$hereinafter refereed to as French Tax%'
(.
The Convention shall apply also to any identical or substantially similar taxes which areimposed after the date of signature of this Convention in addition to or in place of
the existing taxes. The competent authorities of the Contracting States shall notify to
each other any substantial changes which have been made in their respective taxation
laws.
Article 3
GENERAL DEFINITIONS
1
.
&n this Convention unless the context otherwise re/uires #
$a% the terms one of the Contracting States and the other Contracting State mean
France or &ndonesia as the context re/uires'
$b% the term &ndonesia comprises the territory of the Republic of &ndonesia as
defined in its laws and parts of the continental shelf and ad*acent seas over
which the Republic of &ndonesia has sovereignty sovereign rights or other rights
in accordance with international law'
$c% the term France means the 0uropean and overseas departments of the French
Republic including the area outside the territorial sea ad*acent to thosedepartments which is in accordance with international law an area within which
France may exercise rights with respect to the sea bed and subsoil and their
natural resources'
$d% the term person comprises 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 terms enterprise of a Contracting State and enterprise of the other
Contracting State mean respectively an enterprise carried on by a resident of a
Contracting State and an enterprise carried on by a resident of the other
Contracting State'
$g% the term nationals means#
$1% all individuals possessing the nationality of a Contracting State'
$!% all legal persons partnerships and associations deriving their status as such
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from the law in force in a Contracting State'
$h% the term competent authority means#
$1% in the case of &ndonesia the 2inister of Finance or his authorisedrepresentative'
$!% in the case of France the 2inister of the ,udget or his authorised
representative.
!
.
3s regards the application of the Convention by a Contracting State any term not
otherwise defined shall unless the context otherwise re/uires have the meaning
which it has under the laws of that Contracting State relating to the taxes which are
the sub*ect of the Convention.
Article
FISCAL DOMICILE
1
.
For the purposes of this Convention the term resident of a Contracting State means
any person who under the law of that State is liable to taxation therein by reason of
his domicile residence place of management or any other criterion of a similar nature.
,ut this term does not include any person who is liable to tax in that Contracting State
in respect only of income from sources therein or capital situated in that State.
!
.
4here 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 Contracting State in which he has a
permanent home available to him. &f 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 closest $centre of vital
interests%'
$b% if the Contracting State in which he has his centre of vital interests cannot bedetermined 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'
$c% 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 /uestion by
mutual agreement.
"
.
4here 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
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Contracting State in which its place of effective management is situated. &f a place of
effective management is considered as situated in both Contracting States the
competent authorities of the Contracting States shall settle the /uestion by mutual
agreement.
Article !
PERMANENT ESTABLISHMENT
1
.
For the purposes of this Convention the term permanent establishment means a
fixed place of business in which the business of the enterprise is wholly or partly
carried on.
!
.
The term permanent establishment shall include especially#
$a% a place of management'
$b% a branch'
$c% an office'
$d% a factory'
$e% a wor+shop'
$f% a farm or plantation'
$g% a mine an oil well /uarry or other place of extraction of natural resources'
$h% a building site or construction or assembly pro*ect which exists for more than six
months.
"
.
The term permanent establishment shall not be deemed 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 stoc+ of goods or merchandise belonging to the enterprise
solely for the purpose of storage or display'
$c% the maintenance of a stoc+ of goods or merchandise belonging to the enterprise
solely for the purpose of processing by another enterprise'
$d% the maintenance of a fixed place of business solely for the purpose of purchasing
goods or merchandise or for collecting information for the enterprise'
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$e% the maintenance of a fixed place of business solely for the purpose of advertising
for the supply of information for scientific research or for similar activities which
have a preparatory or auxiliary character for the enterprise.
(
.
3 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 paragraph
5 applies shall be deemed to be a permanent establishment in the firstmentioned
State#
$a% 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
$b% if he habitually maintains in that State a stoc+ of goods or merchandise belongingto the enterprise from which he regularly fills orders on behalf of the enterprise.
6
.
3n enterprise of a Contracting State shall be deemed to have a permanent
establishment in the other Contracting State if it renders services to an enterprise of
that other Contracting State including supervisory activities connected with a building
site or a construction installation or assembly pro*ect through an employee or other
person other than an agent of independent status to whom paragraph 5 applies
when such employee or person is present in the other Contracting State for a period or
periods exceeding in the aggregate 17" days within a period of 1! months.
5
.
3n 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 bro+er general commission agent or any other agent of an
independent status where such persons are acting in the ordinary course of their
business 8owever 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 if it is proved that the
transactions between the agent and the enterprise are not made at arm9s length
conditions.
:
.
3n insurance enterprise of a Contracting State shall be deemed to have a permanent
establishment in the other Contracting State if it collects premiums in that other State
or insures ris+s situated therein through an employee or through a representative who
is not an agent of an independent status to whom paragraph 5 applies. This provision
shall not apply to reinsurance activities of such an enterprise.
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 whichcarries on business in that other State $whether through a permanent establishment or
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whether in the State in which the permanent establishment is situated or elsewhere.
(
.
&nsofar 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 ! 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 embodied in this 3rticle.
6
.
;o 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
.
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 yearunless there is good and sufficient reason to the contrary.
:
.
4here profits include items of income which are dealt with separately in other 3rticles
of this Convention then the provisions of those 3rticles shall not be affected by the
provisions of this 3rticle.
Article %
SHIPPING AND AIR TRANSPORT
1
.
)rofits derived by an enterprise from the operation of ships or aircraft in international
traffic shall be taxable only in the Contracting State of which the enterprise is a
resident.
!
.
The provisions of paragraph 1 shall also apply to profits derived by an enterprise from
the participation in a pool a *oint business or in an international operating agency but
only to so much of the profits so derived as is allocable to the participant in an
international *oint venture in proportion to its share in the *oint operation.
Article &
ASSOCIATED ENTERPRISES
4here#
$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
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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.
Article 1'
DIVIDENDS
1
.
-ividends 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.
!
.
8owever such dividends may be taxed in the Contracting State of which the company
paying the dividends is a resident and according to the law of that State but if the
recipient is the beneficial owner of the dividends the tax so charged shall not exceed#
$a% 1<= of the gross amount of the dividends if the recipient is a company whichowns directly at least !6= of the capital of the company paying the dividends'
$b% in all other cases 16= of the gross amount of the dividends.
"
.
The term dividends as used in this 3rticle means income from shares *ouissance
shares or *ouissance rights mining shares founders9 shares or other rights not
being debtclaims participating in profits as well as income from other corporate
rights which is sub*ected to the same taxation treatment as income from shares by the
taxation law of the State of which the company ma+ing the distribution is a resident.
(
.
The provisions of paragraphs 1 and ! shall not apply if the recipient 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 professional 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. &n
such a case the provisions of 3rticle : or 3rticle 1( as the case may be shall apply.
6
.
3 resident of &ndonesia who receives dividends paid by a company which is a resident
of France may obtain the refund of the prepayment $pr>compte% relating to such
dividends in the event it had been paid by the distributing company. Such prepayment
$pr>compte% shall be refunded sub*ect to the deduction of the tax levied according to
the national laws and the provisions of paragraph !. The gross amount of the
prepayment $pr>compte% refunded shall be deemed to be dividends for the purposes of
the provisions of this Convention.
5
.
4here a company resident of a Contracting State has in the other Contracting State a
permanent establishment the profits of this permanent establishment may afterhaving borne the corporation tax be liable to a tax the rate of which shall not exceed
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1<= according to the laws of that other Contracting State.
Article 11
INTEREST
1
.
&nterest arising in a Contracting State and paid to a resident of the other Contracting
State may be taxed in that other State.
!
.
8owever such interest may be taxed in the Contracting State in which it arises and
according to the law of that State but if the recipient is the beneficial owner of the
interest the tax so charged shall not exceed 16= of the amount of the interest.
"
.
;otwithstanding the provisions of paragraph ! of this 3rticle the tax charged by the
Contracting State in which the interest arises shall not exceed 1<= of the amount of
the interest if#
$a% the interest is paid by a ban+ a financial institution or by an enterprise the
activities of which are mainly carried on in the fields of agriculture plantation
forestry fishery mining manufacturing industries transportation low cost
housing pro*ects tourism and infrastructure and
$b% the interest is paid to a ban+ or to another enterprise.
(
.
;otwithstanding the provisions of paragraph ! of this 3rticle interest arising in a
Contracting State shall be taxable only in the other Contracting State if it is paid#
$a% to that other Contracting State or to a statutory body thereof or
$b% to an enterprise of that other Contracting State on loans or credits granted with
the participation of a financing public institution of that other State and with the
consent of the 2inister in charge of financial or economic affairs or of planning of
the firstmentioned Contracting State in connection with the sale of any industrial
or scientific e/uipment or with the survey the installation or the supply of
industrial or scientific premises or of public wor+s.
6
.
The term interest as used in this 3rticle means income from debtclaims of every
+ind whether or not secured by mortgage and whether or not carrying a right to
participate in the debtor9s profits and in particular income from government securities
and income from bonds or debentures including premiums and pri?es attaching bonds
or debentures.
5
.
The provisions of paragraphs 1 ! " and ( shall not apply if the recipient 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
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situated therein or performs in that other State professional services from a fixed
base situated therein and the debtclaim in respect of which the interest is paid is
effectively connected with such permanent establishment or fixed base. &n such a
case the provisions of 3rticle : or 3rticle 1( as the case may be shall apply.
:
.
&nterest shall be deemed to arise in a Contracting State when the payer is that State
itself a political subdivision a local authority a statutory body thereof or a resident of
that State. 4here 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 in
connection with which the indebtedness on which the interest is paid was incurred and
such interest is borne by such permanent establishment then such interest shall be
deemed to arise in the Contracting State in which the permanent establishment is
situated.
