KEPPRES No. 6 Tahun 1998 — law.crpg.info

Keputusan Presiden ini mulai berlaku pada tanggal ditetapkan.
Agar setiap orang mengetahuinya, memerintahkan pengundangan Keputusan
Presiden ini dengan penempatannya dalam Lembaran Negara Republik Indonesia.

Ditetapkan di Jakarta

pada tanggal 12 Januari 1998

PRESIDEN REPUBLIK INDONESIA

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SOEHARTO

Diundangkan di Jakarta
pada tanggal 12 Januari 1998
MENTERI NEGARA SEKRETARIS NEGARA
REPUBLIK INDONESIA

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MOERDIONO

LEMBARAN NEGARA REPUBLIK INDONESIA TAHUN 1998 NOMOR 14

AGREEMENT BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS
FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION
OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the Republic of Indonesia and the Government of the Republic
of Mauritius

DESIRING to conclude an Agreement for the avoidance of dauble taxation and the
prevention of fiscal evasion with respect to taxes on income,
HAVE AGREED AS FOLLOWS:

Article 1
PERSONAL SCOPE

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

Article 2
TAXES COVERED

1. This Agreement shall apply to taxes on income imposed on behalf of a
Contracting State or its political subdivisions, irrespective of the manner in
which they are levied.
2. There shall be regarded as taxes on income all taxes imposed on total income,
or on elements of income, including taxes on gains from the alienation of
movable or immovable property.

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

(a) in Indonesia,

the income tax imposed under the Undang-undang Pajak Penghasilan 1984
(Law no. 7 of 1983 as amended), (hereinafter referred to as "Indonesian
tax");

(b) in Mauritius,

the income tax,

(hereinaffer referred to as "Mauritius tax").

4. This Agreement shall also apply to any other taxes of a substantially similar
character which are imposed by either Contracting State after the date of
signature of this Agreement in addition to, or in place of, the existing taxes.
5. The competent authorities of the Contracting States shall notify each other of
any substantial changes which have been made in their respestive taxation
laws, and if it seems desirable to amend any Article of this Agreement, without
affecting the general principles thereof, the necessary amendments may be
made by mutual consent by means of an Exchange of Notes.

Article 3
GENERAL DEFINITIONS

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

(a) (i) the term "Indonesia" comprises the territory of the Republic of Indonesia
as defined in its laws and the adjacent areas over which the Republic of
Indonesia has sovereignty, sovereign rights or jurisdiction in accordance
with the provisions of International Law;

(ii) the term "Mauritius" means the Republic of Mauritius and includes:

(A) all the territories and islands which, in accordance with the laws
of Mauritius, constitute the State of Mauritius;

(B) the territorial sea of Mauritius; and
(C) any area outside the territorial sea of Mauritius which in
accordance with international law has been or may hereafter be
designated, under the laws of Mauritius, as an area, including the
Continental Shelf, within which the rights of Mauritius with
respect to the sea, the sea-bed and sub-soil and their natural
resources may be exercised;

(b) the term "person" includes an individual, a company, and any other body of
persons which is treated as an entity for tax purposes;

(d) 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;

(e) the term "international traffic" means any transport by a ship or aircraft
operated by an enterprise of a Contracting State, except when the ship or
aircraft is operated solely between places in the other Contracting State;

(f) the term "competent authority" means:

(i) in Indonesia:

the Minister of Finance or his authorized representative;

(ii) in Mauritius:

the Minister of Finance or his authorized representative;

(g) the term "national" means:

(i) any individual possessing the nationality or citizenship of a Contracting
State;

(ii) any legal person, partnership, association or other entity deriving its
status as such from the laws in force in a Contracting State.

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

Article 4
RESIDENT

1. For the purpose of this Agreement, the term "resident of a Contracting State"
means any person who, under the laws of that State, is liable to tax therein by
reason of his
domicile, residence, place of management or any other
criterion of a similar nature. This term does not include any person who is liable
to tax in respect only of income from sources in that State.

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

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

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

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

(d) if he is a national of both States or of neither of them, the competent
authorities of the Contracting States shall settle the question by mutual
agreement.
3. Were 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 States shall settle the question by mutual agreement.

