Law Approving The Convention Between The Kingdom Of Belgium And The Republic Of Indonesia For The Avoidance Of Double Taxation And Fiscal Evasion With Respect To Taxes On Income And The Protocol, Made In Jakarta On 16 September

Original Language Title: Loi portant assentiment à la Convention entre le Royaume de Belgique et la République d'Indonésie tendant à éviter les doubles impositions et à prévenir l'évasion fiscale en matière d'impôts sur le revenu, et au Protocole, faits à Djakarta le 16 septembre

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Posted the: 2002-03-29 Numac: 2001015134 Ministry of Foreign Affairs, international trade and COOPERATION international 24 August 2001. -Law approving the Convention between the Kingdom of Belgium and the Republic of Indonesia for the avoidance of double taxation and fiscal evasion with respect to taxes on income and the Protocol, made in Jakarta on 16 September 1997 (1) ALBERT II, King of the Belgians, to all, present and future, hi.
The Chambers have adopted and we santionnons the following: Article 1. This Act regulates a matter referred to in article 77 of the Constitution.
S. 2. the Convention between the Kingdom of Belgium and the Republic of Indonesia for the avoidance of double taxation and fiscal evasion with respect to taxes on income and the Protocol, made made in Jakarta on 16 September 1997, will come out full and complete effect.
Promulgate this Act, order that it be under the seal of the State and published by le Moniteur.
Given in Brussels, August 24, 2001.
ALBERT by the King: the Minister of Foreign Affairs, L. MICHEL. the Minister of finance, the Minister of Foreign Affairs, Mrs. A. NEYTS-UYTTEBROECK seen and sealed with the seal of the State Deputy D. REYNDERS the Minister: the Minister of Justice, Mr. VERWILGHEN _ Notes (1) Session 2000 - 2001 Senate Documents. -Bill filed on March 13, 2001, no. 2 - 684/1.
-Report, n ° 2-684/2.
Parliamentary annals; -Discussion. Meeting of May 3, 2001. -Vote.
Meeting of May 3, 2001.
Room Documents. -Draft transmitted by the Senate, no. 50-1235/1.
Text adopted in plenary meeting and submitted to the Royal assent, no. 50-1235/2.
Parliamentary Annals.
-Discussion. Meeting on June 14, 2001. -Vote. Meeting on June 14, 2001.
(2) this convention entered into force on 7 November 2001.

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 THE GOVERNMENT OF THE KINGDOM OF BELGIUM AND THE GOVERNMENT OF THE REPUBLIC OF INDONESIA, 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 or 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 alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
3. The existing taxes to which the Agreement shall apply are in particular: a) 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-residents;
(v) the special levy assimilated to the individual income tax;
(vi) the supplementary crisis 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");
(b) in the case of Indonesia: the income tax imposed under the "Undang - undang Pajak Penghasilan 1984" (Law No. 7 of 1983 as amended);
(hereinafter referred to as "Indonesian tax").
4. The Agreement shall apply also to any identical 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 authorities of the Contracting States shall notify each other 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 "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;
(b) the term "Indonesia" included 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;
(c) the terms "a Contracting State" and "the other Contracting State" mean Belgium or Indonesia as the context requires;
(d) the term "tax" means Belgian tax or Indonesian tax, as the context requires;
(e) the term "person" includes an individual, a company and any other body of persons;
(f) the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes in the Contracting State of which it is a resident.
(g) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
(h) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
(i) the term "competent authority" means: (i) in the case of Belgium, the Minister of Finance or his duly authorised representative, and (ii) in the case of Indonesia, the Minister of Finance or his duly authorised representative;
(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 term 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 a 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 relations are closer (Center of vital interests);
(b) if the 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 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 a 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 term '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) a place 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 resources.
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 continues (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 of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise;
(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display;
(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or 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) e to), 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 as for the enterprise (, if such a person: has) has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph;
Gold 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 status within the meaning of this paragraph.
7. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.
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 tax 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, boats and aircraft shall 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 form of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.
ARTICLE 7 Business Profits 1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be tax 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 carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which It is a permanent establishment.
3. In 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 interest on moneys slow to the permanent establishment.
Likewise, no. account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged (otherwise than towards 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 interest on moneys slow to the head office of the enterprise or any of its other offices.
4. Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a 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 tax by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.
5. no profits shall be attributed to a permanent establishment by reason of the mother 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 this Agreement, then the provisions of those blogs 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 or 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) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, gold b) the same persons participate directly or indirectly in the management, control capital gold of an enterprise of a Contracting State and an enterprise of the other Contracting State, in and either case conditions are made or imposed between the two enterprises in trade their financial gold relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and tax accordingly.