7
.
4here owing to a special relationship between the payer and the recipient or between
both of them and some other person the amount of the interest paid 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 recipient in the absence of such relationship the provisions
of this 3rticle shall apply only to the lastmentioned amount. &n that 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 Convention.
Article 12
RO#ALTIES
1
.
Royalties arising in a Contracting State and paid to a resident of the other Contracting
State may be taxed in that other State.
!
.
8owever such royalties may be taxed in the Contracting State in which they arise and
according to the law of that State but if the recipient is the beneficial owner of the
royalties the tax so charged shall not exceed 1<= of the amount of the royalties.
"
.
The term royalties as used in this 3rticle means payments of any +ind received as a
consideration for the use of or the right to use any copyright of literary artistic or
scientific wor+ including cinematograph films and wor+s recorded for broadcasting or
television any patent trade mar+ design or model plan secret formula or process or
for information concerning industrial commercial or scientific experience.
(
.
The provisions of paragraphs 1 and ! shall not apply if the recipient 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 professional services from a fixed base situated
therein and the right or property in respect of which the royalties are paid iseffectively connected with such permanent establishment or fixed base. &n such a
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case the provisions of 3rticle : or 3rticle 1( as the case may be shall apply.
6
.
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. 4here
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 in connection with
which the obligation to pay the royalties was incurred and those royalties are borne by
that permanent establishment then such royalties shall be deemed to arise in the
Contracting State in which the permanent establishment is situated.
5
.
4here owing to a special relationship between the payer and the recipient or between
both of them and some other person the amount of the royalties paid 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 recipient in the absence of suchrelationship the provisions of this 3rticle shall apply only to the lastmentioned
amount. &n that 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 Convention.
Article 13
CAPITAL GAINS
1
.
@ains from the alienation of immovable property as defined in paragraph ! of 3rticle
5 or from the alienation of shares or comparable interest in a real property
cooperative or in a company the assets of which consist principally of immovable
property may be taxed in the Contracting State in which such property is situated.
!
.
@ains 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 professional services including such gains from the alienation of such a
permanent establishment $alone or together with the whole enterprise% or of such a
fixed base may be taxed in the other State. 8owever gains from the alienation of
movable property of the +ind referred to in paragraph " of 3rticle !" shall be taxable
only in the Contracting State in which such movable property is taxable according to
the said 3rticle.
"
.
@ains from the alienation of any property other than those mentioned in paragraphs 1
and ! shall be taxable only in the Contracting State of which the alienator is a
resident.
Article 1INDEPENDENT PERSONAL SERVICES
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Article 1$
ARTISTES AND ATHLETES
1
.
;otwithstanding the provisions of 3rticles 1( and 16 income derived by entertainers
such as theatre motion picture radio or television artistes and musicians and by
athletes from their personal activities as such may be taxed in the Contracting State in
which these activities are exercised.
!
.
4here income in respect of personal activities as such of an entertainer or athlete
accrues not to that entertainer or athlete himself but to another person that income
may notwithstanding the provisions of 3rticles : 1( and 16 be taxed in the
Contracting State in which the activities of the entertainer or athlete are exercised.
"
.
;otwithstanding the provisions of paragraph 1 remunerations or profits and wages
salaries and other similar income derived by entertainers and athletes from theirpersonal activities as such in a Contracting State shall be taxable only in the other
Contracting State if their visit to the first Contracting State is supported substantially
from the public funds of that other Contracting State one of its political subdivisions or
local authorities or of a statutory body thereof.
(
.
;otwithstanding the provisions of paragraph ! where income in respect of personal
activities as such of entertainers and athletes in a Contracting State accrues not to
that entertainer or athlete himself but to another person notwithstanding the
provisions of 3rticles : 1( and 16 that income shall be taxable only in the other
Contracting State if this person is supported substantially from the public funds of that
other Contracting State one of its political subdivisions or local authorities or of a
statutory body thereof.
Article 1%
PENSIONS
1
.
Sub*ect to the provisions of paragraph ! of 3rticle 1A pensions and other similar
remuneration paid to a resident of a Contracting State in consideration of past
employment shall be taxable only in that State.
!
.
;otwithstanding the provisions of paragraph 1 social security pensions paid by a social
security instrumentality of a Contracting State shall be taxable only in that Contracting
State.
Article 1&
GOVERNMENT SERVICE
1
.
$a% Remuneration other than a pension paid by a Contracting State or one of its
political subdivisions or local authorities or by a statutory body thereof to any
individual in respect of services rendered to that State or subdivision or local
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authority or statutory body shall be taxable only in that State.
$b% 8owever such remuneration shall be taxable only in the other Contracting State if
the services are rendered in that State and the recipient is a resident and also a
national of that State.
!
.
3ny pensions paid by or out of funds created by a Contracting State or one of its
political subdivisions or local authorities or by a statutory body thereof to any
individual in respect of services rendered to that State or subdivision or local authority
or statutory body shall be taxable only in that State.
"
.
The provisions of 3rticles 16 and 15 shall apply to remuneration in respect of services
rendered in connection with any business carried on by a Contracting State or one of
its political subdivisions or a local authority or a statutory body thereof.
Article 2'
STUDENTS
1
.
)ayments which a student or business apprentice who is or was formerly a resident 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 are made to him from sources outside that other State.
!
.
;otwithstanding the provisions of paragraph 1 remuneration which a student or
business apprentice who is or was formerly a resident of a Contracting State and who
is present in the other Contracting State solely for the purpose of his education or
training derives from services rendered in that other State shall not be taxed in that
other State provided that such services are in connection with his education or training
or that the remuneration of such services is necessary to supplement the resources
available to him for the purpose of his maintenance.
Article 21
TEACHERS AND RESEARCHERS
1
.
3 teacher or a researcher who resident of a Contracting State visits the other
Contracting State for the purpose of teaching or engaging in research shall be exempt
from tax in that other Contracting State for a period not exceeding two years on
remuneration in respect of such activities.
!
.
This 3rticle shall not apply to income from research if such research is underta+en not
in the public interest but primarily for the private benefit of a specific person or
persons.
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Article 22
OTHER INCOME
1
.
&tems of income of a resident of a Contracting State wherever arising not dealt with
in the foregoing articles of this Convention shall be taxable only in that State.
!
.
The provisions of paragraph 1 shall not apply if the recipient of the 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
professional 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. &n such a case the provisions of 3rticle : or 3rticle 1( as
the case may be shall apply.
Article 23
CAPITAL
1
.
Capital represented by immovable property as defined in paragraph ! of 3rticle 5
may be taxed in the Contracting State in which such property is situated.
!
.
Capital represented by movable property forming part of the business property of a
permanent establishment of an enterprise or by movable property pertaining to a
fixed base used for the performance of professional services may be taxed in the
Contracting State in which the permanent establishment or fixed base is situated.
"
.
Ships and aircraft operated in international traffic by an enterprise and movable
property pertaining to the operation of such ships and aircraft shall be taxable only in
the Contracting State of which the enterprise is a resident.
(
.
3ll other elements of capital of a resident of a Contracting State shall be taxable only
in that State.
Article 2
METHOD FOR ELIMINATION OF DOUBLE TAXATION
-ouble taxation shall be avoided in the following manner #
1
.
&n the case of &ndonesia#
$a% &ndonesia may include in the basis upon which taxes referred to in 3rticle !
paragraph "$b% are imposed the items of income or capital which according to
the provisions of this Convention may be taxed in France.
$b% Sub*ect to the provisions of subparagraph $c% below &ndonesia shall allow a
reduction from the tax computed in conformity with subparagraph $a% e/ual to
such part of that tax which bears the same proportion to the aforesaid tax as thepart of the income or capital which is included in the basis of that tax and may be
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taxed in France according to the provisions of this Convention bears to the total
income or capital which forms the basis for &ndonesian tax.
$c% 4here a resident of &ndonesia derives income which in accordance with the
provisions of 3rticle 1< paragraph ! 3rticle 11 paragraphs ! and " or 3rticle 1!
paragraph ! may be taxed in France &ndonesia shall allow as a deduction from
the &ndonesian tax on the income of that person an amount e/ual to the tax paid
in France on that income. Such deduction shall however not exceed that part of
the &ndonesian tax computed in conformity with subparagraph $a% which is
appropriate to the income derived from France.
$d% 4here a resident of &ndonesia derives gains which may be taxed in France in
accordance with the provisions of 3rticle 1" &ndonesia shall allow a deduction
from its tax on such gains e/ual to the tax paid in France.
!
.
&n the case of France#
$a% &ncome other than that referred to in subparagraph $b% below shall be exempt
from the French taxes referred to in subparagraph $a% of paragraph " of 3rticle !
if the income is taxable in &ndonesia under this Convention.
$b% &ncome referred to in 3rticles 1< 11 1! 1( 15 and 1: received from &ndonesia
may be taxed in France. The &ndonesian tax levied on such income entitles
residents of France to a tax credit corresponding to the amount of &ndonesian tax
levied but which shall not exceed the amount of French tax levied on such
income. Such credit shall be allowed against taxes referred to in subparagraph
$a% of paragraph " of 3rticle ! in the bases of which such income is included.
$c% ;otwithstanding the provisions of subparagraphs $a% and $b% above French tax is
computed on income chargeable in France by virtue of this Convention at the rate
appropriate to the total of the income chargeable in accordance with the French
law.
$d% &n the cases where &ndonesian tax levied on dividends interest or royalties is
wholly relieved or reduced below the rates provided for in 3rticle 1< paragraph !