Article 5
PERMANENT ESTABLISHMENT

1. For the purposes of this Agreement, the term "permanet establishment" means
a fixed place of business through which the business of an enterprise is wholly
or partly carries on.

2. The term " permanent establishment" includes especially:

(a) a place of management;

(b) a branch;

(d) a factory;

(e) a workshop;

(f) a warehouse, in relation to a person providing storage facilities for others;

(g) a farm or plantation;

(h) a mine, an oil or gas well, aquarry or any other place of extraction or
exploration of natural resources,
drilling rig or working ship used for
exploration or exploitation of natural resources.

3. The term "permanet establishment" likewise encompasses:

(a) a building site, a construction, assembly or installation project, or
supervisory activities in connection therewith, but only where such site,
project or activities continue for a period of more than 6 months;

(b) the furnishing of services, including consultancy services by an enterprise
through employees or other personnel engaged by the enterprise for such
purpose, but only where activities of that nature continue (for the same or a
connected project) within the country for a period or periods agreegating to
more than 4 months within any twelve month period.

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

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

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

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

(d) the maintenance of a fixed place of business solely for the purpose of
purchasing goods or merchandise or 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 researcht or for
similar activities which have a preparatory or auxiliary character, for the
enterprise; and

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

5. Notwithstanding the provisions of paragraphs 1 and 2, where a person - other
than an agent of an independent status to whom paragraph 6 applies is acting
in a Contracting State on behalf of an enterprise of the other Contracting State,
that enterprise shall be deemed to have a permanent establishment in the
first-mentioned State in respect of any activities which that person undertakes
for the enterprise, if such a person:

(a) has and habitually exercises in that State an authority to conclude contracts
in the name of the enterprise, unless the activities of such person are
limited to those mentioned in paragraph 4 which, if exercised through a
fixed place of business, would not make this fixed place of business a
permanent establishment under the provisions of that paragraph; or

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

6. An enterprise of a Contracting State shall not be deemed to have a permanent
establishment in the other Contracting State merely because it carries on
business in that other State through a broker, general commission agent or any
other agent of an independent status, provided that such persons are acting in
the ordinary course of their business. However, when the activities of such an
agent are devoted wholly or almost wholly on behalf of that enterprise or its
associated enterprises, he will not be considered an agent of an independent
status within the meaning of this paragrah.

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 6
INCOME FROM IMMOVABLE PROPERTY

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

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

3. The provesion of paragrap 1 shall also apply to income derived from the direct
use, letting or use in any other form of immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income from
immovable property of an enterprise and to income from immovable property
used for the performance of independent personal services.

Article 7
BUSINESS PROFITS

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

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

3. In determining the profits of a permanent establishment, there shall be allowed
as deductions expenses which are incurred for the purposes of the 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. However, 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 ist other offices, by way of royalties,
fees or other similar payments in return for use of patents or other rights, or by
way of commission, for specific services performed or for management, or,
except in the case of a banking enterprise, by way of interest on moneys lent to
the permanent establishment. Likewise, no account shall be taken, in the
determination of the profits of a permanent establishment, for amounts
charged, (otherwise than towards reimbusement of actual expenses ), by
the
permanent establishment to the head office of the enterprise or any of its other
offices, by way of royalties, fess or other similar payments in return for the use
of patents or other rights, or by way of commission for specific services
performed or for management, or, except in the case of a banking enterprise,
by way of interest on moneys lent to the head office of the enterprise or any of
its other offices.

4. Insofar as it has been customary in a Contracting State to determine the profits
to be attributed to a pemanent establishment on the basis of an apportionment
of the total profits of the enterprise to its various parts, nothing in paragraph 2
shall preclude that 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 contained in this Article.

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.

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

Article 8
SHIPPING AND AIR TRANSPORT

1. Profits of an enterprise from the operation of ships or aircraft in international
traffic including rental of containers and related equipment which is incidental
to the operation of ships or aircraft shall be taxable only in the Contracting
State of which the enterprise is a resident.

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

Article 9
ASSOCIATED ENTERPRISES

1. Where:

(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.

