KEPPRES No. 149 Tahun 1998

Keputusan Presidden ini mulai berlaku pada tanggal ditetapkan.
Agar …
PRESIDEN
REPUBLIK INDONESIA
Agar
setiap
orang
mengetahuinya,
memerintahkan
pengundangan
Keputusan Presiden ini dengan penempatannya dalam Lembaran Negara
Republik Indonesia.
Ditetapkan di Jakarta
pada tanggal 18 September 1998
PRESIDEN REPUBLIK INDONESIA
ttd.
BACHARUDDIN JUSUF HABIBIE
Diundangkan di Jakarta
pada tanggal 18 September 1998
MENTERI NEGARA SEKRRETARIS NEGARA
REPUBLIK INDONESIA
ttd.
AKBAR TANDJUNG
LEMBARAN NEGARA REPUBLIK INDONESIA TAHUN 1998 NOMOR 142
AGREEMENT BETWEEN THE REPUBLIC OF INDONESIA
AND
THE KINDOM OF BELGIUM
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 KINDOM OF BELGIUM,
DESIRING to conclude an Agreement for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income, have agreed as follows :
CHAPTER I. - SCOPE OF THE AGREEMENT
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 of its political subdivisions or local authorities, 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 alicnation of movable or
immovable property, taxes on the total ampunts of wages or salaries paid by
enterprises, as well as taxes on capital appreciation.
3.
The existing taxes to which the Agreement shall apply are in particular :
a).
in the case of Indonesia :
the income tax imposed under the "Undang-undang Pajak Penghasilan
1984" (Law No. 7 of 1983 as amended);
(hereinafter refrred to as Indonesian tax)
b).
in the case of Belgium :
(i)
the individual income tax;
(ii)
the corporate income tax;
(iii)
the income tax on legal entities;
(iv)
the income tax on non-resident;
(v)
the special levy assimilated to the individual income tax;
(vi)
the supplementary erisis tax.
including the prepayments, the surcharges on these taxes and
prepayments, and the supplements to the individual income tax;
(hereinafter referred to as Belgian tax);
4.
The Agreement shal apply also to any indentical or substantially similar taxes
which are imposed after the date of signature of the Agreement in addition to, or in
place of, the Existing taxes. The competent authoities of the Contracting States
shall notify each otheer of substantial changes which have been made in their
respective taxation laws.
CHAPTER II - DEFINITIONS
Article 3
GENERAL DEFINITIONS
1.
For the purposes of this Agreement, unless the context otherwise requires :
a)
the term "Indonesia" comprises the territory of the Republic of Indonesia as
defined in its laws, and part of the continental shelf and adjacent seas over
which the Republic of Indonesia has sovereignty, sovereign rights or
jurisdiction in accordance with international law;
b)
the term "Belgium" means the territory of the Kingdom of Belgium,
including the territorial sea and any other area in the sea and in the air
within which the Kingdom of Belgium, in accordance with international
law, exercises sovereign rights or its jurisdiction;
c)
the terms "a Contracting State" and "the otheer Contracting State" mean
Belgium or Indonesia as the context requires;
d)
the terms " tax" means Indonesian tax or Belgian tax, as the context
requires;
e)
the terms "person" includes in individual, a company
and any other body
of persons;
f)
the terms "company" means any body corporate or any entity which is
treated as a body corporate for tax purporses in the Contracting State of
which it is a resident;
g)
the terms "enterpprise 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;
h)
the terms 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;
i)
the terms "competent authority" means :
(i)
in the case of Indonesia, the Minister of Finance or his duly
authorised representative, and
(ii)
in the case of Belgium, the Minister of Finance or his duly
authorised respresentative;
j)
the term nationals means :
(i)
all individuals possessing the nationality of a Contracting State;
(ii)
all legal persons, partnerships and associations deriving their 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 terms not
defined therein shall, unless the context otherwise requires, have the meaning
which it has under the law of that State concerning the taxes to which the
Agreement applies.
Article 4
RESIDENT
1.