$a% for dividends in 3rticle 11 paragraph " for interest or 3rticle 1! paragraph !
for royalties by special incentive measures under &ndonesian law designed to
promote economic development in &ndonesia the credit referred to in sub
paragraph $b% above shall be e/ual to the rate of tax provided for as regards
dividends in 3rticle 1< paragraph !$a% as regards interest in 3rticle 11
paragraph " and as regards royalties in 3rticle 1! paragraph !.
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Article 2!
NON)DISCRIMINATION
1
.
The nationals of a Contracting State who are residents of one of the Contracting
States shall not be sub*ected in the other Contracting State to any taxation or any
re/uirement connected therewith which is other or more burdensome than the
taxation and connected re/uirements to which nationals of that other State in the
same circumstances are or may be sub*ected.
!
.
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 reliefs and
reductions for taxation purposes on account of civil status or family responsibilitieswhich it grants to its own residents.
"
.
0nterprises 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 sub*ected in the firstmentioned Contracting State to any taxation
or any re/uirement connected therewith which is other or more burdensome than the
taxation and connected re/uirements to which other similar enterprises of that first
mentioned State are or may be sub*ected.
(
.
&n this 3rticle the term taxation means taxes which are the sub*ect of this
Convention.
Article 2"
MUTUAL AGREEMENT PROCEDURE
1
.
4here 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 Convention he may notwithstanding the remedies provided by the national laws
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 3rticle !6 to that
of the Contracting State of which he is a national. This case must be presented within
three years of the first notification of the action giving rise to taxation not in
accordance with the Convention.
!
.
The competent authority shall endeavour if the ob*ection appears to it to be *ustified
and if it is not itself able to arrive at an appropriate 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 Convention.
" The competent authorities of the Contracting States shall endeavour to resolve by
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. mutual agreement any difficulties arising as to the application of the Convention. They
may also consult together for the elimination of double taxation in cases not provided
for in the Convention.
(
.
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. 4hen it seems advisable in order to reach agreement to have an oral
exchange of opinions such exchange may ta+e place through a Commission consisting
of the representatives of the competent authorities of the Contracting States.
6
.
The competent authorities of the Contracting States shall by mutual agreement settle
the mode of application of this Convention and especially the re/uirements to which
the residents of a Contracting State shall be sub*ected in order to obtain in the other
Contracting State tax reliefs or exemptions on income referred to in 3rticles 1< 11and 1! received from that other Contracting State.
Article 2$
EXCHANGE OF INFORMATION
1
.
The competent authorities of the Contracting States shall exchange such information
as is necessary for the carrying out of this Convention and of the domestic laws of the
Contracting States concerning taxes covered by this Convention insofar as the taxation
thereunder is in accordance with this Convention. 3ny information so exchanged shall
be treated as secret and shall not be disclosed to any persons or authorities other than
those $including a court or administrative body% concerned with the assessment
collection or enforcement in respect of taxes which are the sub*ect of this Convention
or with the prosecution claims and appeals relating thereto.
!
.
&n no case shall the provisions of paragraph 1 be construed so as to impose on one of
the Contracting States the obligation#
$a% to carry out administrative measures at variance with the laws or the
administrative practice of that or of the other Contracting State'
$b% to supply particulars which are 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 2%
DIPLOMATIC AND CONSULAR OFFICIALS
1 ;othing in this Convention shall affect the fiscal privileges of members of diplomatic
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. missions and their personal domestic staff of members of consular missions or of
members of permanent missions under the general rules of international law or under
the provisions of special agreements.
!
.
;otwithstanding the provisions of 3rticle ( an individual who is a member of a
diplomatic or consular or permanent mission of a Contracting State which is situated in
the other Contracting State or in a third State shall be deemed for the purposes of this
Convention to be a resident of the sending State if#
$a% in accordance with international law he is not taxable in the receiving State on
income from sources outside that State' and
$b% he is liable in the sending State to the same obligations in relation to tax on his
total world income as are residents of that sending State.
"
.
This Convention shall not apply to international organisations to organs and officials
thereof and to persons who are members of a diplomatic or consular or permanent
mission of a third State being present in a Contracting State and not treated in either
Contracting State as residents in respect of taxes on income and capital.
Article 2&
TERRITORIAL SCOPE
1
.
This Convention may be extended either in its entirety or with any necessary
modifications to the overseas territories of the French Republic which impose taxes
substantially similar in character to those to which the Convention applies. 3ny such
extension shall ta+e effect from such date and sub*ect to such modifications and
conditions including conditions as to termination as may be specified and agreed
between the Contracting States in notes to be exchanged through diplomatic channels
or in any other manner in accordance with their constitutional procedures.
!
.
Bnless otherwise agreed by both Contracting States the denunciation of the
Convention by one of them under 3rticle "1 shall terminate in the manner provided
for in that 3rticle the application of the Convention to any territory to which it has
been extended under this 3rticle.
Article 3'
ENTR# INTO FORCE
1
.
0ach Contracting State shall notify to the other the completion of the procedure
re/uired by its law for the bringing into force of this Convention. This Convention shall
enter into force one month after the date of the later of these notifications.
! &ts provisions shall apply for the first time#
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. $a% as regards taxes withheld at source on dividends interest and royalties to
amounts payable on or after the date of entry into force of this Convention'
$b% as regards other taxes on income to income derived during the calendar year in
which the Convention entered into force or relating to the accounting period
ending during the year'
$c% as regards taxes on capital to capital for the calendar year in which the
Convention entered into force.
Article 31
TERMINATION
1
.
This Convention shall remain in force indefinitely. 8owever after 1A71 each
Contracting State may by giving at least six months9 written notice of terminationthrough diplomatic channels denounce the Convention as of the end of a calendar
year.
!
.
&n such an event its provisions shall apply for the last time #
$a% as regards taxes withheld at source to sums payable before or on "1 -ecember
of the calendar year for the end of which the termination has been notified'
$b% as regards other taxes on income to income derived during the calendar year for
the end of which the termination has been notified or relating to the accounting
period ending during this year'
$c% as regards taxes on capital to capital taxable for the calendar year for the end of
which the termination has been notified.
&n witness whereof the undersigned duly authorised thereto by their respective
@overnments have signed this Convention.
-one in duplicate at a+arta this fourteenth day of September 1A:A in the French and
&ndonesian languages both texts being e/ually authoritative.
For the @overnment of
the Republic of &ndonesia
For the @overnment of
the French Republic
PROTOCOL
3t the time of signature of the Convention between the @overnment of the French
Republic and the @overnment of the Republic of &ndonesia for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on income and on
capital the undersigned have agreed upon the following provision which is an integralpart of this Convention.
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&t is understood that profits from the operation of ships in the meaning of 3rticle 7 can
only be derived by an enterprise which carries out shipping business on its own account
and responsibility.
&n witness whereof the undersigned have signed the present )rotocol which shall have
the same force and validity as if it were inserted word by word in the Convention.
-one at a+arta this fourteenth day of September 1A:A in duplicate in the French and
&ndonesian languages both texts being e/ually authoritative.
For the @overnment of
the Republic of &ndonesia
For the @overnment of
the French Republic
AGREEMENT BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE GOVERNMENT OF THE C*ECH REPUBLIC
FOR
THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL
EVASION WITH RESPECT TO TAXES ON INCOME
Article 1
PERSONAL SCOPE
This 3greement shall apply to persons who are residents of one or both of the
Contracting States.
Article 2TAXES COVERED
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1. This 3greement shall apply to taxes on income imposed on behalf of each
Contracting State or of its political subdivisions or local authorities irrespective of
the manner in which they are levied.
!. 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 taxes on the total amounts of wages or salaries paid by
enterprises.
". The existing taxes to which the 3greement shall apply are#
(a) in Indonesia :
the income tax imposed under the Undang-undang Pajak Penghasilan 1984 (a!
"o# $ o% 198&)' except the income tax paid under production sharing contracts'
contracts o% !orks and other similar contracts in the oil and gas sector' and other
mining sectors
(hereina%ter re%erred to as Indonesian tax)
(*) in the +,ech epu*lic :
-- the tax on income o% indi.iduals
-- the tax on income o% legal persons
-- the tax on immo.a*le propert/
(hereina%ter re%erred to as +,ech tax)#
(. This 3greement shall also apply to any identical or substantially similar taxes on
income which are imposed after the date of signature of this 3greement inaddition to or in place of the existing taxes. The competent authorities of the
Contracting States shall notify to each other any significant changes which have
been made in their respective taxation laws.
Article 3
GENERAL DEFINITIONS
1. &n this 3greement unless the context otherwise re/uires#
(a) the term Indonesia comprises the territor/ o% the epu*lic o% Indonesia as
de%ined in its la!s and the adjacent areas o.er !hich the epu*lic o% Indonesia
has so.ereign rights or jurisdiction in accordance !ith the pro.isions o% theUnited "ations +on.ention on the a! o% the 0ea' 198
(*) the term +,ech means the +,ech epu*lic
(c) the terms a +ontracting 0tate and the other +ontracting 0tate mean the +,ech
epu*lic and Indonesia as the context re2uires
(d) the term person comprises an indi.idual' a compan/ and an/ other *od/ o%
persons
(e) the term compan/ means an/ *od/ corporate or an/ entit/ !hich is treated as a
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*od/ corporate %or tax purposes
(%) the terms enterprise o% a +ontracting 0tate and enterprise o% the other
+ontracting 0tate mean' respecti.el/' an enterprise carried on */ a resident o% a
+ontracting 0tate and an enterprise carried on */ a resident o% the other
+ontracting 0tate
(g) the term national means:
(i) an/ indi.idual possessing the nationalit/ o% a +ontracting 0tate
(ii) an/ legal person' partnership and association deri.ing its status as
such %rom the la! in %orce in a +ontracting 0tate
(h) the term international tra%%ic means an/ transport */ a ship or aircra%t operated
*/ an enterprise o% a +ontracting 0tate except !hen the ship or aircra%t is operated
solel/ *et!een places in the other +ontracting 0tate
(i) the term competent authorit/ means:
(i) in the case o% Indonesia' the 3inister o% inance or his authori,ed
representati.e#
(ii) in the case o% the +,ech epu*lic' the 3inister o% inance o% the
+,ech epu*lic or his authori,ed representati.e#
!. &n the application of this 3greement by a Contracting State any term nototherwise defined shall unless the context otherwise re/uires have the meaning
which it has under the laws of that Contracting State relating to the taxes which
are the sub*ect of this 3greement.