ARTICLE 10 Dividends 1.
Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be tax in that other State.
2. However, such dividends may also be tax 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 exceed: 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 form 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 independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
5 Where a company which is a resident of a Contracting State derived 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 provisions of Article 7, to an additional tax on deemed distribution of income according to its laws , but the tax so charged shall not exceed 10 per cent of the profits thus reduced.
7. The provision 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 relevant 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 tax in that other State.
2. However, such interest may also be tax 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 from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures; However, the term "interest" shall not include for the purpose of this Article penalty charges for late payment interest nor regarded as dividends under paragraph 3 of Article 10.
5 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, 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 shall be deemed to arise in a Contracting State when the pay 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 establishment or fixed base is situated.
7. Where, by reason of a special relationship between the pay and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the pay 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 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 tax in that other State.
2. However, such royalties may also be tax 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 not exceed 10 per cent of the gross amount of the royalties.
3. The term "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 copyright of literary, artistic or scientific work including cinematograph films, or films or tapes used for radio 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 paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such 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 pay 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 establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, 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 pay 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 pay 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 tax 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 base, may be tax in that other State.
3 gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.
4. gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3, shall be taxable only in the Contracting State of which the alienator is a resident.
ARTICLE 14 Independent Personal Services 1. Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances, when such income may also be tax in the other Contracting 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 tax in that other Contracting State;
Gold 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 tax in that other State.

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, 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 tax in that other State.
2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days within any period of twelve months ((, and b) the remuneration is paid by, or on behalf of, an use who is not a resident of the other State, and c) the remuneration is not borne by a permanent establishment or a fixed base which the use has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated by an enterprise of a Contracting State in international traffic, may be tax 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 tax 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 derivatives from the company in respect of the discharge of day-to-day functions 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 by a resident of a Contracting State in respect of his personal activity as a working partner of a company, other than a company with share capital, which is a resident of the other Contracting State.
ARTICLE 17 Artistes and Athletes 1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artist, or a musician, gold as an athlete, from his personal activities as such exercised in the other Contracting State, may be tax in that other State.
2. Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such increased not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be tax in the Contracting State in which the activities of the entertainer or athlete are exercised.
3 Notwithstanding the provisions of paragraphs 1 and 2 income derived by an entertainer or athlete from his personal activities as such shall be exempt from tax in the Contracting State in which 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 tax in the first-mentioned 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 remuneration 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, teacher 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 tax 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 situated therein, or performs in that other State independent personal services from a fixed base situated therein , and the right or property in respect of which the 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 Notwithstanding 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 tax in that other State.
CHAPTER IV METHODS OF ELIMINATION OF DOUBLE TAXATION ARTICLE 22 1. In the case of Belgium, double taxation shall be avoided as follows: a) Where a resident of Belgium derived income which may be tax 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 derivatives 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 a credit against Belgian tax relating to such income.
(c) Dividends within the meaning of paragraph 3 of Article 10, derived by a company which 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.
2. In the case of Indonesia, double taxation shall be avoided as follows: a) Indonesia, when imposing tax on residents of Indonesia, may include in the basis upon which such tax is imposed the income which may be tax in Belgium in accordance with the provisions of the Agreement.
b) Where a resident of Indonesia derivatives income from Belgium and such income may be tax 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 against the Indonesian tax imposed on that resident. The amount of credit, however, shall not exceed that part of the Indonesian tax which is appropriate to such income.
CHAPTER V SPECIAL PROVISIONS ARTICLE 23 [non-discrimination 1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, 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 residents 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 other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.
3. Except where the provisions of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.
4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected.
5. Nothing contained in this Article shall be construed as preventing Belgium: has) from taxing the profits attributable to a permanent establishment in Belgium of a 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 from 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 term "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 accordance 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 authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with 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 provided for in the Agreement.
5. The competent authorities of the Contracting States shall communicate directly with each other for the implementation of the Agreement.
ARTICLE 25 Exchange of Information 1. The competent authorities 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 authorities (including short and administrative bodies) involved in the assessment 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 disclose 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, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy.
ARTICLE 26 Assistance in Collection 1. Each Contracting State shall endeavour to collect on behalf of the other Contracting State such taxes imposed by 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 by 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 law or under the provisions of special agreements.