For the purposes of this Agreement, the term resident of a Contracting State"
means any person who, under the laws of that State, is liable to tax therein by
reason of his domicile, residence, place of management or any other criterion of
similar nature. However this term does not include any person who is liable to tax
in a Contracting State 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
permanent home available to him; if he has a permanent home available to
him in both States, he shall be deemed to be a resident of the State with
which his personal and economic relation are closer (centre of vital
interests);
b)
if the State in which he has his centre of vital intersts cannot be determined,
or if he has not a
permanent home available to him in either State, he
shall be deemed to be a resident of the State in which he has an habitual
abode;
c)
if he has an habitual abode in both States or in neither of them, the
competent authorities of the Contracting States shall settle the question by
mutual agreement.
3.
Where 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 resident of
the State in which its place of effective management is situated.
Article 5
PERMANENT ESTABLISHMENT
1.
For the purposes of this Agreement, the terms "permanent establishment" means a
fixed place of business through which the business of an enterprise is wholly or
partly carried on.
2.
The term "permanent establishment" includes especially :
a)
aplace of management;
b)
a branch;
c)
an office;
d)
a factory;
e)
a workshop;
f)
a farm or a plantation;
g)
a mine, an oil or gas well, a quarry or any other place of extraction of
natural ressources.
3.
The term "permanent establishment likewise encompasses :
a)
a building site, a construction, assembly or installation project or
supervisory activities in connection therewith, where such site, project or
activities continue for a period of more than six months;
b)
the furnishing of services, including consultancy services, by an enterprise
through employees or other personnel engaged by the enterprise for such
purpose, but only where activities of that nature continue (for the same or a
connected project) within the country for a period or periods aggregating
more than three months within any period of twelve months.
4.
Notwithstanding the preceding provisions of this Article, the term permanent
establishment" shall be deemed not to include :
a)
the use facilities solely for the purpose of storage or display of goods or
merchandise beloaging 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 fixed place of business solely for
the
purpose
of
purchasing goods or merchandise or of collecting information, for the
enterprise;
e)
the maintenance of a fixed place of business solely for the purpose of
carrying on, for the enterprise, any other activity of a preparatory or
auxiliary character;
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 Contracting State in respect of any activities which that person
undertakes for the enterprise, if such a person :
a)
has and habutually exercises in that State an authority to conclude contracts
in the name of enterprise, unless the activities of the 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, he will not be considered an agent of an independent
stats within the meianing of this paragraph.
7.
The fact that a company which is a resident of a Contracting State controls or is
contralled 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.
CHAPTER III.- TAXATION OF INCOME
Article 6
INCOME FROM IMMOVABLE PROPERTY
1.
Income derived by a resident of a Contracting State from immovable property
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 resources; ships, both
and aircraft shal not be regarded as immovable property.
3.
The provisions of paragraph 1 shall apply to income derived from the direct use
letting, or use in any other from of immovable property.
4.
The provisions of paragraphs 1 and 3 shal 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
through a permanent establishment situated therein. If the enterprise carries on
business as aforesaid, the profits of the enterprise may be taxed in the other State,
but only so much of them, as is attributable to :
a)
that permanent establishment, or
b)
the sale of goods or merchandise of the same or similar kind as those sold,
or to other business transactions of the same or similar kind as those
effected, through that permanent establishment.
2.
Subject to the provisions of paragraph 3, where an enterprise of a Contracting
State carres on business in the other Contracting State through a permanent
establishment situated therein, there shall in each Contracting State be attributed to
that peermanent 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 the determination of 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 its other offices, by way of royalties, fees or other
similar payments in return for the use of patents or other rights, or by way of
commission, for specific services performed or for management, or, except in the
case of a banking enterprise, by way of interes 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 other nise than to words
reimbursement of actual expensis, by the permanent establishment to the head
office of the enterprise or any of its other offices, by way of royalties, fees or
otheer similar payments in return for the use of patents or the rights, or by way of
commission for case of a banking enterprise, by way of interest on moneys tent or
the head office of the enterprise or any its oter offices.
4.
Insofar as it has been customary in a Contracting State to determine the profits to
be attributed to a permanent establishment on the basis of an apportionment of the
total profits of the enterprise to its various
parts, nothing in paragraph 2 shall
preclude that Contracting State from determining the profits to be taxed by such an
apportionment as may be customary; the method of appartionment adopted shall,
however, be such that the result shall be in accordance with the principles
contained in this Article.
5.
No profits shall be attributed to a permanent establishment by reason of the mere
purchase by that permanent establishment of goods or merchandise for the
enterprise.