2. Where a Contracting State includes in the profits of an enterprise of that State
and taxes accordingly - profits on which an enterprise of the other Contracting
State has been charged to tax in that other State and the profits so included are
profits which would have accrued to the enterprise of the first-mentioned State
if the conditions made between the two enterprises had been those which would
have been made between independent enterprises, then that other State shall
make an appropriate adhustment to the amount of the tax charged therein on
those profits. In determining such adjustment, due regard shall be had to the
other provisions of the Agreement and the competent authorities of the
Contracting States shall, if necessary consult each other.

3. A Contracting State shall not change the profits of an enterprise in the
circumstances referred to in paragraph 2 after the expiry of the time limits
provided in its tax laws.

Article 10
DIVIDENDS

1. Dividends paid by a company which is a resident of a Contracting State to a
resident of the other Contracting State may be taxed in that other State.

2. However, such dividends may also be taxed in the Contracting State of which
the company paying the dividends is a resident and according to the laws of
thar State, but if the recipient is the beneficial owner of the dividends, the tax
so charged shall not exceed:

(a) 5 per cent of the gross amount of the dividends if the beneficial owner is a
company which holds at least 20 per cent of the capital of the company
paying the dividends;

(b) 10 per cent of the gross amount of the dividends in all other cases.

The competent authorities of the Contracting States shall settle the mode of
application of these limitations by mutual agreement.

This paragraph shall not affect the taxation of the company in respect of the
profits out of which the dividends are paid.

3. The term "dividends" as used in this Article means income from shares or other
rights, not being debt-claims, participating in profits, as well as income from
other corporate rights which is subjected to the same taxation treatment as
income from shares by the laws of the State of which the company making the
distribution is a resident.

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

5. Notwithstanding any other provisions of this Agreement where a company which
is a resident of a Contracting State has a permanent establishment in the other
Contracting State, the profits of the permanent establishment may be
subjected to an additional tax in that other State in accordance with its law,
but the additional tax so charged shall not exceed 10 per cent of the amount of
such profits after deducting therefrom income tax and other on income
imposed thereon in that other State.

6. Where a company which is a resident of a Contracting State derives profits or
income from the other Contracting State, no tax may be imposed on the
beneficial owner in that other State on the dividends paid by the company
except in so far as such dividends are paid to a resident of that other State in so
far as the holding in respect of which the dividends are paid is effectively
connected with a permanent establishment or a fixed base situated in that
other State, nor subject the company's undistributed profits to a tax on
undistributed profits, even if the dividends paid or the undistributed profits
consist wholly or partly of profits or income arising in such other State.

7. The provision of paragraph 5 of this Article shall not adffect the provision
contained in any production sharing contract and contracts of work (or any
other similar contracts) relating to oil and gas sector or other mining sector
concluded by the Government of Indonesia, its
instrumentality, its relevant
state oil and gas company or any other entity thereof with a person who is a
resident of the other Contracting States.

Article 11
INTEREST

1. Interest arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in that other State.

2. However, subject to the provisions of paragraph 3, such interest may also 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 10 per cent of the gross amount of the interest.

3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting
State and derived by the Gevernmet of the other Contracting State including
local authorities thereof, a political subdivision, the Central Bank or any
financial institution controlled by that Government, the capital of which is
wholly owned by the Government of the other Contracting State, as may be
agreed upon from time to time between the competent authorities of the
Contracting States, shall be exempt from tax in the first-mentioned State.

4. The term "interest" as used in this Article means income from debt-claims of
every kind, whether or not secured by mortgage and whether or not carrying a
right to participate in the debtor's profits, and in particular, income from
government securities and income from bonds or debentures, including
premiums and prizes attaching to such securities, bonds or debentures. Penalty
charges for late payment shall not be regarded as interest for the purpose of
this Article. The term "interest" shall not include any item which is treated as a
dividend under the provisions of Article 10 of this Agreement.