2. The Agreement shall not apply to international organizations, 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: has) with respect to taxes due at source on income credited payable gold on or after January 1 in the year next following the year in which the Agreement enters into force;
(b) with respect to other taxes charged on income of taxable periods ending on or after December 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 November 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: has) 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 THE KINGDOM OF BELGIUM: FOR THE GOVERNMENT OF THE REPUBLIC OF INDONESIA: 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: has) 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 THE REPUBLIC OF INDONESIA: FOR THE GOVERNMENT OF THE KINGDOM OF BELGIUM: PROTOCOL At the moment of signing 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, the undersigned have agreed that the following provisions shall form an integral 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 establishment situated therein, may be tax in such other Contracting State , if the permanent establishment 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 duplicate at Jakarta, september 16, this 1997, in the English language.
FOR THE GOVERNMENT OF THE KINGDOM OF BELGIUM: FOR THE GOVERNMENT OF THE REPUBLIC OF INDONESIA: PROTOCOL At the moment of signing 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, the undersigned have agreed that the following provisions shall form an integral 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 establishment situated therein, may be tax in such other Contracting State , if the permanent establishment 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 duplicate at Jakarta, this september 16, 1997, in the English language.
FOR THE GOVERNMENT OF THE REPUBLIC OF INDONESIA: FOR THE GOVERNMENT OF THE KINGDOM OF BELGIUM: CONVENTION between the Kingdom of Belgium and the Republic Indonesia for A avoid the DOUBLE taxation and A prevent the escape tax in tax on the income the Government of Kingdom of Belgium and the Government of the Republic of Indonesia, desiring to conclude a Convention for the avoidance of double taxation and fiscal evasion with respect to taxes on income , have agreed upon the following provisions: Chapter I.
-FIELD of APPLICATION of the CONVENTION Article 1 persons covered this Convention shall apply to persons who are residents of a Contracting State or the two Contracting States.
Article 2 taxes covered 1. This Convention shall apply to taxes on income imposed on behalf of a Contracting State, its political subdivisions or its local authorities, irrespective of the collection system.
2 are considered as taxes on the income taxes imposed on total income or on elements of income, including taxes on gains from the alienation of property movable or immovable property, taxes on the total amount of salaries paid by enterprises, as well as taxes on capital gains.
3. the existing taxes to which the Convention shall apply are in particular: has) with regard to the Belgium: (i) natural persons tax;
(ii) the corporation tax;
(iii) the income tax of legal persons;
(iv) the non-resident tax;
(v) the special assessment assimilated to income tax of physical persons;
(vi) the supplementary crisis contribution;
including the prepayments, pennies additional to such taxes and withholding taxes as well as taxes additional to natural persons tax, (hereinafter referred to as "Belgian tax");
(b) in relation to the Indonesia: the income tax levied under the "Undang-undang Pajak Penghasilan 1984" (Act No. 7 of 1983 as amended);
(hereinafter referred to as "Indonesian tax").
4. the Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Convention and additional to existing taxes or place.
The competent authorities of the Contracting States shall communicate to the significant changes made to their respective taxation laws.
CHAPTER II. -DEFINITIONS Article 3 General DEFINITIONS 1. For the purposes of this Convention, unless the context otherwise requires: a) "Belgium" means the territory of the Kingdom of Belgium, including the territorial sea and maritime areas and airspace on which, in accordance with international law, the Kingdom of Belgium exercises sovereign rights or jurisdiction;
(b) the term "Indonesia" comprises the territory of the Republic of Indonesia as defined in its legislation and parts of the continental shelf and adjacent seas over which the Republic of Indonesia has, in accordance with international law, the sovereignty, sovereign rights or jurisdiction;
(c) the terms "A Contracting State" and "The other Contracting State" mean, as the context requires, the Belgium or the Indonesia;
(d) the term "tax" means, depending on the context, the Belgian tax or Indonesian tax;
(e) the term "person" includes natural persons, companies and any other body of persons;
(f) the term "company" means any legal person or any entity that is regarded as a legal person for the purposes of taxation in the State Contracting, which it is a resident.
(g) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
(h) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
(i) the term "competent authority" means: (i) with regard to the Belgium, the Minister of finance or his duly authorized representative, and (ii) in relation to the Indonesia, the Minister of finance or his duly authorized delegate;
(j) the term "national" means: (i) all individuals possessing the nationality of a Contracting State;
(ii) all legal persons, partnerships and associations established in accordance with the legislation in force in a Contracting State.
2. for the purposes of the Convention by a Contracting State, any term which is not defined have the meaning attributed to it by the law of that State concerning the taxes to which the Convention applies unless the context requires a different interpretation.
Article 4 RESIDENT 1. Within the meaning of this Convention, the expression "resident of a Contracting State" means any person who, under the legislation of that State, is liable to tax in this State, because of his domicile, residence, place of management or any other criterion of a similar nature. However, this term does not include persons who are subject to tax in a Contracting State as the income from sources in that State.