Article
RESIDENT
1. For the purposes of this 3greement the term resident of a Contracting State
means any person who under the law of that State is liable to taxation therein
by reason of his domicile residence place of management or any other criterion
of a similar nature.
!. 4here by reason of the provisions of paragraph 1 an individual is a resident of
both Contracting States then his status shall be determined in accordance with
the following rules#
(a) he shall *e deemed to *e a resident o% the +ontracting 0tate in !hich he has a
permanent home a.aila*le to him# I% he has a permanent home a.aila*le to him in
*oth +ontracting 0tates' he shall *e deemed to *e a resident o% the +ontracting
0tate !ith !hich his personal and economic relations are closer (centre o% .ital
interests)
(*) i% the +ontracting 0tate in !hich he has his centre o% .ital interests cannot *e
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determined' or i% he has not a permanent home a.aila*le to him in either
+ontracting 0tate' he shall *e deemed to *e a resident o% the +ontracting 0tate in
!hich he has an ha*itual a*ode
(c) i% he has an ha*itual a*ode in *oth +ontracting 0tates or in neither o% them' the
competent authorities o% the +ontracting 0tates shall settle the 2uestion */ mutualagreement#
". 4here 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 Contracting States shall settle the /uestion by mutual agreement.
Article !
PERMANENT ESTABLISHMENT
1. For the purposes of this 3greement the term permanent establishment means a
fixed place of business through which the business of an enterprise is wholly orpartly carried on.
!. The term permanent establishment shall include especially#
(a) a place o% management
(*) a *ranch
(c) an o%%ice
(d) a %actor/
(e) a !orkshop
(%) a mine' an oil or gas !ell' a 2uarr/ or other place o% extraction o% natural
resources#
". The term permanent establishment li+ewise encompasses#
(a) a *uilding site' a construction' assem*l/ or installation project or super.isor/
acti.ities in connection there!ith' *ut onl/ !here such site' project or acti.ities
continue %or a period o% more than 5 (six) months
(*) the %urnishing o% ser.ices' including consultanc/ */ an enterprise through
emplo/ees or the personnel engaged */ the enterprise %or such purpose' *ut onl/
!here acti.ities o% that nature continue (%or the same or a connected project)
!ithin the countr/ %or a period or periods aggregating more than & (three) months
!ithin an/ t!el.e-month period#
(. ;otwithstanding the preceding provisions of this 3rticle the term permanent
establishment shall be deemed not to include#
(a) the use o% %acilities solel/ %or the purpose o% storage or displa/ o% goods or
merchandise *elonging to the enterprise
(*) the maintenance o% a stock o% goods or merchandise *elonging to the enterprise
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solel/ %or the purpose o% storage or displa/
(c) the maintenance o% a stock o% goods or merchandise *elonging to the enterprise
solel/ %or the purpose o% processing */ another enterprise
(d) the maintenance o% a %ixed place o% *usiness solel/ %or the purpose o% purchasinggoods or merchandise' or %or collecting in%ormation' %or the enterprise
(e) the maintenance o% a %ixed place o% *usiness solel/ %or the purpose o% ad.ertising'
%or the suppl/ o% in%ormation' %or scienti%ic research or %or similar acti.ities !hich
ha.e a preparator/ or auxiliar/ character' %or the enterprise#
6. ;otwithstanding the provisions of paragraphs 1 and ! where a person other
than an agent of an independent status to whom paragraph : 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 firstmentioned State in respect of any activities which that person underta+es for the
enterprise if such a person 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 ( which if exercised
through a fixed place of business would not ma+e this fixed place of business a
permanent establishment under the provisions of that paragraph.
5. 3n 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 ris+s
situated therein through an employee or through a representative who is not an
agent of an independent status within the meaning of paragraph :.
:. 3n 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 bro+er general commission agent or any
other agent of an independent status provided that such persons are acting in
the ordinary course of their business. 8owever when the activities of such an
agent are devoted wholly or almost wholly on behalf of that enterprise he will not
be considered an agent of an independent status within the meaning of this
paragraph.
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 or otherwise% shall not of itself ma+e either company a permanent
establishment of the other.
Article "
INCOME FROM IMMOVABLE PROPERT#
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1. &ncome from immovable property including income from agriculture or forestry
may be taxed in the Contracting State in which such property is situated.
!. $a% The term immovable property shall sub*ect to the provisions of subparagraphs
$b% and $c% be defined in accordance with the law of the Contracting State in
which the property in /uestion is situated.
$b% The term immovable property shall in any case include property accessory to
immovable property livestoc+ and e/uipment used in agriculture and forestry
rights to which the provisions of general law respecting immovable property
apply usufruct of immovable property and rights to variable or fixed payments as
consideration for the wor+ing of or the right to wor+ mineral deposits sources
and other natural resources.
$c% Ships and aircraft shall not be regarded as immovable property.
". The provisions of paragraph 1 shall also apply to income derived from the direct
use letting or use in any other form of immovable property.
(. The provisions of paragraphs 1 and " 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 $
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. &f 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 esta*lishment
(*) sales in that other 0tate o% goods or merchandise o% the same or similar kind as
those sold through that permanent esta*lishment or
(c) other *usiness acti.ities carried on in that other 0tate o% the same or similar kind
as those e%%ected through that permanent esta*lishment#
!. Sub*ect to the provisions of paragraph " 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 ma+e
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.
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". &n 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. 8owever no such deduction shall be allowed in respect of amountsif 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 ban+ing enterprise by way of
interest on moneys lent to the permanent establishment. Di+ewise no account
shall be ta+en 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 enterpriseor 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 ban+ing
enterprise by way of interest on moneys lent to the head office of the enterprise
or any of its other offices.
(. &n 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 !
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 3rticle.
6. ;o profits shall be attributed to a permanent establishment by reason of the mere
purchase by that permanent establishment of goods or merchandise for the head
office of the enterprise.
5. 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.
:. 4here profits include items of income which are dealt with separately in other
3rticles of this 3greement then the provisions of those 3rticles shall not be
affected by the provisions of this 3rticle.
Article %
SHIPPING AND AIR TRANSPORT
1. )rofits of an enterprise of a Contracting State from the operation of ships or
aircraft in international traffic shall be taxable only in that State.
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!. The provisions of paragraph 1 shall also apply to profits from participation in a
pool a *oint business or an international operating agency.
Article &
ASSOCIATED ENTERPRISES
4here#
$a% an enterprise of a Contracting State participates directly or indirectly in the
management control or capital of an enterprise of the other Contracting State or
$b% the same persons participate directly or indirectly in the management control or
capital of an enterprise of a Contracting State and an enterprise of the other
Contracting State
and in either case conditions are made or imposed between the two enterprises in their
commercial or financial relations which differ from those which would be made between
independent enterprises then any profits which would but for those conditions have
accrued to one of the enterprises but by reason of those conditions have not so
accrued may be included in the profits of that enterprise and taxed accordingly.
Article 1'
DIVIDENDS
1. -ividends declared by a company which is a resident of a Contracting State
derived by a resident of the other Contracting State may be taxed in that other
State.
!. 8owever such dividends may also be taxed in the Contracting State of which the
company paying the dividends is a resident and according to the laws of that
State but if the recipient is the beneficial owner of the dividends the tax so
charged shall not exceed#
(a) 16 per cent o% the gross amount o% the di.idends i% the *ene%icial o!ner is a
compan/ !hich holds directl/ at least 6 per cent o% the capital o% the pa/ing
compan/
(*) 17 per cent o% the gross amount o% the di.idends in all other cases#
". The provisions of 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 3rticle means income from shares or other
rights not being debtclaims participating in profits as well as income from
other corporate rights which is sub*ect to the same taxation treatment as income
from shares by the taxation law of the State of which the company ma+ing the
distribution is a resident.
6. The provisions of paragraph ! shall not apply if the beneficial owner of the
dividends being a resident of a Contracting State carries on business in the
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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. &n such case the provisions of3rticle : or 3rticle 1( as the case may be shall apply.
5. 4here 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 sub*ect the company9s undistributed
profits to a tax on the company9s undistributed profits even if the dividends paid
or the undistributed profits consist wholly or partly of profits or income arising in
such other State.
:. ;otwithstanding any other provisions of this 3greement 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 sub*ected
to an additional tax in that other State in accordance with its law but the
additional tax so charged shall not exceed 1!.6 per cent of the amount of such
profits after deducting therefrom income tax and other taxes on income imposed
thereon in that other State.
7. The provisions of paragraph : of this 3rticle shall not affect the provisions
contained in any production sharing contracts and contracts of wor+ $or any other
similar contracts% relating to oil and gas sector or other mining sector.
Article 11
INTEREST
1. &nterest arising in a Contracting State and derived by a resident of the other
Contracting State may be taxed in that other State.