6.
For the purposes of the preceding paragraphs, the profits to be attributed to the
permanent establishment shall be determined by the same method year by year
unless there is good and sufficient reason to the contrary.
7.
Where profits include items of income which are dealt with separately in other
Articles of thiss Agreement, then the provisions of those Articles shall not be
affected by the provisions of this Article.
Article 8
SHIPPING AND AIR TRANSPORT
1.
Profits of an enterprise of a Contracting State from the operation of ships or
aircraft in international traffic of from the use or rental of containers which is
incidental to such operation shall be taxable only in that State.
2.
The provisions 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
Where
a)
and enterprise of a Contracting State participates directly or indirectly inthe
management, control or capital of and
entreprise of the other Contracting State,
or
b)
the same persons participate derectly 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 profis 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 enterrprise and taxed accordingly.
Article 10
DIVIDENS
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 that State,
but if the beneficial owner of the dividends is a resident of the other Contracting
State, the tax so charged shall not exced.
a)
10 per cent of the gross amount of the dividends if the beneficial owner is a
company which holds directly at least 25 per cent of the capital of the
company paying the dividends;
b)
15 per cent of the gross amount of the dividends in all other cases.
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, jouissance
shares or jouissance rights, mining shares, founders' shares or other rights, not
being debt-claims, participating in profits, as well as income-even paid in the from
of interest- which is treated as income from shares by the internal tax legislation of
the State of which the paying company 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
indenpandent 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.
Where a company which is a resident of a Contracting State derives profits or
income from the other Contracting State, that other State may not impose any tax
on the dividends
paid by the company, except insofar as such dividends are
paid to a resident of that other State or insofar as the holding in respect of which
the dividends are paid is effectively connected with a permanent establishment or a
fixed base situated in that other State, nor subject the company's undistributed
profits to a tax on the company's undistributed profits, even if the dividends paid or
the undistributed profits consist wholly or partly of profits or income arising in
such other State.
6.
Notwithstanding the provisions of paragraph 5, where a company which is a
resident of a Contracting State has in the other Contracting State a permanent
establishment, that other State may subject the profits of the permanent
establishment, after deduction of the tax which may be levied thereon in
accordance with the provisiona of Article 7, to an additional tax on deemed
distribution of income according to its laws, but te tax so charged shall not exceed
10 per cent of the profits thus reduced.
7.
The provisions of paragraph 6 shall not affect the provisions contained in any
production sharing contracts and contracts of work (or any other similar contracts)
relating to oil and gas sector or other mining sector concluded on or before 31
December, 1983, by the Government of Indonesia, its instrumentality, its relevent
state oil and gas company or any other entity thereof with a person who is a
resident of Belgium.
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, 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 beneficial owner of the
interest is a resident of the other Contracting State the tax so charged shall not
exceed 10 per cent of the gross amount of the interest.
3.
Notwithstanding the provisions of paragraph 2, interest shall be exempted from tax
in the Contracting State in which it arises if it is paid to the other Contracting State
or a political subdivision or a local authority thereof, or to the central bank of that
other State.
4.
The term interest as used in this Article means income froms debt-claims of every
kind, whether or not secured by mortgage and whether or not carrying a right to
participate
in
the
debtors
profits,
and
in
particular,
income
from
government
securities and income from bonds or debentures, including premums and prizes
attaching to such securities, bonds or debentures; however, the term interest shall
not include for the purpose of this Article penalty charges for late payment nor
interest regarded as dividends under paragraph 3 of Article 10.
5.
The provisions of paragraph 1, 2 and 3 shall not apply if the beneficial owner of
the interest, being a resident of Contracting State, carries on business in the other
Contracting State in which the interest aries, through a permanent establishment
situated therein, or performs in that other State independent personal services from
a fixed base situated therein, and the debt-claim in respect of which the interest is
paid is effectively connected with such permanent establishment or fixed base, in
such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
6.
Interest the 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 such permanent establishment or fixed base,
then such interest shall be deemed to arise in the State in which the permanent
establisment or fixed base is sutiated.
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 interst,
having regard to the debt-claim for which it is paid. exceds the amount which
would have been agreed upon by the payer and the beneficial owner in the absence
of such relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In such case, thexcess part of the payments shall remain
taxable in the Contracting State in which the interest arises according to the laws
of that State.
