Dok P3B Indonesia-Singapore 20 dok p3b ind sing

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

AGREEMENT
BETWEEN THE REPUBLIC OF INDONESIA
AND
THE REPUBLIC OF SINGAPORE
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 Singapore,

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

Article
PERSONAL

1
SCOPE

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

2

Article
TAXES

1.

This

Agreement

2

COVERED

shall apply to taxes on income imposed

on behalf of each Contracting

State,

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,
taxes

on

including

gains from the alienation of movable or immovable

property and taxes on the total amount of wages or

salaries

paid by enterprises.

3.

The

existing taxes to which this Agreement shall apply

(a)

in Singapore:

are

the

income

tax

(hereinafter

referred

to

as

"Singapore tax");

(b)

1n Indonesia;

the

income

tax

(pajak penghasilan),

extent provided in such income
tax (pajak perseroan)

and

the

tax,

and to the
the

tax on

company
interest,

dividends and royalties (pajak atas bunga, dividen

3

dan

royalty)

(hereinafter

referred

to

as

"Indonesian tax").

4.

This Agreement shall also apply

to

any

identical

or

substantially similar taxes which are imposed after the date
of
of,

signature of this Agreement in addition to,
the existing taxes.

Contracting

States

or in place

The competent authorities of
shall

notify

each

other

of

the
any

significant changes which have been made in their respective
taxation laws.

5.

If by reason of changes made in

either

Contracting

article of this

State,

Agreement

principles thereof,

the

taxation

law

of

it seems desirable to amend any
without

affecting

the

general

the necessary amendments may be made by

mutual consent by means of

an

exchange of diplomatic notes

or in any other manner in accordance

with

their

constitu-

context

otherwise

tional procedures.

Article
GENERAL

1.

In

this

Agreement,

3

DEFINITIONS

unless

the

requires
(a)

(i)

the

term "Singapore" comprises the territory

4

of the Republic of Singapore
its

laws

the

Republic

rights
the

and

or

as

defined

in

the adjacent areas over which
of

Singapore

jurisdiction

has

sovereign

in accordance

with

provisions of the United Nations Conven-

tion on the Law of the Sea, 1982;

(ii) the term "Indonesia" comprises the
of

the

Republic

of Indonesia as defined in

its laws and the adjacent
the

Republic

of

areas

Indonesia

rights or jurisdiction in
the provisions

territory

over

which

has sovereign

accordance

with

of the United Nations Conven-

tion on the Law of the Sea, 1982;

(b)

the

terms

Contracting

''a

Contracting

State" and "the other

State" mean Indonesia or Singapore as

the context requires;

(c)

the term "tax" means Indonesian tax

or

Singapore

tax as the context requires;

(d)

the
pany

term "person" includes an individual,
and

any

other

body

of

persons

treated as an entity for tax purposes;

5

a comwhich is

(e)

the term "company" means any body corporate or any
other entity which is treated as a body

corporate

for tax purposes;

(f)

the

terms "enterprise of a Contracting State" and

''enterprise of the other Contracting
respectively
dent of a
carried

State"

mean

an enterprise carried on by a resi-

Contracting

State

and

an

enterprise

on by a resident of the other Contracting

State;

(g)

the term "national" means:

(i)

any individual possessing the nationality

or

citizenship of a Contracting State;

(ii) any

legal person,

partnership,

association

and any other entity deriving their status as
such from the laws in force in a

Contracting

State;

(h)

the

term

transport

"international

traffic"

means

any

by a ship or aircraft which is operated

by an enterprise of one of the Contracting States,
except

when

the

ship

6

or

aircraft

is operated

solely between places

in

the

other

Contracting

State;

(i)

the term "competent authority" means:

(aa) in

the

case

of Indonesia,

the Minister of

Finance or his authorised representative;

(bb) in the case of Singapore,

the

Minister

for

Finance or his authorised representative.

2.

As

regards

Contracting State,
shall,

unless

the

the

application of this Agreement by a

any term not defined

context otherwise requires,

meaning which it has under
State

relating

to

in this Agreement

the

laws

of

that

have the

Contracting

the taxes which are the subject of this

Agreement.

Article
FISCAL

1.
dent

4

DOMICILE

For the purposes of this Agreement,
of

resident

a
in

Contracting State"
a

Contracting

Contracting State.

This

means

the term "a
any

person

resiwho is

State for tax purposes of that
term

shall

7

not

include a per-

manent establishment of a foreign

enterprise

which

is

treated as a resident for tax purposes.