!. 8owever 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 1!.6 per cent
of the gross amount.
The competent authorities of the Contracting States shall by mutual agreement
settle the mode of application of this limitation.
". ;otwithstanding the provisions of paragraph ! interest arising in a Contracting
State and derived by the @overnment of the other Contracting State including
local authorities thereof the Central ,an+ or any financial institution controlled by
that @overnment shall be exempt from tax in the firstmentioned State.
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(. For the purposes of paragraph " the terms the Central ,an+ and financial
institution controlled by that @overnment mean#
(a) in the case o% Indonesia:
(i) the ank Indonesia (the +entral ank o% Indonesia)
(ii) such other %inancial institution' the capital o% !hich is !holl/ o!ned */ the
o.ernment o% the epu*lic o% Indonesia' as ma/ *e agreed upon %rom time
to time *et!een the o.ernment o% the +ontracting 0tates#
(*) in the case o% the +,ech epu*lic:
(i) the +,ech 0tate ank (the +entral ank o% the +,ech epu*lic)
(ii) such other %inancial institution' the capital o% !hich is !holl/ o!ned */ the
o.ernment o% the epu*lic o% Indonesia' as ma/ *e agreed upon %rom timeto time *et!een the o.ernment o% the +ontracting 0tates#
6. The term interest as used in this 3rticle means income from debtclaims of
every +ind whether or not secured by mortgage and whether or not carrying a
right to participate in the debtor9s profits and in particular income from
government securities and income from bonds or debentures including premiums
and pri?es attaching to such securities bonds or debentures as well as income
assimilated to income from money lent by the taxation law of the State in which
the income arises.
5. The provisions of paragraphs 1 and ! 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
services from a fixed base situated therein and the debtclaim in respect of
which the interest is paid is effectively connected with a% such permanent
establishment or fixed base or with b% business activities referred to under $c% of
paragraph 1 of 3rticle :. &n such case the provisions of 3rticle : or 1( as the
case may be shall apply.:. &nterest 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. 4here 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. 4here 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
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interest having regard to the debtclaim 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 3rticle shall apply only to the
lastmentioned amount. &n such case the excess part of the payments shall
remain taxable according to the laws of each Contracting State due regard beinghad to the other provisions of this 3greement.
Article 12
RO#ALTIES
1. Royalties arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in that other State.
!. 8owever 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 1!.6 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.
". The term royalties as used in this 3rticle means payments of any +ind received
as a consideration for the use of or the right to use any copyright of literary
artistic or scientific wor+ including cinematograph films or films or tapes for radio
or television broadcasting any patent trade mar+ design or model plan secret
formula or process or for the use of or the right to use industrial commercial
or scientific e/uipment or for information concerning industrial commercial or
scientific experience.(. The provisions of paragraphs 1 and ! shall not apply if the beneficial owner of the
royalties being a resident of a Contracting State carries on a 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#
(a) such permanent esta*lishment or %ixed *ase' or !ith
(*) *usiness acti.ities re%erred to under (c) o% paragraph 1 o% rticle $#6.
5. &n such case the provisions of 3rticle : or 3rticle 1( as the case may be shall
apply.
:. Royalties shall be deemed to arise in a Contracting State when the payer is that
Contracting State itself a political subdivision a local authority or a resident of
that Contracting State. 4here 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 fixed base in connection with which the liability to
pay the royalties was incurred and such royalties are borne by such permanent
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establishment or fixed base then such royalties shall be deemed to arise in the
Contracting State in which the permanent establishment or fixed base is situated.
7. 4here 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 3rticle
shall apply only to the lastmentioned amount. &n 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 3greement.
Article 13
CAPITAL GAINS
1. @ains from the alienation of immovable property as defined in paragraph ! of
3rticle 5 may be taxed in the Contracting State in which such immovable property
is situated.
!. @ains 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 permanent establishment $alone or together with the
whole enterprise% or of such fixed base may be taxed in the other State.". @ains derived by a resident of a Contracting State from the alienation of aircraft
or ships operated in international traffic or movable property pertaining to the
operation of such aircraft or ships shall be taxable only in that State.
(. @ains 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 1
INDEPENDENT PERSONAL SERVICES
1. &ncome 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 if he is present in
that other State for a period or periods exceeding in the aggregate A1 days in any
taxable year. &f he has such a fixed base or remains in that other State for the
aforesaid period or periods the income may be taxed in the 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.
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!. The term professional services includes especially independent scientific
literary artistic educational or teaching activities as well as the independent
activities of physicians engineers lawyers dentists architects and accountants.
Article 1!
DEPENDENT PERSONAL SERVICES
1. Sub*ect to the provisions of 3rticles 15 17 1A and !< 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. &f the employment is so exercised such
remuneration as is derived therefrom may be taxed in that other State.
!. ;otwithstanding 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 firstmentioned State if#
(a) the recipient is present in the other 0tate %or a period or periods not exceeding in
the aggregate 18& da/s !ithin an/ t!el.e month period' and
(*) the remuneration is paid */' or on *ehal% o%' an emplo/er !ho is not a resident o%
the other 0tate' and
(c) the remuneration is not *orne */ a permanent esta*lishment or a %ixed *ase !hich
the emplo/er has in the other 0tate#
". ;otwithstanding the preceding provisions of this 3rticle 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 in
that State.
Article 1"
DIRECTORS( FEE
-irectors9 fees and similar payments derived by a resident of a Contracting State in his
capacity as a member of the board of directors or another similar organ of a company
which is a resident of the other Contracting State may be taxed in that other State.
Article 1$
ARTISTES AND ATHLETES
1. ;otwithstanding the provisions of 3rticles 1( and 16 income derived by public
entertainers such as theatre motion picture radio or television artistes and
musicians and by athletes from their personal activities as such may be taxed in
the Contracting State in which these activities are exercised.
!. 4here 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
3rticles : 1( and 16 be taxed in the Contracting State in which the activities ofthe entertainer or athlete are exercised.
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". ;otwithstanding the provisions of paragraphs 1 and ! 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 localauthority or public institution thereof.
Article 1%
GOVERNMENT SERVICES
a% Remuneration other than a pension paid by a Contracting State or a local authority thereof to an individual
respect of services rendered to that State or local authority shall be taxable in that State.
$b% 8owever such remuneration shall be taxable only in the other Contracting State if the services are rendered
that other State and the individual is a resident of that State who#
$i% is a national of that State' or
$ii% did not become a resident of that State solely for the purpose of rendering the services.
a% 3ny pension paid by or out of funds created by a Contracting State or a local authority thereof to an individ
in respect of services rendered to that State or authority shall be taxable only in that State.
$b% 8owever such pension shall be taxable only in the other Contracting State if the individual is a resident of an
national of that other State.
he provisions of 3rticles 16 15 and 17 shall apply to remuneration and pensions in respect of services rendered
onnection with a business carried on by a Contracting State or a local authority thereof.
Article 1&
PENSIONS
1. Sub*ect to the provisions of paragraph ! of 3rticle 17 any pensions and other
similar remuneration paid to a resident of a Contracting State 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 asource 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 ma+e the payments in return for ade/uate and full consideration in
money9s worth.
Article 2'
STUDENTS+ PROFESSORS AND RESEARCHERS
1. )ayments which a student or business apprentice who is present in a Contracting
State solely for the purpose of his education or training and who is or was
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immediately before such a visit a resident of the other Contracting State received
for the purpose of his maintenance education or training shall not be taxed in the
firstmentioned Contracting State provided that such payments are made to him
from sources outside that State.
!. 3 student at a university or other institution for higher education in a Contracting
State or a business apprentice who is present in the other Contracting State for a
period or periods not exceeding 17" days within any twelve month period and
who is or was immediately before such visit a resident of the firstmentioned
State shall not be taxed in the other Contracting State in respect of
remuneration for services rendered in that other State provided that the services
are in connection with his studies or training and the remuneration constitutes
earnings necessary for his maintenance.
". Remuneration which a resident of a Contracting State receives for underta+ing
research or for teaching during a period of temporary residence not exceeding
two years at a university research institute or other similar establishment for
higher education accredited by the @overnment in the other Contracting State
shall not be taxable in this Contracting State.
Article 21
OTHER INCOME
&tems of income of a resident of a Contracting State which are not expressly mentioned
in the foregoing 3rticles of this 3greement shall be taxable only in that State except
that if such income is derived from sources within the other Contracting State it mayalso be taxed in that other State.
Article 22
ELIMINATION OF DOUBLE TAXATION
1. &n &ndonesia double taxation will be avoided in the following manner#
4here a resident of &ndonesia derives income from the C?ech Republic and such
income may be taxed in the C?ech Republic in accordance with the provisions of
this 3greement the amount of the C?ech tax payable in respect of the income
shall be allowed as a credit against the &ndonesian tax imposed on that resident.
The amount of credit however shall not exceed that part of the &ndonesian taxwhich is appropriate to such income.
!. &n the C?ech Republic double taxation will be avoided in the following manner#
The C?ech Republic when imposing taxes on its residents may include in the tax
base upon which such taxes are imposed the items of income which according to
the provisions of this 3greement may also be taxed in &ndonesia but shall allow
as a deduction from the amount of tax computed on such a base an amount
e/ual to the tax paid in &ndonesia. Such deduction shall not however exceed
that part of the C?ech tax as computed before the deduction is given which is
appropriate to the income which in accordance with the provisions of this
3greement may be taxed in &ndonesia.
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Article 23
NON)DISCRIMINATION
1. ;ationals of a Contracting State shall not be sub*ected in the other Contracting
State to any taxation or any re/uirement connected therewith which is other or
more burdensome than the taxation and connected re/uirements to whichnationals of that other State in the same circumstances are or may be sub*ected.