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 State.
2.
However, such royalties may also be taxed in the Contracting State in which they
arise and according to the laws of that State, but if the beneficial owner of the
royalties is a resident of the other Contracting State, the tax so charged shall nor
exceed 10 per cent of the gross amount of the royalties.
3.
The tern royalties as used in this Article means payments of any kind received as a
consideration for the use of, or the right to use, any copyrights of literary, artistic
or scientific work including cinematograph films, or films or tapes used for ratio or
television broadcasting, any patent, trade mark, design or model, plan, secret
formula or process, or for the use of, or the right to use, industrial, commercial, or
scientific equipment, or for information concerning industrial, commercial or
scientific experience.
4.
The provisions of paragraph 1 and 2 shall not apply f the beneficial owner of the
royalties, being a resident of a Contracting State,carries on business in the other
Contractng State in
which
the
royalties
arise,
through
a
permanent
establishment
situated therein, or performs in that other State independent personal sevices from
a fixed base situated therein, and are right or property in respect of which the
royalties anre 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.
Royalties shall be deemed to arise in a Contracting State when the payer is that
State itself, a political subdivision, a local authority or a resident of that State.
Where, however, the person paying the royalties, whether he is a resident of a
Contracting State or not , has in a Contracting State a permanent establisment of a
fixed base in connection with whichthe 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 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 case, the excess part of the royalties
shall remain taxable in the Contracting State in which the royalties arise according
to the laws of that State.
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 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 baase, may be taxed in that otheer State.
3.
Gains derived by an enterprise of a Contracting State from the alienation of ships
or aorcraft operated in international traffic or mavable property pertaining to the
operation of ships or aircraaft, shall be taxable only in that State.
4.
Gains from the aalienation of any property other than that referred to in alienator is
a resident.
Article 14
INDEPENDENT PERSONAL SERVICES
1.
Income derived by a resident of a Contracting State in respect of professional
services or other activities of an indenpendent character shall be taxable only in
that State except in the following circumstances, when such income may also be
taxed in the other Coctracting State :
a)
if he has a fixed base regularly available to him in the other Contracting
State for the purpose of performing his activities; in that case, only so much
of the income as is attributable to that fixed base may be taxed in that other
Contracting State; or
b)
if his stay in the other Contracting State is for a period or periods amounting
to or exceeding in the aggregate 91 days within any period of twelve
months; in that case, only so much of the income as is derived from his
activities performed in that other State may be taxed in that other State.
2.
The term "professional services" includes especially independent scientific,
literary, artistic, educational or teaching activities as well as he independent
activities of physicians, lawyers, engineers, architects, dentists 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 reeipient is present in the other State for a period or periods not
exceeding in the aggregate 183 days within any period of twelve months,
and
b)
the remuneration is paid by, or on behalf of, an employer who is not a
resident of the otheer State; and
c)
the remuneration is not borne by a permanent establishment or a fixed base
which the employer has in the otheer State.
3.
Notwithstanding the preceding provisions of this Article, remunaration derived in
respect of an employment exercised aboard a ship or aircraft operated by an
enterprise of a Contracting State in international trafic, may be taxed 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 a similar organ or as
a partner of a company which is a resident of the other Contracting State may be
taxed in that other State.
The preceding provision shall also apply to payments derived in respect of the
discharge of functions which, under the laws of the Contracting State of which the
company is a resident, are regarded as functions of a similar nature as those
exercised by a person referred to in the said provision.
2.
Remuneration which a person to whom paragraph 1 applies derives from the
company in respect of the discharge of day-to-day fuctions of a managerial or
technical nature shall be taxable in accordance with the provisions of Article 15.
3.
The provision of paragraph 2 shall also apply to remuneration derived bay a
resident of a Contracting State in respect of his personal activity as a working
paartner of a company other than a company with share capital, wich is a resident
of the other Contracting State.
Article 17
ARTISTES AND ATHLETES
1.
Notwithstanding the provisions of article 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 an athlete, 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 bay an entertainer or an
athlete in his capacity as such accrues not to the entertainer or athlete himself but
to another person, that income may, notwithstanding the provisions of Articles 7,
14 and 15, be taxed in the Contracting State in wich the activities of the entertainer
or athlete are exercised.