2.

by

Where

reason of the provisions of paragraph 1 an

individual is a resident of both
his

shall

status

Contracting

States,

then

be determined in accordance with the

following rules

(a)

he shall be deemed to be a resident
tracting

State

in

available to him.
available

the

Con-

which he has a permanent home
If

he has

a permanent

home

him in both Contracting States,

to

shall be deemed to be a resident
State

tracting

of

with

of

the

he
Con-

which his personal and

economic relations are closest

(centre

of

vital

interests);

(b)

if

the

Contracting

State

in

which

he has his

centre of vital interests cannot be determined, or
if he has not a permanent home available to him in
either Contracting State, he shall be deemed to be
a resident of the Contracting State

in

which

he

has an habitual abode;

(c)

if

he

States

has
or

an habitual abode in both Contracting
in

neither
8

of

them,

the

competent

authorities of the Contracting States shall settle
this question by mutual agreement.

3.

Where

by

person other
Contracting

reason of the

than

an

individual is

States,

Contracting States

provisions of paragraph 1 a

the

shall

a

resident

competent

settle

the

of

both

authorities of the
question

by

mutual

agreement.

Article
PERMANENT

1.

5

ESTABLISHMENT

For the purposes of this Agreement, the term "permanent

establishment" means a fixed place of business through which
the

business

of the enterprise is wholly or partly carried

on.

2.

The

term

"permanent

establishment"

especially:

(a)

a place of management;

(b)

a branch;

(c)

an office;

(d)

a factory;

(e)

a workshop;

(f)

a farm or plantation;
9

shall

include

(g)

a

mine,

an

oil

or gas well,

a quarry or other

place of extraction of natural resources;
(h)

a building site or construction,
assembly

project

which

installation

or

exists for more than 183

days;
(i)

the

furnishing

sultancy

of

services,

services,

including

by an enterprise through an

employee or other person (other than an
an

independent

status

within

the

agent

of

meaning

of

paragraph 7) where the activities continue
a

Contracting

con-

State

for

aggregating more than 90

within

a period or periods

days

within

a

twelve-

month period.

3.

The

term ''permanent establishment" shall not be deemed

to include:

(a)

the use of facilities solely for
storage

or

display

of

goods

the
or

purpose

of

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
10

belonging to the enterprise solely for the purpose
of processing by another enterprise;

(d)

the maintenance
solely

for

of
the

a

fixed

place

of

business

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,

supply of information,

for scientific research or

for

the

for similar activities which have a preparatory or
auxiliary character, for the enterprise.

4.

An enterprise of a Contracting State shall be deemed to

have a permanent
State

establishment

in

the

other

Contracting

if it carries on supervisory activities in that other

State for more than 6 months in connection with a

construc-

tion, installation or assembly project which is being undertaken in that other State.

5.

A person acting in one of the Contracting States for or

on

behalf of an enterprise of the other Contracting State -

other than
paragraph

an

agent

of

an

independent

status

to

whom

6 of this Article applies - shall be deemed to be

a permanent establishment in the first-mentioned State, if 11

(a)

and habitually exercises,

he has,
mentioned

State

contracts

for

unless

a

in the

first-

general authority to conclude

or on behalf

of

the

enterprise,

his activities are limited to the purchase

of goods or merchandise for the enterprise; or

(b)

he habitually

maintains

in

the

first-mentioned

State a stock of goods or merchandise belonging to
the

enterprise

goods

or

from

which he regularly delivers

merchandise

for or on

behalf

of

the

enterprise.

6.

Notwithstanding

Article,

the

preceding

an insurance enterprise

of

provisions
a

of this

Contracting

State

shall, except in regard to re-insurance, be deemed to have a
permanent establishment in the other Contracting State if it
collects

premiums

in

the territory of that other State or

insures risks situated therein through a person
an

agent

of

an

independent

status

to

other

than

whom paragraph 7

applies.

7.

An

deemed

enterprise
to

have

of

a

Contracting

a permanent

State

establishment

shall not be
in

the

other

Contracting

State

merely because it carries on business in

that

State

through

other

a

broker,

12

general

commission

agent or any other agent of
such

persons

are

acting

an

independent

in

status,

where

the ordinary course of their

business.

However,

when the activities

of

such

an

agent

are

devoted wholly or almost wholly on behalf of the enterprise,
he shall not be considered an agent of an independent status
within the meaning of this paragraph.

8.

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

make either company a permanent establishment of the other.

Article

1.

Income

INCOME

FROM

derived

by

6

IMMOVABLE

a

PROPERTY

resident of a Contracting State

from immovable property situated in

the

other

Contracting

State may be taxed in that other State.

2.

For the purposes of this Agreement, the term "immovable

property"

shall

be

defined in accordance with the laws of

13

the

Contracting State

situated.

The

in which the property in question is

term

accessory to immovable

shall in any case include property
property,

livestock

and

equipment

used in agriculture and forestry, rights to which the provisions

of

general

law

respecting

usufruct of immovable property and
fixed

landed
rights

property apply,
to

variable

payments as consideration for the working of,

right to work, mineral deposits, oil or gas wells,
and

or

or the
quarries

other places of extraction of natural resources includ-

ing timber or

other

forest

produce.