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

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

7. Where, by reason of a special relationship between the payer and the beneficial
owner or between both of them and some other person, the amount of the
interest, having regard to the debt claim for which it is paid, exceeds the
amount which would have been agreed upon by the payer and the beneficial
owner in the absence of such relationship, the provisions of this Article shall
apply only to the last-mentioned amount. In such a case, the excess part of the
payments shall remain taxable according to the laws of each Contracting State,
due regard being had to the other provisions of this Agreement.
Article 12
ROYALTIES

1. Royalties arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in that other Contracting State.

2. However, such royalties may also be taxed in the Contracting State in which
they arise and according to the law of that Contracting State; but, if the
beneficial owner is a resident of the other Contracting State, the tax so charged
shall not exceed 10 per cent of the gross amount of the royalties.

3. The term "royalties" as used in this Article means payments, whether periodical
or not, and in whatever form or name or nomenclature to the extent to which
they are made as consideration for:

(a) the use of, or the right to use, any copyright, patent, design or model, plan,
secret formula or process, trademark or other like property or right; or

(b) the use of, or the right to use, any industrial, commercial or scientific
equipment; or

(d) the use of, or the right to use:
(i) motion picture films; or
(ii) films or video tapes or discs for use in connection with television; or
(iii) tapes or discs for use in connection with radio broadcasting; or

(e) total or partial forbearance in respect of the use or supply of any property
or right referred to in this paragraph.

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

5. Royalties shall be deemed to arise in a Contracting State when the payer is that
State itself, a local authority or a resident of that State. Where, however, the
person paying the royalties, whether he is a resident of a Contracting State or
not, has in a Contracting State a permanent establishment or a fixed base in
connection with which the liability to pay the royalties was incurred, and such
royalties are borne by such permanent establishment or fixed base, the such
royalties shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated.

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

Article 13
CAPITAL GAINS

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

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

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

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

Article 14
INDEPENDENT PERSONAL SERVICES

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

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

Article 15
DEPENDENT PERSONAL SERVICES

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

2. Notwithstanding the provisions of paragraph 1, remuneration
derived
by
a
resident of a Contracting State in respect of an employment exercised in the
other Contracting State shall be taxable only in the first-mentioned State, if:

(a) the recipient is present in the other State for a period or periods not
exceeding in the aggregate 183 days within any twelve month period; and

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

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

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

Article 16
DIRECTORS FEES

1. Directors fees and other similar payments derived by a resident of a Contracting
State in his capacity as a member of the board of directors or any other similar
organ of a company which is a resident of the other Contracting State may be
taxed in that other State.

2. The remuneration which a person to whom paragraph 1 applies derives from the
company in respect of the discharge of day-to-day functions of a managerial or
technical nature may be taxed in accordance with the provisions of Article 15.

Article 17
ENTERTAINERS AND SPORTSMEN

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

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

3. Notwithstanding the provisions of paragraphs 1 and 2, 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 one or both of the Contracting
States, a local authority or public institution thereof.

Article 18
PENSIONS AND ANNUITIES

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

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

3. Notwithstanding the provisions of paragraph 1, pensions paid and other
payments made under a public scheme which is parf 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 19
GOVERNMENT SERVICE

1. (a) Remuneration, other than a pension, paid by, or out of funds created by, a
Contracting State or a political subdivision, local authority or statutory body
thereof to an individual in respect of services rendered to that State,
subdivision, authority or body shall be taxable only in that State.

(b) However, 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.

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

(b) However, 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.

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

Article 20
TEACHERS AND RESEARCHERS

1. An individual who is immediately before visiting a Contracting State a resident
of the other Contracting State and who, at the invitation of the Government of
the firstmentioned Contracting State or of a University, college, school or other
educational institution, museum, or other cultural institution in that first
mentioned Contracting State under an official programme of cultural exchange,
is present in that Contracting State for a period not exceeding two consecutive
years solely for the purpose of teaching, giving lectures or carrying out research
at such institution shall be exempt from tax in that Contracting State on his
remuneration for such activity, provided that payment of such remuneration is
derived by him from outside that Contracting State.

2. The provisions of this Article shall not apply to income from research if such
research is undertaken not in the public interest but wholly or mainly for the
private benefit of a specific person or persons.