3.
Notwithstanding the provisions of paragraphs 1 and 2 income derived bay an
entertaineer or athlete from his personal activities as such shall be exempt from tax
in the Contracting State in wich these activities are exercised if the activities are
substantially supported by public funds or sponsored by the other Contracting
State, or by a political subdivision, local authority or statutory body thereof.
Article 18
PENSIONS
Subject to the provisions of paragraph 2 of Article 19, pensions and other similar
remuneration arising in a Contracting State and paid to a resident of the other Contracting
State in consideration of past employment may be taxed in the first-mentined State.
Article 19
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 services rendered to that State or subdivision or authority shall be taxable
only in that State.
b)
However, such remunerataion shall be taxable only in the other Contracting
State if the services are rendered in that State and the individual is a
resident of that State who :
(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 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)
However, such pension shall be taxable only in the other Contracting State
if the individual is a resident of, and a national of, that State.
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 or a local authority thereof.
Article 20
PROFESSORS, RESEARCHERS AND STUDENTS
1.
A professor, teacheer or researcher who makes a temporary visit to a Contracting
State solely for the purpose of teaching or conducting research at a university,
college, school or other recognised educational institution, and who is a resident of
the other Contracting State shall be exempt from tax in the first-mentioned State
for a period not exceeding two years in respect of remuneration for such teaching
or research.
2.
Payments 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 first-mentioned State, provided that such
payments are made to him from sources outside that State.
Article 21
OTHER INCOME
1.
Items of income of a resident of a Contracting State, wherever arising, not dealt
with in the foregoing Articles of this Agreement shall be taxable only in that State.
2.
The provisions of paragraph 1 shall not apply to income, other than income from
immovable property as defined in paragraph 2 of Article 6, if the recipient of such
income, being a resident of a Contracting State, carries on business in the other
Contracting State through a permanent establishment situted therein, or performs
in that other State independent personal services from a fixed base situated therein,
and the right or property in respect of which the income is paid is effectively
connected with such permanent establishment or fixed base. In such case the
provisions of Article 7 or Article 14, as the case may be, shall apply.
3.
Nitwithstanding the provisions of paragraphs 1 and 2, items of income of a
resident of a Contracting State not dealt with in the foregoing Articles of the
Agreement and arising in the other Contracting State may also be taxed in that
other State.
CHAPTER IV. METHODS OF ELIMINATION OF DOUBLE TAXATION
Article 22
1.
In the case Indonesia, double taxation shall be avoided as follows :
a)
Indonesia, when imposing tax on residents of Indonesia, may inclede in the
basis upon which such tax is imposed the income which may be taxed in
Belgium in accordance with the provisions of the Agreement.
b)
Where a resident of Indonesia derives income from Belgium and such
income may be taxed in Belgium in accordance with the provisions of the
Agreement, the amount of Belgian tax payable in respect of such income
shall be allowed as a credit a gainst the Indonesian tax imposed on that
resident. The amount of credit, however, shall not exced that part of the
Indonesian tax which is appropriate to such income.
2.
In the case of Belgium, double taxation shall be avoided as follows :
a)
Where a resident of Belgium derives income which may be taxed in
Indonesia in accordance with the provisions of this Agreement, other than
those of paragraph 2 of Article 10, paragraphs 2 and 7 of Article 11, and
paragraphs 2 and 6 of Article 12, Belgium shall exempt such income from
tax but may, in calculating the amount of tax on the remaining income of
that resident, apply the rate of tax which would have been applicable if
such income had not been exempted.
b)
Subject to the provisions of Belgian law regarding the deduction from
Belgian tax of taxes paid abroad, where a resident of Belgium derives items
of his aggregate income for Belgian tax purposes which are dividends
taxable in accordance with paragraph 2 of Article 10, and not exempted
from Belgian tax according to sub-paragraph c) hereinafter, interest taxable
in accordance with paragraph 2 or 7 of Article 11, or royalties taxable in
accordance with paragraph 2 or 6 of Article 12, the Indonesian tax levied
on that income shall be allowed as credit against Belgian tax relating to
such income.
c)
Dividdends wthin the meaning of paragraph 3 of Article 10, derived by a
company whiich is a resident of Belgium from a company which is a
resident of Indonesia, shall be exempt from the corporate income tax in
Belgium under the conditions and within the limits provided for in Belgian
law.
d)
where, in accordance with Belgian law, losses incurred by an enterprise
carried on by a resident of Belgium in a permanent establishment situated in
Indonesia, have been effectively deducted from the profits of that enterprise
for its taxation in Belgium, the exemption provided for in sub-paragraph a)
shall not apply in Belgium to the profits of other taxable periods attributable
to that establishment to the extent that those profits have also been
exempted from tax in Indonesia by reason of compensation for the said
losses.