Ships,

boats

and

aircraft shall not be regarded as immovable property.

3.

The

provisions

of

paragraph 1 shall also apply to

income derived from the direct use,

letting,

or use in any

other form of immovable property.

4.

The

provisions

of paragraphs 1 and 3 shall also apply

to the income from immovable property of an
to

income

enterprise

and

from immovable property used for the performance

of professional services.

Article
BUSINESS

1.

The

profits

of

7

PROFITS

an enterprise of a Contracting State

14

shall be taxable only in that State

unless

the

enterprise

carries on business in the other Contracting State through a
permanent establishment situated therein.
carries

on

business

as

aforesaid,

If the enterprise
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.

Where

an

enterprise of a Contracting State carries on

business in the other Contracting State through a
establishment

situated

therein,

Contracting State be attributed
lishment

the

there

to

that

shall

in each

permanent

estab-

profits which it might be expected to make if

it were a distinct and separate enterprise
same

permanent

engaged

in

the

or similar activities under the same or similar condi-

tions and dealing wholly independently with

the

enterprise

of which it is a permanent establishment.

3.

In

determining

the

profits

lishment,

there shall be allowed

including

executive

which
were

would
an

and

independent

as

general

be deductible if

of

a

permanent

deductions

estabexpenses

administrative expenses,

the permanent establishment

enterprise,

insofar,

as

they

are

reasonably allocable to the permanent establishment, whether
incurred

ln

the State in which the permanent establishment

is situated or elsewhere.

15

4.

If the information available to the competent authority

is inadequate to determine the profits to be attributed
the

permanent

establishment

of an enterprise,

to

nothing in

this Article shall affect the application of any law of that
State relating to the
of

a person

determination

by the exercise of a

of the

tax

liability

discretion or the making

of an estimate by the competent authority, provided that the
law shall be applied,
to

so far as the information

available

the competent authority permits, in accordance

with the

principle of this Article.

5.

For

the

profits to be
shall

be

purposes
attributed

of

the
to

the

preceding paragraphs,
permanent

the

establishment

determined by the same method year by year unless

there is good and sufficient reason to the contrary.

6.
with

Where profits include items of income which
separately

are

dealt

in other Articles of this Agreement,

the provisions of those Articles shall not

be

then

affected

by

the provisions of this Article.

7.

No

profits

shall

be attributed to a permanent estab-

lishment by reason of the mere purchase

by

that

permanent

establishment of goods or merchandise for the enterprise.

16

Article
SHIPPING

1.
from

AND

8

AIR

TRANSPORT

Income derived by an enterprise of a Contracting
the

operation

of

aircraft

State

in international traffic

shall be taxable only in that Contracting State.

2.
from

Income derived by an enterprise of a Contracting

State

the operation of ships in international traffic may be

taxed in the other Contracting State, but the tax imposed in
that other State shall be reduced by an amount equal

to

50

per cent thereof.

3.

The

provisions

of paragraphs 1 and 2 shall also apply

to the share of the income from the operation
aircraft

derived

of

ships

or

by

an

enterprise of a Contracting State

through participation

in

a pool,

a joint business

or

an

international operating agency.

Article
ASSOCIATED

9

ENTERPRISES

Where -

(a)

an

enterprise of a Contracting State participates

directly or indirectly in the management,
17

control

or capital of an enterprise of the other Contracting State; or

(b)

the

same

persons

participate

directly in the management,
an

enterprise

of

a

directly

or

in-

control or capital of

Contracting State and an

enterprise of the other Contracting State;

and in either case conditions are made
the

enterprises

two

relations which differ
between
but

for

independent
those

or

imposed

between

in their commercial or financial

from

those

enterprises,

conditions,

have

which

would

be

made

any profits which would,
accrued to one

of

the

enterprises, but, by reason of those conditions, have not so
accrued,

may

be included in the profits of that enterprise

and taxed accordingly.

Article

10

DIVIDENDS

1.
a

Dividends
Contracting

paid

by

a company which is a resident

of

State to a resident of the other Contracting

State may be taxed in that other State.

2.

However, such dividends may be taxed in the Contracting

State of which the company paying the dividends is
18

a

resi-

dent,

and

according

to the law of that State,

but if the

recipient is the beneficial owner of the dividends

the

tax

so charged shall not exceed

(a)

10

per

cent of the gross amount of the dividends

if the recipient is a company which owns

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

1n all other cases.

The competent authorities
shall

of

the

Contracting

States

by mutual agreement settle the mode of application of

these limitations.

The provisions of this paragraph shall not
taxation

of

the

company

on

affect

the

the profits out of which the

dividends are paid.