Article 21
STUDENTS AND BUSINESS APPRENTICES

1. Payments which a student or business apprentice who is or was immediately
before visiting a Contracting State a resident of the other Contracting State and
who is present in the first mentioned 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 Contracting State, provided that such
payments arise from sources outside that Contracting State.

2. In respect of grants, scholarships and remuneration from employment not
covered by paragraph 1, a student or business apprentice described in
paragraph 1 shall, in addition, be entitled during such education or training to
the same exemption, reliefs or reductions in respect of taxes available to
residents of the Contracting State which he is visiting.

Article 22
OTHER INCOME

1. Items of income of a resident of a Contracting State, consisting of lottery
winnings and prizes, shall be taxable only in that State except that, if such
income is derived from sources within the Contracting State, it may also be
taxed in that other State.

2. Subject to the provisions of paragraph 3 of this Article, items of income of a
resident of a Contracting State, wherever arising, not dealt in paragraph 1 and
in the foregoing Articles in respect of which he is subject to tax in that State,
shall be taxable only in that State.

3. The provisions of paragraph 2 shall not apply to income if the person deriving
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 independent personal services from a fixed base
situated therein, and the right of property in respect of which the income is
paid is effectively xonnected with such permanent establishment or fixed base.
In such a case the provisions of Article 7 or Article 14, as the case may be, shall
apply.

Article 23
ELIMINATION OF DOUBLE TAXATION

Double taxation shall eliminated as follows:

1. In the case of Indonesia:

(a) Where a resident of Indonesia derives income from Mauritius the amount of
tax on that income payable in Mauritius in accordance with the provisions of
this Agreement may be credited against the Indonesian tax imposed on that
resident.

(b) Where a company which is a resident of Mauritius pays a dividend to a
company which is a resident of Indonesia and which controls, directily or
indirectly, at least 20 per cent of the capital of the company paying the
divident, the credit shall take into account (in addition to any Mauritius tax
for which credit may be allowed under the provisions of subparagraph (a) of
this paragraph) the Mauritius tax payable by the first-mentioned company in
respect of the profits out of which such dividend is paid.

Provided that any credit allowed under subparagraphs (a) and (b) shall not
exceed the Mauritius tax (as computed before allowing any such credit),
which is appropriate to the profits or income derived from sources within
Indonesia.

2. In the case of Mauritius:

(a) Where a resident of Mauritius derives income from Indonesia the amount of
tax on that income payable in Indonesia in accordance with the provisions of
this Agreement may be credited against the Mauritius tax imposed on that
resident.

(b) Where a company which is a resident of Indonesia pays a dividend to a
company which is a resident of mauritius and which controls, directly or
indirectly, at least 20 per cent of the capital of the company paying the
dividend, the credit shall take into account (in addition to any Indonesia tax
for which credit may be allowed under the provisions of subparagraph (a) of
this paragraph) the Indonesian tax payable by the first-mentioned company
in respect of the profits out of which such dividend is paid.

Provided that any credit allowed under subparagraphs (a) and (b) shall not
exceed the Indonesian tax (as computed before allowing any such credit),
which is appropriate to the profits or income derived from sources within
Mauritius.

3. For the purposes of allowance as a credit the tax payable in Indonesia or
Mauritius as the context requires, shall be deemed to include the tax which is
otherwise payable in either of the two Contracting States but has been reduced
or waived by either State in order to promote its economic development.

Article 24
NON-DISCRIMINATION

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

2. 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.
3. Enterprises of a Contracting State, the capital of which is wholly or partly
owned or controlled, directly or indirectly, by one or more residents of the
other Contracting State, shall not be subjected in the first-mentioned State to
any taxation or any requirement connected therewith which is other or more
burdensome than the taxation and connected requirements to which other
similar enterprises of that first-mentioned State are or may be subjected.

4. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article
11, or paragraph 6 of Article 12 apply, interest, royalty and other
disbursements paid by an enterprise of a Contracting State to a resident of the
other Contracting State shall, for the purpose of determining the taxable profits
of such enterprise, be deductible under the same conditions as if they had been
paid to a resident of the first-mentioned State.