!. 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 enterprise 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 personal
allowances reliefs and reductions for tax purposes on account of civil status or
family responsibilities which it grants to its own residents.
". 0nterprises 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 sub*ected in the firstmentioned Contracting State
to any taxation or any re/uirement connected therewith which is other or more
burdensome than the taxation and connected re/uirements to which other similar
enterprises of that firstmentioned State are or may be sub*ected.
(. &n this 3rticle the term taxation means taxes which are the sub*ect of this
3greement.
Article 2
MUTUAL AGREEMENT PROCEDURE
1. 4here 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 3greement he may notwithstanding the remedies provided by the
national laws 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 ob*ection appears to it to be
*ustified and if it is not itself able to arrive at an appropriate 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 3greement.
". 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 3greement. They may also consult together for the elimination
of double taxation in cases not provided for in the 3greement.
(. The competent authorities of the Contracting States may communicate with each
other directly for the purpose of reaching an agreement in the sense of thepreceding paragraphs. 4hen it seems advisable in order to reach agreement to
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have an oral exchange of opinions such exchange may ta+e place through a
Commission consisting of representatives of the competent authorities of the
Contracting States.
Article 2!
EXCHANGE OF INFORMATION
1. The competent authorities of the Contracting States shall exchange such
information as is necessary for the carrying out of this 3greement and of the
domestic laws of the Contracting State concerning taxes covered by this
3greement in so far as the taxation thereunder is in accordance with this
3greement. 3ny information so exchanged shall be treated as secret and shall not
be disclosed to any persons or authorities including courts other than those
concerned with the assessment collection enforcement or prosecution in respect
of taxes which are the sub*ect of the 3greement.
!. &n no case shall the provisions of paragraph 1 be construed so as to impose on
one of the Contracting States the obligation#
(a) to carr/ out administrati.e measures at .ariance !ith the la!s or the
administrati.e practice o% that or o% the other +ontracting 0tate
(*) to suppl/ particulars !hich are not o*taina*le under the la!s or in the normal
course o% the administration o% that or o% the other +ontracting 0tate
(c) to suppl/ in%ormation !hich !ould disclose an/ trade' *usiness' industrial'
commercial or pro%essional secret or trade process' or in%ormation' the disclosureo% !hich !ould *e contrar/ to pu*lic polic/ (ordre pu*lic)#
Article 2"
DIPLOMATIC AND CONSULAR OFFICIALS
;othing in this 3greement shall affect the fiscal privileges of diplomatic or consular
officials under the general rules of international law or under the provisions of special
agreements.
Article 2$
MISCELLANEOUS RULES
The provisions of this 3greement shall not be construed to restrict in any manner anyexclusion exemption deduction credit or other allowance now or hereafter accorded#
$a% by the laws of a Contracting State in the determination of the tax imposed by that
State or
$b% by any other special arrangement on taxation in connection with the economic or
technical cooperation between the Contracting States.
Article 2%
ENTR# INTO FORCE
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1. The @overnments of the Contracting States shall notify to each other that the
constitutional re/uirements for the entry into force of this 3greement have been
complied with.
!. The 3greement shall enter into force on the date of the later of the notifications
referred to in paragraph 1 and its provisions shall have effect#
(a) in respect o% taxes !ithheld at source' to amounts deri.ed on or a%ter 1st ;anuar/
in the calendar /ear next %ollo!ing that in !hich the greement enters into %orce
(*) in respect o% other taxes on income' to taxes chargea*le %or an/ taxa*le /ear
*eginning on or a%ter 1st ;anuar/ in the calendar /ear next %ollo!ing that in !hich
the greement enters into %orce#
Article 2&
TERMINATION
This 3greement shall remain in force until terminated by one of the Contracting States.
0ither Contracting State may terminate the 3greement through diplomatic channels by
giving written notice of termination at least six months before the end of any calendar
year following after the period of five years from the date on which the 3greement
enters into force. &n such event the 3greement shall cease to have effect#
$a% in respect of taxes withheld at source to amounts derived on or after 1st anuary in
the calendar year next following that in which the notice is given'
$b% in respect of other taxes on income to taxes chargeable for any taxable year
beginning on or after 1st anuary in the calendar year next following that in which
the notice is given.
&n witness whereof the undersigned duly authorised thereto have signed this
3greement.
-one in duplicate at ... on the (th day of October 1AA( in the 0nglish language.
For the @overnment of the Republic of &ndonesia
Soesilo Soedarman
2inister For Foreign 3ffairs a.i
For the @overnment of the C?ech Republic
Eaclav Daus
)rime 2inister
PROTOCOL
TO T80 3@R0020;T ,0T400;
T80 @OE0R;20;T OF T80 CG0C8 R0)B,D&C 3;- T80 @OE0R;20;T OF T80 R0)B,D&C
OF &;-O;0S&3
FOR T80 3EO&-3;C0 OF -OB,D0 T3H3T&O;
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3t the moment of signing this 3greement the undersigned have agreed#
3d 3rticle : paragraph 1 $c%#
&n computing the taxable profit of an enterprise according to 3rticle : paragraph 1$c%
the profits from activities in the form mentioned in 3rticle 6 paragraph "$a% shall be
attributable to the existing permanent establishment only when these activities meet thecorresponding time test for each separate pro*ect.
For the @overnment of
the Republic of &ndonesia
Soesilo Soedarman
2inister For Foreign 3ffairs a.i
For the @overnment of
the C?ech Republic
Eaclav Daus
)rime 2inister
AGREEMENT BETWEEN
THE REPUBLIC OF INDONESIA
AND
THE ,INGDOM OF SPAIN
FOR
THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL
EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL
Article 1
PERSONAL SCOPE
This 3greement shall apply to persons who are residents of one or both of the
Contracting States.
Article 2
TAXES COVERED
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1. This 3greement shall apply to taxes on income and on capital imposed on behalf
of a Contracting State or of its political subdivisions or local authorities
irrespective of the manner in which they are levied.
!. There shall be regarded as taxes on income and on capital all taxes imposed on
total income on total capital or on elements of income or of capital including
taxes on gains from the alienation of movable or immovable property taxes on
the total amounts of wages or salaries paid by enterprises as well as taxes on
capital appreciation.
". The existing taxes to which the 3greement shall apply are in particular #
(a) in Indonesia :
(i) the income tax imposed under the Undang undang Pajak Penghasilan 1984
(a! "o# $ o% 198&) and to the extent pro.ided in such income tax la!' the
compan/ tax imposed under the <rdonansi Pajak Perseroan 197 (0tatea,ette "o# &19 o% 197 as lastl/ amended */ a! "o# 8 o% 19$6) and the
tax on interest' di.idends and ro/alties imposed under the Undang undang
Pajak atas unga' =i.iden dan o/alt/ 19$6 (a! "o# 16 o% 19$6)
(ii) the propert/ tax imposed under the Undang undang Pajak umi dan
angunan (a! "o# 1 o% 1987)
(hereina%ter re%erred to as Indonesian tax)#
(*) in 0pain :
(i) the income tax on indi.iduals (el Impuesto so*re la enta de las Personas
isicas)
(ii) the corporation tax (el Impuesto so*re 0ociedades)
(iii
)
the capital tax (el Impuesto so*re el Patrimonio)
(i.) local taxes on income and on capital
(hereina%ter re%erred to as 0panish tax)#
(. The 3greement shall also apply to any identical or substantially similar taxes onincome and on capital which are imposed after the date of signature of the
3greement in addition to or in place of those referred to in paragraph ". The
competent authorities of the Contracting States shall notify each other of any
substantial changes which have been made in their respective taxation laws.
Article 3
GENERAL DEFINITIONS
1. For the purposes of this 3greement unless the context otherwise re/uires#
(a) (i) the term Indonesia comprises the territor/ o% the epu*lic o% Indonesia as
de%ined in its la!s and the adjacent areas o.er !hich the epu*lic o%
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Indonesia has so.ereign rights or jurisdiction in accordance !ith the
pro.isions o% the United "ations +on.ention on the a! o% the 0ea' 198
(ii) the term 0pain means the 0panish 0tate and' !hen used geographicall/'
means the territor/ o% the 0panish 0tate including an/ area outside the
territorial sea in !hich' in accordance !ith international la! and domesticlegislation' the 0panish 0tate ma/ exercise jurisdiction or so.ereign rights
!ith respect to the sea*ed' its su*soil and superjacent !aters' and their
natural resources
(*) the terms a +ontracting 0tate and the other +ontracting 0tate mean 0pain or
Indonesia as the context re2uires
(c) the term person includes an indi.idual' a compan/ and an/ other *od/ o%
persons
(d) the term compan/ means an/ *od/ corporate or an/ entit/ !hich is treated as a
*od/ corporate %or tax purposes
(e) the terms enterprise o% a +ontracting 0tate and enterprise o% the other
+ontracting 0tate mean' respecti.el/' an enterprise carried on */ a resident o% a
+ontracting 0tate and an enterprise carried on */ a resident o% the other
+ontracting 0tate
(%) the term international tra%%ic means an/ transport */ a ship or aircra%t operated
*/ an enterprise o% a +ontracting 0tate' except !hen the ship or aircra%t is
operated solel/ *et!een places in the other +ontracting 0tate
(g) the term competent authorit/ means
(i) in Indonesia:
the 3inister o% inance or his authori,ed representati.e
(ii) in 0pain:
the 3inister o% >conom/ and inance or his authori,ed representati.e
(h) the term nationals means:
(i) an/ indi.idual possessing the nationalit/ o% a +ontracting 0tate
(ii) an/ legal person' partnership and association deri.ing its status as such %rom
the la!s in %orce in a +ontracting 0tate#
!. 3s regards the application of the 3greement by a Contracting State any term not
defined therein shall unless the context otherwise re/uires have the meaning
which it has under the law of that State concerning the taxes to which the
3greement applies.