3•

this

Notwithstanding
Article

the

provisions

of

paragraph

of

as long as Singapore does not impose a tax on

dividends in addition to the tax chargeable on
or income of a company,

dividends

the

profits

paid by a company which

is a resident of Singapore to a resident of Indonesia
be

2

shall

exempt from any tax in Singapore which may be chargeable
19

on dividends in addition to

the

tax

profits or income of the company.

chargeable

However,

on

the

when Singapore

imposes a tax on dividends in addition to the tax chargeable
on

the

profits

prescribed

or

income

under

the

of

a

company,

the

rate

as

provisions of paragraph 2 of this

Article shall apply.

4.

The

income

term

"dividends" as used in

from shares or other rights,

participating
corporate

in

rights

profits,
which

is

this

Article

means

not being debt-claims,

as well as

income

from

other

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.

5.

The provisions of paragraphs 1 and 2 shall not apply if

the

recipient

of

Contracting State,
which

the

the dividends,

being a resident of a

has in the other Contracting

State,

company paying the dividends is a resident,

of
a

permanent establishment with which the holding by virtue

of

which the dividends are paid is effectively connected.

In

such a case, the provisions of Article 7 shall apply.

6.

Where a company which is a resident

State

derives

State,

that

of

a

Contracting

profits or income from the other Contracting
other

State

may

not

20

impose

any tax on the

dividends paid by the company to persons who are
dents

of

that

other State,

not

nor subject the company's un-

distributed profits to a tax on undistributed profits,
if

the

dividends

paid

or

resi-

undistributed

even

profits consist

wholly or partly of profits or income arising in such

other

State.

Dividend shall be deemed to arise

(a)

in Singapore:
if

it is paid by a company resident in Singapore;

or

(b)

in Indonesia:
if it is paid by a company resident in Indonesia.

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 Con-

tracting State in which it arises, and according to the laws

21

•

of that State,
owner

but if

of the interest,

the

recipient

is

the

beneficial

the tax so charged shall not exceed

10 per cent of the gross amount.

3.

Notwithstanding the provisions of paragraph 2, interest

arising in a Contracting State and paid to a resident of the
other Contracting State shall be taxable only in that

other

State, if the interest is paid in respect of :

(a)

a

bond,

debenture or other similar obligation of

the government of the first-mentioned State
political

or

a

subdivision or local authority thereof;

or

(b)

a loan made,
extended,

guaranteed or insured,

guaranteed

or

or the "Bank

(The

Indonesia) ,

Bank

lending institution,
agreed

of

credit

insured by the Monetary

Authority of Singapore,
Central

or a

as may

be

Indonesia"
or any other

specified

and

in letters exchanged between the competent

authorities of the Contracting States.

4.
shall

The competent authorities

of

the

Contracting

States

by mutual agreement settle the mode of application of

the limitations prescribed in the preceding paragraphs.

22

5.

Notwithstanding the provisions of paragraphs 2

the

Government

and

3,

of a Contracting State shall be exempt from

tax in the other Contracting State in

respect

of

interest

derived from that other State.

6.

For the purposes of paragraph 5, the term "Government":

(a)

in

the

case of Singapore means the Government of

Singapore and shall include :

(i)

the Monetary Authority of Singapore

and

the

Board of Commissioners of Currency;
(ii)

the

Government of

Singapore Investment Cor-

poration Pte Ltd;
(iii)

(aa) Port of Singapore Authority;
(bb) Public Utilities Board;
(cc) Telecommunication

Authority

of

Singapore; and
(iv)

any statutory body,
tion

as

public body or

institu-

may be agreed between the competent

authorities of the Contracting States;

(b)

in the case of Indonesia means the

Government

the Republic of Indonesia and shall include :

(i)

a local authority;
23

of

(ii)

Indonesia

Bank

(The

Bank

Central

of

Indonesia)
(iii)

any

statutory body,

public body or institu-

tion as may be agreed between

the

competent

authorities of the Contracting States.

The

7•

"interest"

term

income from

debt-claims

secured

mortgage and whether or not carrying a right to

by

participate in the
income

from

debentures,

of

as used in this Article means

debtor's

every

kind,

profits,

whether

and

in

or

not

particular,

government securities and income from bonds or
including premiums and prizes attaching to such

securities, bonds or debentures.

8.

The provisions of paragraphs 1, 2 and 3 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, and the debt-claim
in

respect

of

which the interest is paid is effectively

connected with such permanent

establishment.

In

such

a

case, the provisions of Article 7 shall apply.