5. In this Article the term "taxation" means taxes which are the subject of this
Agreement.

Article 25
MUTUAL AGREEMENT PROCEDURE

1. Where a person considers that the action of one or both of the Contracting
States result or will result for him in taxation not in accordance with this
Agreement, he may,irrespective of the remedies provided by the domestic law
of those States, present his case to the competent authority of the Contracting
State of which he is resident or, if his case comes under paragraph 1 of Article
24, to that of the Contracting State of which he is a national. The case must be
presented within two years from the first notification of the action resulting in
taxation not in accordance with the provisions of this Agreement.

2. The competent authority shall endeavour, if the objection appears to it to be
justified and if it is not itself able to arrive at 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 which is not
in accordance with this Agreement.

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

4. The competent authorities of the Contracting States may communicate with
each other directly for the purpose of reaching an agreement in the sense of
the preceding
paragraphs. When it seems advisable in order to reach
agreement to have an oral exchange of opinions, such exchange may take place
through a commission consisting of representatives of the competent
authorities of the Contracting States.

Article 26
EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting State shall exchange such
information as is necessary for carrying out the provisions of this Agreement or
of the domestic laws of the Contracting States concerning taxes covered by this
Agreekent insofar as the taxation thereunder is not contrary to the Agreement,
in particular for the prevention of fraud or evasion of such taxes. The exchange
of information is not restricted by Article 1 Any information so exchanged shall
be treated as secret in the manner as information obtained under the domestic
law of that State and may be disclosed only to persons or outhorities (including
courts or administrative bodies) involved in the assessment or collection or the
enforcement or prosecution in respect of, or the determination of appeals in
telation to, the taxes covered by this Agreement. Such persons or authoritis
shall use the information only for such purposes. They may disclose the
information in public court proceedings or in judicial decisions. The competent
authorities shall, through consultation, develop appropriate conditions,
methods and techniques concerning the matteers in respect of which such
exchanges of information shall be made, including. Where appropriate,
exchanges of information regading tax avoidance.

2. In no case shall the provisions of paragraph 1 be construed so as to inpose on a
Contracting State 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 information which is not obtainable under the laws or in the
normal course if 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 thade process, or information, the
disclosure of which would be contrary to public policy (ordre public).

Article 27
DIPLOMATIC AGENTS AND CONSULAR OFFICERS

Nothing in this Agreement shall affect the fiscal privileges of diplomatic agents or
consular officers under the general rules of international law or under the
provisions of special agreements.

Article 28
ENTRY INTO FORCE

1. This Agreement shall enter into force on the later of the dates on which
respective Governments may notify each other in writing that the formalities
constitutionally required in their respective States for bringing the Agreement
into force have been complied with.

This Agreement shall heve effect:

(a) In Indonesia:

(i) in respect of tax withheld at source to income derived on or after 1
january in the year next following that in which the Agreement enters
into force; and

(ii) in respect of other taxes on income, for taxable years beginning on or
after 1 January in the year next following that in which the Agreement
enters into force.

(b) In Mauritius:

in respect of taxes on income for any income year beginning on or after the
first day of July next following the date upon which this Agreement enter
into force.

Article 29
TERMINATION

1. This Agreement shall remain in force until terminated by a Contracting State.
Either Contracting State may terminate the Agreement, through diplomatic
channels, by giving written notice of termination on or before the thirtith day
of June of any calendar year following after the period of 5 years from the year
in which the Agreement enters into force.

In such a case, the Agreement shall cease to have effect:

(a) In Indonesia:

(i) inrespect of tax withheld at source to income derived on or ofter 1
January in the year next following that in which the notice of
termination is given; and

(ii) in respect of other on income for taxable years beginning on or after
1.... the notice of termination is to given.

(b) In Mauritius:

in respect of taxes on income for any income year beginning on or after the
first day of July next following the calendar year in which such notice is
given.

IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed
this Agreement.

DONE in duplicate at Jakarta this day of 3 th Desember 1996 in the English
language.

For the Government of the
For the Government of the

Republic of Indonesia

Republic of Mauritius

Keputusan Presiden Nomor 6 Tahun 1998 tentang PENGESAHAN AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDONESIA AND THE GOVERNMENT OF THE REPUBLIC MAURITIUS FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

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