Article
RESIDENT
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emplo/ees or other personnel engaged */ the enterprise %or such purpose' *ut onl/
!here acti.ities o% that nature continue (%or the same or a connected project)
!ithin the countr/ %or a period or periods aggregating more than three months
!ithin an/ t!el.e-month period#
(. ;otwithstanding the preceding provisions of this 3rticle the term permanent
establishment shall be deemed not to include#
(a) the use o% %acilities solel/ %or the purpose o% storage or displa/ o% goods or
merchandise *elonging to the enterprise
(*) the maintenance o% a stock o% goods or merchandise *elonging to the enterprise
solel/ %or the purpose o% storage' displa/ or deli.er/
(c) the maintenance o% a stock o% goods or merchandise *elonging to the enterprise
solel/ %or the purpose o% processing */ another enterprise
(d) the maintenance o% a %ixed place o% *usiness solel/ %or the purpose o% purchasing
goods or merchandise' or o% collecting in%ormation' %or the enterprise
(e) the maintenance o% a %ixed place o% *usiness solel/ %or the purpose o% ad.ertising'
%or the suppl/ o% in%ormation' %or scienti%ic research or %or similar acti.ities !hich
ha.e a preparator/ or auxiliar/ character' %or the enterprise
(%) the maintenance o% a %ixed place o% *usiness solel/ %or an/ com*ination o%
acti.ities mentioned in su*paragraphs (a) to (e)' pro.ided that the o.erall acti.it/
o% the %ixed place o% *usiness resulting %rom this com*ination is o% a preparator/
or auxiliar/ character#
6. ;otwithstanding the provisions of paragraphs 1 and ! where a person other
than an agent of an independent status to whom paragraph : 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
underta+es for the enterprise if such a person#
(a) has and ha*ituall/ exercises in that 0tate an authorit/ to conclude contracts in the
name o% the enterprise' unless the acti.ities o% such person are limited to thosementioned in paragraph 4 !hich' i% exercised through a %ixed place o% *usiness'
!ould not make this %ixed place o% *usiness a permanent esta*lishment under the
pro.isions o% that paragraph or
(*) has no such authorit/' *ut ha*ituall/ maintains in the %irst- mentioned 0tate a
stock o% goods or merchandise %rom !hich he regularl/ deli.ers goods or
merchandise on *ehal% o% the enterprise#
5. 3n 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 ris+s
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situated therein through an employee or through a representative who is not an
agent of an independent status within the meaning of paragraph :.
:. 3n 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 bro+er general commission agent or any
other agent of an independent status provided that such persons are acting in
the ordinary course of their business. 8owever when the activities of such an
agent are devoted wholly or almost wholly on behalf of that enterprise he will not
be considered an agent of an independent status within the meaning of this
paragraph.
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 or otherwise% shall not of itself constitute either company a
permanent establishment of the other.
Article "
INCOME FROM IMMOVABLE PROPERT#
1. &ncome 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 /uestion is situated. Theterm shall in any case include property accessory to immovable property
livestoc+ and e/uipment 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 wor+ing of or the right to wor+ mineral deposits sources and other natural
resources' ships boats and aircraft shall not be regarded as immovable
property.
". The provisions of paragraph 1 shall also apply to income derived from the direct
use letting or use in any other form of immovable property.
(. The provisions of paragraphs 1 and " 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 $
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. &f the enterprise carries on
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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 esta*lishment
(*) sales in that other 0tate o% goods or merchandise o% the same or similar kind asthose sold through that permanent esta*lishment or
(c)other *usiness acti.ities carried on in that other 0tate o% the same or similar kind
as those e%%ected through that permanent esta*lishment#
!. Sub*ect to the provisions of paragraph " 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 ma+e
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.
". &n 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. 8owever 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 ban+ing
enterprise by way of interest on moneys lent to the permanent establishment.
Di+ewise no account shall be ta+en 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 rights or by way of commission for specific services performed or for
management or except in the case of a ban+ing enterprise by way of interest
on moneys lent to the head office of the enterprise or any of its other offices.
(. ;o 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.
6. 4here profits include items of income which are dealt with separately in other
3rticles of this 3greement then the provisions of those 3rticles shall not be
affected by the provisions of this 3rticle.
Article %
SHIPPING AND AIR TRANSPORT
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1. )rofits from the operation of ships or aircraft in international traffic carried on by
an enterprise of a Contracting State shall be taxable only in that State.
!. The provisions of paragraph 1 shall also apply to profits from the participation in
a pool a *oint business or an international operating agency.
Article &
ASSOCIATED ENTERPRISES
4here#
$a% an enterprise of a Contracting State participates directly or indirectly in the
management control or capital of an enterprise of the other Contracting State or
$b% the same persons participate directly or indirectly in the management control or
capital of an enterprise of a Contracting State and an enterprise of the other
Contracting State
and in either case conditions are made or imposed between the two enterprises in their
commercial or financial relations which differ from those which would be made between
independent enterprises then any profits which would but for those conditions have
accrued to one of the enterprises but by reason of those conditions have not so
accrued may be included in the profits of that enterprise and taxed accordingly.
Article 1'
DIVIDENDS
1. -ividends paid by a company which is a resident of a Contracting State to aresident of the other Contracting State may be taxed in that other State.
!. 8owever such dividends may also be taxed in the Contracting State of which the
company paying the dividends is a resident and according to the laws of that
State but if the recipient is the beneficial owner of the dividends the tax so
charged shall not exceed#
(a) 16? o% the gross amount o% the di.idends i% the *ene%icial o!ner is a compan/
!hich holds directl/ at least 7? o% the capital o% the compan/ pa/ing the
di.idends
(*) 17? o% the gross amount o% the di.idends in all other cases#
@he competent authorities o% the +ontracting 0tates shall */ mutual agreement settle
the mode o% application o% these limitations# @he pro.isions o% this paragraph shall not
a%%ect the taxation o% the compan/ in respect o% the pro%its out o% !hich the di.idends
are paid#
". The term dividends as used in this 3rticle means income from shares or other
rights not being debtclaims participating in profits as well as income from
other corporate rights which is sub*ected to the same taxation treatment as
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income from shares by the laws of the State of which the company ma+ing the
distribution is a resident.
(. The provisions of paragraphs 1 and ! 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. &n such case the provisions of
3rticle : or 3rticle 1( as the case may be shall apply.
6. 4here 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 sub*ect the company9s undistributed
profits to a tax on the company9s undistributed profits even if the dividends paid
or the undistributed profits consist wholly or partly of profits or income arising in
such other State.
5. ;otwithstanding any other provisions of this 3greement 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 sub*ectedto an additional tax in that other State in accordance with its law but the
additional tax so charged shall not exceed 1<= of the amount of such profits
after deducting therefrom income tax and other taxes on income imposed
thereon in that other State.
:. The provisions of paragraph 5 of this 3rticle shall not affect the provisions
contained in any production sharing contracts and contracts of wor+ $or any other
similar contracts% relating to oil and gas sector or other mining sector concluded
on or before "1 -ecember 1A7" by the @overnment of &ndonesia its
instrumentality its relevant State oil and gas company or any other entity thereofwith a person who is a resident of Spain.
Article 11
INTEREST
1. &nterest arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in that other State.
!. 8owever 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 1<= of the
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the payment shall remain taxable according to the laws of each Contracting
State due regard being had to the other provisions of this 3greement.
Article 13
CAPITAL GAINS
1. @ains derived by a resident of a Contracting State from the alienation of
immovable property referred to in 3rticle 5 and situated in the other Contracting
State may be taxed in that other State.
!. @ains 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.
". @ains derived by a resident of a Contracting State from the alienation of ships or
aircraft operated in international traffic or of movable property pertaining to the
operation of such ships or aircraft shall be taxable only in that State.
(. @ains 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 1
INDEPENDENT PERSONAL SERVICES
1. &ncome 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 A< days in any
twelvemonth period. &f 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.
!. 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 1!
DEPENDENT PERSONAL SERVICES
1. Sub*ect to the provisions of 3rticles 15 17 1A !< and !1 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
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exercised in the other Contracting State. &f the employment is so exercised such
remuneration as is derived therefrom may be taxed in that other State.
!. ;otwithstanding 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 firstmentioned State if#
(a) the recipient is present in that other 0tate %or a period or periods not exceeding in
the aggregate 18& da/s !ithin an/ period o% 1 months and
(*) the remuneration is paid */' or on *ehal% o%' an emplo/er !ho is not a resident o%
the other 0tate and
(c) the remuneration is not *orne */ a permanent esta*lishment or a %ixed *ase !hich
the emplo/er has in the other 0tate#
". ;otwithstanding the preceding provisions of this 3rticle remuneration derived inrespect of an employment exercised aboard a ship or aircraft operated in
international traffic by an enterprise of a Contracting State may be taxed in that
State.
Article 1"
DIRECTORS( FEES
-irectors9 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 any other similar organ of a
company which is a resident of the other Contracting State may be taxed in that other
State.
Article 1$
ARTISTES AND ATHLETES
1. ;otwithstanding the provisions of 3rticles 1( and 16 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.
!. 4here 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
3rticles : 1( and 16 be taxed in the Contracting State in which the activities of
the entertainer or athlete are exercised.
". ;otwithstanding the provisions of paragraphs 1 and ! 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 apolitical subdivision a local authority or public institution thereof.