9.
State

Interest

shall

be

deemed

to

arise in a Contracting

when the payer is that State itself, a political sub-

24

a statutory body or a resident

division, a local authority,
of

Where,

that State.

however,

the person paying the

interest, whether he is a resident of a Contracting State or
not,

has in a Contracting State a permanent estabishment in

connection

with

which

the

interest is paid was incurred,
by

indebtedness

and such interest

such permanent establishment,

be deemed

to arise

in the

on which the
is

borne

then such interest shall

State in

which

the

permanent

establishment is situated.

10.

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,

which

would

have

been

agreed

upon by the

beneficial owner in the absence of
provisions

of

this

mentioned amount.
payments

Article

exceeds the amount

such

payer and the

relationship,

the

shall apply only to the last-

In such case,

the excess part

of

the

shall remain taxable according to the laws of each

Contracting State,

due regard being had to the other provi-

sions of this Agreement.

Article

12

ROYALTIES

1.

Royalties

arising in a Contracting State and paid to a
25

resident of the other Contracting State may be taxed in that
other State.

2.

However, such royalties may be taxed in the Contracting

State in which they arise,
State,

but

and according to the law of that

if the recipient is the beneficial owner of the

royalties,

the tax so charged shall not exceed 15 per

cent

of the gross amount of the royalties.

The

competent

authorities

of

the Contracting States

shall by mutual agreement settle the mode of application

of

this limitation.

3.

The term "royalties" as used in this Article means pay-

ments

of

any

kind received as a consideration for the use

of, or the right to use, any copyright of literary, artistic
or scientific work including cinematograph films
or

tapes for radio or television broadcasting,

trade

mark,

design

or

model,

plan,

secret

and

films

any patent,
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.
shall

The provisions of paragraphs 1 and 2

this

Article

not apply if the recipient of the royalties,

being a

resident of a Contracting State,
26

of

has in the other Contract-

ing

State in which the royalties arise,

a permanent estab-

lishment with which the right or property giving rise to the
royalties is effectively connected.

In such

a

case,

the

provisions of Article 7 shall apply.

5.

Royalties

shall

be

deemed

to arise in a Contracting

State when the payer is that State itself,
division,

a local authority, a statutory body or a resident

of that State.
royalties,

a political sub-

Where,

whether

however,

the

person

paying

the

he is a resident of a Contracting State

or not, has in a Contracting State a permanent establishment
in connection with which the liability to pay the

royalties

was incurred, and such royalties are borne by such permanent
establishment,

then such royalties shall be deemed to arise

in the Contracting

State

in

which

the

permanent

estab-

lishment is situated.

6.

The provisions of paragraphs 1, 2 and 5 of this Article

shall likewise apply to proceeds arising from the alienation
of any copyright of scientific work, any patent, trade mark,
design or model, plan, or secret formula or process.

7.

Where,

owing

to

payer and the beneficial

a

special
owner

relationship between the

or between both of them and

some other person, the amount of the royalties paid,
regard

to the use,

having

right or information for which they are
27

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 that case, the excess

part of the payments shall remain taxable according
laws of each Contracting State,

to

the

due regard being had to the

other provisions of this Agreement.

Article
INDEPENDENT

1.

Income

respect of

13

PERSONAL

SERVICES

derived by a resident of a Contracting State in
professional

services

or other activities

of

an independent character shall be taxable only in that State
unless

he

is

present in the other Contracting State for a

period or periods exceeding in the aggregate 90 days in
twelve-month period.

If he remains in that other State for

the aforesaid period or periods,
that

other

State

any

but

the income may be taxed in

only so much of it as 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,

lawyers,

engineers,

accountants.
28

architects, dentists and

Article
DEPENDENT

14

PERSONAL

SERVICES

1.

Subject to the provisions of Articles 15,

and

20,

salaries,

wages

and

other

17,

18,

19

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

as

is

paragraph

1,

exercised,

such

remuneration

derived therefrom may be taxed in that other State.

2.

Notwithstanding

the

remuneration derived
State

in

respect

Contracting State

by
of

shall

provisions
a

resident

of
of

a

Contracting

an employment exercised in the other
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 in the calendar year concerned; and
(b)

the remuneration is paid by,

or on behalf of,

employer who is a resident of the

an

first-mentioned

State; and
(c)

the

remuneration

is not borne by a permanent es-

tablishment which the employer has
State.
29

in

the

other

3.

Nothwithstanding

the provisions of paragraphs 1 and 2,

remuneration derived in respect of
aboard

an

employment

exercise

a ship or aircraft operated in international traffic

by an enterprise of a Contracting

State

shall

be

taxable

only in that State.

Article

15

DIRECTORS'

1.

Director's fees and similar payments derived by a resi-

dent

of

a Contracting State in his capacity as a member of

the board of directors
of

FEES

the

other

of

a

company which is

a

resident

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

14.

Article
ARTISTES

1.

