Tax Treaty France

8/14/2019 Tax Treaty France

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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'



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



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



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'



$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



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



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



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



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


!

.

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



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



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



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.



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



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 !.



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



. 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



. 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#



. $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


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.



&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.




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



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



*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



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



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#



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.



". &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 %


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.



!. The provisions of paragraph 1 shall also apply to profits from participation in a

pool a *oint business or an international operating agency.

Article &


4here#





Contracting State






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



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.



(. 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



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


!. 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



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.



!. 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$


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.



". ;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



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.



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


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



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



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;



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.



Soesilo Soedarman

2inister For Foreign 3ffairs a.i


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



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%



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



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



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


!. 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



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 %




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 &


4here#





Contracting State






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



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


!. 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



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


!. @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



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$


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.



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



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



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.



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"


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



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



;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.



sgd

3D& 3D3T3S

2&;&ST0R FOR FOR0&@; 3FF3&RS


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#

Tax Treaty France

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Transcript of Tax Treaty France