CHAPTER V. - SPECIAL PROVISIONS
Article 23
NON-DISCRIMINATION
1.
Nationals of Contracting State shall not be subjected in the other Contracting State
to any taxation or any requirement connected therewith which is otheer or more
burdensome than the taxation and connected requirements to which nationals of
that other State in the same circumstances, in particular with respect to residence,
are or may be subjected. This provision shall, notwithstanding the provisions of
Article 1, also apply to persons who are not residdents of one or both of the
Contracting States.
2.
The taxation on a permanent establishment which an enterprise of a Contracting
State has in the otheer 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 activies. 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 of family
responsibilities which it grants to its own residents.
3.
Except where the provisions of Article 9, paragraph 7 of Article 11, or paragraph 6
of Article 12, apply, interest, royalties and other distribursements 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.
4.
Enterprises of a Contracting State, the capital of which is wholly or partly owned
or controlled. directly.or inderectly by one or more residents of the other
Contracting State, shall not be subjected in first-mentioned State to any taxation or
any requirement connected therewith which is other or more ourdensome than the
taxation and connected requirements to which otheer similar enterprises of the
first-mentioned State are or may by subjected.
5.
Nothing contained in this Article shall be construed as preventing Belgium :
a)
from taxing the profits attributable to a permanent establishment in Belgium
of company which is a resident of Indonesia at the rate of tax provided by
the Belgian law;
b)
from imposing the movable property prepayment on dividends derived
ffrom a holding which is effectively connected with a permanent
establishment maintained in Belgium by a company which is a resident of
Indonesia.
6.
In this Article, the teerm "taxation" means taxes which are the subject of this
Agreement.
Article 24
MUTUAL AGREEMENT PROCEDURE
1.
Where a person considers that the actions of one or both of the Contracting States
result or will result for him in taxation not in accodance with the provisions of this
Agreement, he may, irrespective of the remedies provided by the domestic law
of
those States, present his case to the competent authority of the Contracting State of
which he is a resident or, if his case comes under paragraph 1 of Article 23, to that
of the Contracting State of which he is a national. The case must be presented
within three years from the first notification of the action resulting in taxation not
in accordance with the provisions of the Agreement.
2.
The competent authroty shall endeavour, if the objection appears to it to be
justified and if it is not itself able to arrive at a statisfactory 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 the
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.
4.
The competent authorities of the Contracting States shall agree on administrative
measures necessary to carry out the provisions of the Agreement and particularly
on the proofs to be furnished by residents of either Contracting State in order to
benefit in the other State from the exemptions or reductions in tax orivided for in
the Agreement.
5.
The competent authorities of the Contracting States shall communicate directly
with each other for the application of the Agreement.
Article 25
EXCHANGE OF INFORMATION
1.
The competent authoritties of the Contracting States shall exchange such
information as is necessary for carrying out the provisions of this Agreement or of
the domestic laws
of the Contracting States concerning taxes covered by the
Agreement insofar as the taxation thereunder is not contrary to the Agreement, in
particular for the prevention of fraud or evasion of such taxes. The exchange of
information is not restricted by Article 1. Any information received by a
Contracting State shall be treated as secret in the same manner as information
obtained under the domestic laws of that State and shall be disclosed only to
persons or outhorities (including courts and administrative bodies) involved in the
assesment or collection of, the enforcement or prosecution in respect of, or the
determination of appeals in relation to, the taxes covered by the Agreement. Such
persons or authorities shall use the information only for such purposes. They may
disclosed the information in public court proceedings or in judicial decisions.
2.