Notwithstanding

the

16

AND

ATHLETES

provisions of Articles 13 and 14,

30

income

derived

entertainer,

by

a resident of a Contracting State as an

such as a theatre,

television artiste,
his personal

motion picture,

or a musician,

activities as

such

radio

from

or as an athlete,
exercised

in

the

or

other

Contracting State, may be taxed in that other State.

Such income shall,
other

however, be exempt from tax in that

State if such activities

substantially,

from

the

are

supported,

wholly

or

public funds of the Government of

either Contracting State or a local authority or a statutory
body thereof.

2.

Where income in respect of

personal

activities

exer-

cised in a Contracting State by an entertainer or an athlete
in

his

capacity

as such accrues not to the entertainer or

athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7,

13

and

14,

be

taxed in that State.

Such income shall,

however, be exempt from tax in that

State if such activities are supported,
tially,

from

the

Contracting State or

wholly or

substan-

public funds of the Government of either
a local authority or a statutory

thereof.

31

body

Article

17

PENSIONS

Subject

to the provisions of Article 18,

other similar remuneration arising in
and

paid

to

a

a

pensions and

Contracting

State

resident of the other Contracting State in

consideration of past employment may be taxed in the

first-

mentioned State.

Article
GOVERNMENT

1.

(a)

18
SERVICE

Remuneration, other than a pension, paid by a Contracting

State

or a political subdivision or a

local authority or a statutory body thereof to

an

individual in respect of services rendered to that
State

or political subdivision or local authority

or statutory 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 State and
resident of that State who

32

the

individual

is

a

II

(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.

Any

pension paid by,

Contracting

State

or

a

or out of funds
political

created

by,

a

subdivision or a local

authority or a statutory body thereof to

an

individual

1n

respect of services rendered to that State or political subdivision

or

local

authority or statutory body shall be

taxable only in that State.

3.

The provisions of Articles 14, 15 and 17 shall apply to

remuneration and pensions in respect of services rendered 1n
connection with
Contracting

any

State

trade or
or

a

business

political

carried

on

by

a

subdivision or a local

authority or a statutory body thereof.

Article
TEACHERS

1.

AND

19

RESEARCHERS

An individual who is a resident of a Contracting

immediately

before

State,

who,

and

State

making a visit to the other Contracting
at

the

invitation

33

of any

university,

college,

school or other similar

educational

institution,

visits that other State for a period not exceeding two years
solely

for

the

purpose of teaching or research or both at

such educational institution shall be
that

other

State

exempt

from

tax

in

on any remuneration for such teaching or

research.

2.
such

This Article shall not apply to income from research if
research

is

undertaken

primarily

for

the

private

benefit of a specific person or persons.

Article
STUDENTS

An

20

AND

TRAINEES

individual who is a resident of a Contracting State

immediately before making a visit to the

other

Contracting

State and is temporarily present in the other State solely :

(a)

as a student, at a recognised university, college,
school

or

other similar recognised educational

institution in that other State;

(b)

as a business or technical apprentice; or

(c)

a recipient of a grant, allowance or award for the

34

primary purpose of
from

the

study,

Government

scientific,

research

of

either

educational,

organisation

or

under

or

training

State or from a

religious or charitable
a

technical

assistance

programme entered into by the Government of either
State;

shall be exempt from tax in that other State on

(a)

all remittances from abroad for
his

maintenance,

education,

the

purposes

study,

of

research or

training;

(b)

the amount of such grant, allowance or award; and

(c)

any

remuneration

not exceeding United States

Dollars two thousand
respect

of

two

hundred

per

annum

services in that other State provided

the services are performed in connection with
study,

in

research

his

or training or are necessary for

the purposes of his maintenance.

Article
INCOME

The

laws

NOT

21

EXPRESSLY

in force in

each
35

MENTIONED

Contracting

State

shall

continue

to govern the taxation of income in the respective

Contracting States except where

express

provision

to

the

contrary has been made in this Agreement.

Article
OF

LIMITATION

Where

this

Agreement

22
RELIEF

provides (with or without other

conditions) that income from sources in a Contracting

State

shall be exempt from tax, or taxed at a reduced rate in that
State

and

under the laws in force in the other Contracting

State the said income is subject to tax by reference to
amount

thereof

which

is

remitted

the

to or received in that

other State and not by reference to the full amount thereof,
then the exemption or reduction of tax to be

allowed

under

this Agreement in the first-mentioned State shall apply only
to

so

much

of the income as is remitted to or received in

that other State.

Article
ELIMINATION

1.

Subject to the provisions

regarding
tax

OF

allowance

payable

in a

as

23

DOUBLE

of

TAXATION

the

laws

of

Indonesia

a credit against Indonesian tax of

territory outside Indonesia (which shall

36

not affect the general principle hereof) ,

tax payable under

the laws of Singapore and in accordance with this Agreement,
whether

directly

or

by deduction,

on profits

or

income

a

credit

from sources within Singapore shall be allowed as

against any Indonesian tax computed by reference to the same
profits or income by reference to which the Singapore tax is
computed.