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Article 1%
PENSIONS
1. Sub*ect to the provisions of paragraph ! of 3rticle 1A pensions and other similar
remuneration paid to a resident of a Contracting State in consideration of past
employment shall be taxable only in that State.
!. ;otwithstanding the provision of paragraph 1 pensions paid by a pension fund
approved by the @overnment and other payments made under a public scheme
which is part of the social security system of a Contracting State or a political
subdivision or a local authority thereof shall be taxable only in that State.
Article 1&
GOVERNMENT SERVICE
1. $a% 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 servicesrendered to that State or subdivision or authority shall be taxable only in that
State.
$b% 8owever such remuneration shall be taxable only in the other Contracting State
if the services are rendered in that other State and the individual is a resident of
that State who#
$i% is a national of that State' or
$ii% did not become a resident of that State solely for the purpose of
rendering the services.
!. $a% 3ny 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.
$b% 8owever such pension shall be taxable only in the other Contracting State if the
individual is a resident of and a national of that other State.
". The provisions of 3rticles 16 15 and 17 shall apply to remuneration and pensions in
respect rendered in connection with a business carried on by a Contracting State or a
political subdivision or a local authority thereof.
Article 2'
TEACHERS AND RESEARCHERS
1. 3 professor teacher or researcher who ma+es a temporary visit to a Contracting
State solely for the purpose of teaching or conducting research at a university
college school or other recogni?ed educational institution and who is or
immediately before such visit was a resident of the other Contracting State shall
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be exempt from tax in the firstmentioned State for a period not exceeding two
years in respect of remuneration for such teaching or research.
!. The provision of paragraph 1 shall not apply to income from research if such
research is underta+en not in the general interest but primarily for the private
benefit of a specific person or persons.
Article 21
STUDENTS
)ayments which a student apprentice or business trainee 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 firstmentioned State provided that such payments are made to him from sources
outside that State.
Article 22
OTHER INCOME
&tems of income of a resident of a Contracting State which are not expressly mentioned
in the foregoing 3rticles of this 3greement shall be taxable only in that State except
that if such income is derived from sources within the other Contracting State it may
also be taxed in that other State.
Article 23
CAPITAL
1. Capital represented by immovable property referred to in 3rticle 5 owned by a
resident of a Contracting State and situated in the other Contracting State may
be taxed in that other State.
!. Capital represented by 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 by movable property pertaining to a fixed base used
for the performance of professional services may be taxed in the Contracting
State in which the permanent establishment or fixed base is situated.
". Capital owned by a resident of a Contracting State represented by ships and
aircraft operated in international traffic and movable property pertaining to theoperation of such ships and aircraft shall be taxable only in that State.
(. 3ll other elements of capital of a resident of a Contracting State shall be taxable
only in that State.
Article 2
ELIMINATION OF DOUBLE TAXATION
1. 4here a resident of &ndonesia derives income from Spain and such income may be
taxed in Spain in accordance with the provisions of this 3greement the amount of
Spanish tax payable in respect of the income shall be allowed as a credit against the&ndonesian tax imposed on that resident. The amount of credit however shall not
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exceed that part of the &ndonesian tax which is appropriate to such income.
!. $a% 4here a resident of Spain derives income or owns capital which in
accordance with the provisions of this 3greement may be taxed in
&ndonesia Spain shall allow#
$i% as a deduction from the tax on the income of that resident
an amount e/ual to the income tax paid in &ndonesia'
$ii% as a deduction from the tax on the capital of that resident
an amount e/ual to the capital tax paid in &ndonesia.
Such deduction in either case shall not however exceed that part of
the income tax or capital tax as computed before the deduction is
given which is attributable as the case may be to the income or the
capital which may be taxed in &ndonesia.
$b% &n the case of a dividend paid by a company which is a resident of
&ndonesia to a company which is a resident of Spain and which holds
directly at least !6= of the capital of the company paying the dividend
in the computation of the credit there shall be ta+en into account in
addition to the tax creditable under subparagraph $a% of this paragraph
that part of the tax effectively paid by the firstmentioned company on
the profits out of which the dividend is paid which relates to suchdividend provided that such amount of tax is included for this purpose
in the taxable base of the receiving company.
Such deduction together with the deduction allowable in respect of the
dividend under subparagraph $a% of this paragraph shall not exceed that
part of the income tax as computed before the deduction is given which
is attributable to the income sub*ect to tax in &ndonesia.
$c% 4here in accordance with any provision of the 3greement income
derived or capital owned by a resident of Spain is exempt from tax inSpain Spain may nevertheless in calculating the amount of tax on the
remaining income or capital of such resident ta+e into account the
exempted income or capital.
Article 2!
NON)DISCRIMINATION
1. ;ationals of a Contracting State shall not be sub*ected in the other Contracting
State to any taxation or any re/uirement connected therewith which is other or
more burdensome than the taxation and connected re/uirements to which
nationals of that other State in the same circumstances are or may be sub*ected.
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This provision shall notwithstanding the provisions of 3rticle 1 also apply to
persons who are not residents of one or both of the Contracting States.
!. 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 reliefs and reductions for taxation purposes on account of
civil status or family responsibilities which it grants to its own residents.
". 0nterprises 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 sub*ected in the firstmentioned State to any
taxation or any re/uirement connected therewith which is other or more
burdensome than the taxation and connected re/uirements to which other similar
enterprises of the firstmentioned State are or may be sub*ected.
(. 0xcept where the provisions of 3rticle A paragraph : of 3rticle 11 or paragraph
5 of 3rticle 1! apply interest royalties 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
firstmentioned State. Similarly any debts of an enterprise of a Contracting State
shall for the purpose of determining the taxable capital of such enterprise bedeductible under the same conditions as if they had been contracted to a resident
of the firstmentioned State.
6. &n this 3rticle the term taxation means taxes of every +ind and description.
Article 2"
MUTUAL AGREEMENT PROCEDURE
1. 4here 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 3greement 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 3rticle !6 to that of the Contracting State of which he is a
national. The case must be presented within two years from the first notification
of the action resulting in taxation not in accordance with the provisions of the
3greement.
!. The competent authority shall endeavour if the ob*ection appears to it to be
*ustified 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
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Contracting State with a view to the avoidance of taxation which is not in
accordance with this 3greement.
". 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 3greement. They may also consult together for the elimination
of double taxation in cases not provided for in the 3greement.
(. 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 consultation shall
develop appropriate procedures conditions methods and techni/ues for the
implementation of the mutual agreement procedure provided for in this 3rticle.
Article 2$
EXCHANGE OF INFORMATION1. The competent authorities of the Contracting States shall exchange such
information as is necessary for carrying out the provisions of this 3greement or of
the domestic laws of the Contracting States concerning taxes covered by the
3greement insofar as the taxation thereunder is not contrary to the 3greement
in particular for the prevention of fraud or evasion of such taxes. The exchange of
information is not restricted by 3rticle 1. 3ny 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 theassessment or collection of the enforcement or prosecution in respect of or the
determination of appeals in relation to the taxes which are the sub*ect of the
3greement. Such persons or authorities shall use the information only for such
purposes but may disclose the information in public court proceedings or in
*udicial decisions.
!. &n no case shall the provisions of paragraph 1 be construed so as to impose on a
Contracting State the obligation#
(a) to carr/ out administrati.e measures at .ariance !ith the la!s and administrati.e
practice o% that or o% the other +ontracting 0tate
(*) to suppl/ in%ormation !hich is not o*taina*le under the la!s or in the normal
course o% the administration o% that or o% the other +ontracting 0tate
(c) to suppl/ in%ormation !hich !ould disclose an/ trade' *usiness' industrial'
commercial or pro%essional secret or trade process' or in%ormation' the disclosure
o% !hich !ould *e contrar/ to pu*lic polic/ (ordre pu*lic)#
Article 2%
DIPLOMATIC AND CONSULAR OFFICERS
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;othing in this 3greement 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 2&
ENTR# INTO FORCE
1. This 3greement shall be ratified and the instruments of ratification shall be
exchanged as soon as possible.
!. The 3greement shall enter into force upon the exchange of instruments of
ratification and its provisions shall have effect in respect of taxes chargeable for
any taxable year beginning on or after the first day of anuary in the calendar
year next following that in which the 3greement enters into force.
Article 3'
TERMINATION
This 3greement shall remain in force until denounced by one of the Contracting States.
0ither Contracting State may denounce the 3greement through diplomatic channels by
giving notice of termination at least six months before the end of any calendar year
following after the period of five years from the date on which the 3greement enters into
force. &n such event the 3greement shall cease to have effect in respect of taxes
chargeable for any taxable year beginning on or after the first day of anuary in the
calendar year next following that in which the notice is given.
-one at a+arta on the "<th day of 2ay 1AA6 in duplicate in the Spanish &ndonesian
and 0nglish languages all these texts being e/ually authentic. &n case of any divergence
of interpretations the 0nglish text shall prevail.
For the @overnment of
the Republic of &ndonesia
sgd
3D& 3D3T3S
2&;&ST0R FOR FOR0&@; 3FF3&RS
For the @overnment of
the ingdom of Spain
sgd
3E&0R @O20G ;3E3RRO
2&;&ST0R TR3-0 3;- TOBR&S2
PROTOCOL
3t the signing of the 3greement for the avoidance of double taxation and the prevention
of fiscal evasion with respect to taxes on income and on capital this day concluded
between the ingdom of Spain and the Republic of &ndonesia the undersigned have
agreed that the following provisions shall form an integral part of the 3greement.
1# To Article 5 paragraph 4(a)
It is understood that the use o% %acilities %or mere deli.er/ shall not *e deemed a
permanent esta*lishment unless the/ are used as a sales outlet#
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