In no case shall the provisions of paragraph 1 be construed so as to impose on a
Contracting State the obligation :
a)
to carry out administrative measures at variance with the laws and
administrative practice of that or of the other Contracting State;
b)
to supply information which is not obtainable under the laws or in the
normal course of the administration of that or of the other Contracting
State;
c)
to supply information which would disclose any trade, business, industrial,
commerial or professional secret or trade process, or information, the
disclosure of which would be contrary to public policy.
Article 26
ASSISSTANCE IN COLLECTION
1.
Each Contracting State shall endeavour to collect on behalf of the other
Contracting State such taxes imposed bay that other State as will ensure that any
exemption or reduced rate of tax granted under this Agreement by that other State
shall not be enjoyed ny persons not entitled to such benefits.
2.
In no case shall the provisions of this Article be construed so as to impose upon the
requested State the obligation to apply any means of enforcement which are not
authorised by the legal provisions or regulations of either Contracting State or to
take measures which would be contrary to public policy.
Article 27
LIMITATION OF THE EFFECTS OF THE AGREEMENT
1.
Nothing in this Agreement shall affect the fiscal privileges of members of a
diplomatic
mission or consular post under the general rules of international laws
or under the provisions of special agreements.
2.
The Agreement shall not apply to international organisations, to organs or officials
thereof and to persons who are members of a diplomatic mission or consular post
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.
CHAPTER VI. - FINAL PROVISIONS
Article 28
ENTRY INTO FORCE
1.
This Agreement shall be approved by Belgium and Indonesia in accordance with
their respective legal procedures, and shall enter into force on the fifteenth day
after the date of exchange of notes indicating such approval.
2.
The Agreement shall have effect :
a)
with respect to taxes due at source on income credited or payable on or after
January I in the year next following the year in which the Agreement enters
into income.
b)
with respect to otheer taxes charged on income of taxable periods ending on
or afteer Decembeeer 31 of the year in which the agreement enters into
force.
3.
The Agreement between the Kingdom of Belgium and the Republic of Indonesia
for the avoidance of double taxation and the prevention of fiscal evasion with
respect to taxes on income and on capital and the Protocol signed at Brussels on
Novembeer 13th, 1973, shall terminate and cease to be effective in relation to any
tax for any period for which this Agreement has effect in accordance with
paragraph 2 of this Article as respects that tax.
Article 29
TERMINATION
This Agreement shall remain in force until terminated by a Contracting State; but either
Contracting State may terminate the Agreement, through diplomatic channels, by giving
to the other Contracting State written notice of termination not later than the 30th June of
any calendar year from the fifth year following that in which the Agreement entered into
force. In the event of termination before July 1 of such year, the Agreement shall cease to
have effect :
a)
with respect to taxes due at source on income credited or payable at latest on
December 31 in the year in which the notice of termination is given;
b)
with respect to other taxes charged on income of taxable periods ending before
December 31 of the same year.
IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their
respective Governments, have signed this Agreement and have affixed thereto their seals.
DONE in duplicate at Jakarta, this September 16, 1997 in the English language.
FOR THE GOVERNMENT OF
FOR THE GOVERNMENT OF
THE REPUBLIC OF INDONESIA :
THE KINGDOM OF BELGIUM :
ttd.
ttd.
PROTOCOL
At the moment of signing the Agreement between the Kindom of Belgium and the
Republic of Indonesia for the Avidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to Taxes on Income, the underssigned have agreed that the
following provisions shall form an intergral part of the said agreement :
Ad Article 7, paragraph 1
It is understood that profits derived by an enterprise of a Contracting State within the
other Contracting State from sale of goods or merchandise of the same or similar kind as
those sold or from other business transactions of the same or similar kind as those
effected, through the permanent establisment situated therein, may be taxed in such other
Contracting Staate, if the permanent establisment had contributed in any manner in the
making of such sales or transactions.
IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their
respective governments, have signed this Protocol and have affixed thereto their seals.
DONE in diplicate at Jakarta, this Septembeer 16, 1997 in the English language.
FOR THE GOVERNMENT OF
FOR THE GOVERNMENT OF
THE REPUBLIC OF INDONESIA :
THE KINGDOM OF BELGIUM :
ttd.
ttd.

Keputusan Presiden Nomor 149 Tahun 1998 tentang PENGESAHAN AGREEMENT BETWEEN THE REPUBLIC OF INDONESIA AND THE KINGDOM OF BELGIUM FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME BESERTA PROTOKOL

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