The credit shall not,

of the Indonesian tax,

however, exceed that part

as computed

before

the

credit

is

given, which is appropriate to such item of income.

2.

Subject

to

the

provisions

of

the laws of Singapore

regarding allowance as a credit against Singapore tax of tax
payable in a territory outside Singapore
affect the general principle hereof) ,
laws of Indonesia and in
whether

directly

or

accordance

by deduction,

(which

shall

tax payable under the
with

this

on profits

Agreement,
or

income

a

credit

from sources within Indonesia shall be allowed as
against

any Singapore tax computed by reference to the same

profits or income by reference to which the
is

not

computed.

The credit shall not,

part of the Singapore tax,

Indonesian

however,

tax

exceed that

as computed before the credit is

given, which is appropriate to such item of income.

37

Article

24

NON-DISCRIMINATION

1.

The

of a Contracting State shall not be

nationals

subjected in the other Contracting State to any taxation
any requirement connected therewith,
burdensome
which

than

which is other or more

the taxation and connected requirements to

nationals

circumstances

or

of

and

that

under

other

State in

the

same

the same conditions 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

in

the

same

circumstances and under the same conditions.

3.

Enterprises

of

a

Contracting

State,

the capital of

which is wholly or partly owned or controlled,
indirectly,
ing State,

directly

or

by one or more residents of the other Contractshall 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

38

the first-mentioned State are or may

be

subjected

in

the

same circumstances and under the same conditions.

4.

Nothing

contained

in paragraphs 1,

2 and 3 of this

Article shall be construed as -

(a)

obliging a Contracting State to grant to residents
of

the other

Contracting

State

any

personal

allowances, reliefs and reductions which it grants
to its own residents;

(b)

affecting

any

respective

provisions of

Contracting

the tax laws of the

States

regarding the im-

position of tax on non-resident persons as such;

(c)

obliging a Contracting State to grant to nationals
of

the

other

allowances,
purposes

Contracting
reliefs

which

and

State those personal
reductions

as

tax

it grants to its own citizens who

are not resident in that State or
persons

for

to

such

other

may be specified in the taxation laws

of that State; and

(d)

affecting any provisions of the tax
respective

Contracting States

39

laws

regarding

of

the

any tax

concessions

granted

to

persons

fulfilling

specified conditions.

5.

In this Article the term "taxation" means

taxes

which

are the subject of this Agreement.

Article
MUTUAL

1.

Where

25

AGREEMENT

PROCEDURE

a resident of a Contracting State considers that

the actions of one or both of the Contracting States
or

will

this

result for

Agreement,

him in taxation not in accordance with

he

may,

notwithstanding

provided by the national laws of those States,
case

the

remedies

present

the

to the competent authority of the Contracting State of

which he is a resident.
three

result

years

from

The case must be presented

within

the date of the first notificaton of the

action resulting in taxation

not

in

accordance

with

the

provisions of the Agreement.

2.

The competent authority shall endeavour,

tion appears
able

to

if the objec-

to it to be justified and if it is not

arrive at an appropriate solution,

itself

to resolve the

case by mutual agreement with the competent authority of the
other

Contracting

State,

with

40

a view to the avoidance of

taxation which is not in accordance with this Agrement.
an

agreement

is

reached,

it

shall

be

If

implemented not-

withstanding any time limits prescribed in the tax

laws

of

the Contracting States.

3.

The

shall

competent

endeavour

difficulties
application
together

for

to

or
of

authorities
resolve

of

by

the Contracting States
mutual

agreement

any

doubts arising as to the interpretation or
the

the

Agreement.

They

may

also

consult

eliminations 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

applying the provisions of this Agreement.

Article
EXCHANGE

1.

OF

The competent authorities

26

INFORMATION

of

the

Contracting

States

shall exchange such information as is necessary for carrying
out

the

provisions

of this Agreement for the avoidance of

double taxation and prevention of evasion of
by

this

Agreement.

taxes

covered

Any information so exchanged shall be

treated as secret and shall be disclosed only to any persons

41

or authorities (including a Court or
concerned

with the assessment,

prosecution in respect of,
in

relation

to,

the

reviewing

collection,

authority)

enforcement or

or the determination of

taxes

which

appeals

are the subject of the

Agreement.

2.

In

no

case shall the provisions

of

paragraph

l

be

construed so as to impose on a Contracting State the obligation :

(a)

to

carry

with

out administrative measures at variance

the laws and

the administrative practice of

that or of the other Contracting State;

(b)

to

supply particulars which

under

the

laws

are

not

obtainable

or in the normal course of the

administration of that or of the other Contracting
State;

(c)

to supply information

which

would

disclose

any

trade, business, industrial, commercial or professional

secret

the disclosure

or trade process,
of

which

public policy.

42

would

or information,
be

contrary

to

Article
AGENTS

DIPLOMATIC

Nothing
privileges

in this
of

27

AND

CONSULAR

Agreement

shall

OFFICERS

affect

the

fiscal

diplomatic agents or consular officers under

the general rules of international law or under

the

provi-

sions of special agreements.

Article
ENTRY

l.

This

the

Contracting

28

INTO

FORCE

Agreement shall be ratified by the Governments of
States and the instruments of ratification

shall be exchanged at Singapore as soon as possible.

2.

This Agreement shall enter into force upon the exchange

of instruments of ratification and shall have effect -

(a)

in Singapore:
in respect

of

Singapore

assessment

beginning on or after l January in the

second calendar year
which
has

tax

following

for

the

the

year

year

of

in

the exchange of instruments of ratification
taken

place

and

assessment;

43

subsequent

years

of

(b)

in Indonesia:
in respect of Indonesian
beginning

on

or

tax

for

the

tax

year

after 1 January in the calendar

year next following the year in which the exchange
of instruments of ratification has taken place and
subsequent tax years.

Article

29

TERMINATION

This Agreement shall remain in force
by

a

Contracting

State.

terminate the Agreement,
giving

written

Either
through

notice

until

Contracting

diplomatic

period

State may

channels,

by

of termination on or before the

Thirtieth day of June of any calendar year
the

terminated

following

after

of five years from the year in which the Agree-

ment enters into force.

In such event,

the Agreement shall

cease to have effect -

(a)

in Singapore:
in

respect

of

Singapore

tax

for

the

year of

assessment beginning on or after 1 January in
second
the

calendar

notice

is

the

year following the year in which
given

assessment;
44

and

subsequent

years

of

(b)

in Indonesia:
1n respect of Indonesian
beginning

on

or

tax

for

the

tax

year

after 1 January in the calendar

year next following the year in which

the

notice

is given and subsequent tax years.

IN

WITNESS

WHEREOF

the

undersigned,

being

duly

authorised thereto, have signed this Agreement.

Done in duplicate at Singapore on this

eighth

day

of

May 1990, in the English language.

For the Government of the
ｒ･ｰｵ｢ｬｩｾ＠

ｯｾ＠

For the Government of the

Indonesia

Republid iGf

Signed
TUK

ｾｩｮｧ｡ｰｯｲ･＠

Signed

SE'!'YOlmDI

HSU

45

ｪＬｦＧｓｑＭｋｾｎｇ＠

PROTOCOL

1.

At the

Government

time
of

of

and

Agree\ ent

Singapore for the

between

the

Avoidance

of

Double

the Prevention of Fiscal Evasion with respect

to Taxes on Income,
following

the

the Republic of Indonesia and the Government

of the Republic of
Taxation

signing

both Governments have agreed

provisions

shall

form

an

that

the

integral part of the

Agreement.

2.

In respect of paragraph 2(h) of

Establishment",

it

is

understood

months shall apply to an assembly

Article
that

or

5

"Permanent

a time limit of 3

installation

project

performed by a person other than the main contractor.

3.

In

connection

nothing in this
ing
tax,

Article

with

Article 7 "Business Profits",

shall

State from imposing,

prevent

either

apart from the corporate income

a branch profits tax on the after tax profits

permanent

establishment,

provided

In connection with Article 10 "Dividends":

1

of

the

that the tax so imposed

shall not exceed 15 % of such amount.

4.

Contract-

(a)

Nothing in this Article shall
sions

in

contained

affect

any

the

production

provisharing

contracts relating to the exploitation and production of oil
negotiated
the

and
with

relevant

provided

natural
the

oil

contract

have

been

company

of

or

Indonesia,

company which is resident in

a

income

Singapore deriving
sharing

which

Government of Indonesia

state

that

gas

shall

from

not

be

a

production

less favourably

treated with respect to tax than that levied on
company

a

of any third state deriving income from a

similar production sharing contract.

(b)

Article VII of the Agreement between
ment

the

Govern-

of the Republic of Singapore and the Govern-

ment of Malaysia for the Avoidance of Double Taxation and the Prevention
respect

of

Fiscal

Evasion

with

to Taxes on Income signed in Singapore on

26th December,

1968,

shall be

taken

into

con-

being

duly

sideration.

IN

WITNESS

WHEREOF

the

undersigned,

authorised thereto, have signed this Protocol.

2

DONE in duplicate at Singapore on this

eighth

day

of

May 1990 in English language.

For the Government of
the Republic of Indonesia

For the Government of
the Republic of Singapore

Signed

Signed

TUK

SETYOHADI

HSU

3

TSE-KWA'1JG