2. when, under the provisions of paragraph 1 an individual is a resident of both Contracting States, his status is set as follows: has) this person is considered a resident of the State where it has a permanent home; If it has a permanent home in the two States, it is considered a resident of the State with which his personal and economic relations are closer (centre of vital interests);
(b) if the State where he has his centre of vital interests cannot be determined, or if it has a permanent home in any of the States, it is considered to be a resident of the State where she is staying in usual manner;
(c) whether he has habitual abode in both States or if it resides habitually in any of them, the competent authorities of the Contracting States settle the question by mutual agreement.
3. where, under the provisions of paragraph 1 one person other than an individual is a resident of both Contracting States, it is considered to be a resident of the State in which its place of effective management is situated.
Article 5 permanent establishment 1. For the purposes of this Convention, the term "permanent establishment" means a fixed place of business through which a company carries on all or part of its activity.
2. the term "permanent establishment" includes especially:

(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a farm or plantation;
(g) a mine, an oil or gas, a quarry or any other place of extraction of natural resources.
3. the term "permanent establishment" also includes: a) a construction site mounting or monitoring exercising, when this project or these activities continue for a period of more than six months;
b) the supply of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for this purpose, but only where activities of that nature continue (for the same project or a connected project) within the territory of the country during one or more periods, representing a total of more than three months within a period any of twelve months.
4. Notwithstanding the preceding provisions of this article, considering that there is no "permanent establishment" so: has) it is made use of facilities for the sole purpose of storage or display of goods belonging to the enterprise;
(b) goods belonging to the company are stored for the sole purpose of storage or display;
(c) goods belonging to the company are stored for the sole purpose of processing by another enterprise;
(d) a fixed place of business is used solely to purchase merchandise or to gather information, for the enterprise;
(e) a fixed place of business is used for the sole purpose to exercise, for the enterprise, any other activity of a preparatory or auxiliary character;
((f) a fixed place of business is used for the sole purpose of fiscal year cumulative activities mentioned in paragraph a) to (e)), provided that the activity of the fixed place of business resulting from this combination set keeps a preparatory or auxiliary character.
5. Notwithstanding the provisions of paragraphs 1 and 2, where one person - other than an agent enjoying independent status which applies paragraph 6 - acts in a Contracting State in an enterprise of the other Contracting State, that enterprise shall be deemed as having a permanent establishment in the first Contracting State for all the activities that this person performs for her if the person (: a) has in this state of power, it usually carries to conclude contracts on behalf of the enterprise, unless the activities of such person are limited to those listed in paragraph 4 and which, if they were carried out in a fixed place of business, would not this fixed place of business an establishment within the meaning of that paragraph. or b) have not this power, usually keep in the first State a stock of goods on which she regularly collects goods for the purposes of delivery on behalf of the company.
6. an enterprise of one State contacting is not considered as having a permanent establishment in the other Contracting State merely that it carries on its business through a broker, general Commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary activity course.
However, when the activities of such an agent are exercised wholly or almost wholly on behalf of this company, this agent is not regarded as an independent agent within the meaning of this paragraph.
7. the fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other State Contracting or which carries on business (whether through an establishment stable or not) does not, in itself, to make one any of these companies a permanent establishment of the other.
CHAPTER III. -TAXATION of income Article 6 income real estate 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" has the meaning given to it by the law of the Contracting State where the property in question is situated. The term includes in any case accessories, livestock dead or alive's farms and forestry, rights to which the provisions of private law concerning land ownership, usufruct of real property and rights to variable or fixed payments for the exploitation or concession of exploitation of deposits minerals, sources and other natural resources; ships, boats and aircraft are not considered to be real property.
3. the provisions of paragraph 1 shall apply to income derived from the use or the direct enjoyment of the rental or leasing, as well as any other form of immovable property.
4. the provisions of paragraphs 1 and 3 shall apply also to income from real property of an enterprise and to income from real property used for the pursuit of an independent profession.
Article 7 1 corporate profits. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the company operates in the other State Contracting through a permanent establishment situated therein. If the company operates in such a way, profits of the enterprise may be taxed in the other State but only insofar as they are attributable: a) that permanent establishment, or b) to the sale of goods of identical or substantially similar to those which are sold by the permanent establishment or other commercial activities identical or similar to those that are exercised by this institution.
2. subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other State Contracting through a permanent establishment situated, it is charged, in each Contracting State, to that permanent establishment the profits that he could achieve if it had been a separate company engaged in similar activities or the like under conditions identical or similar acting independently with the enterprise of which it is a permanent establishment.
3. in determining the profits of a permanent establishment, are allowed as deductions expenses incurred for the purposes of establishment, including Executive and general expenses so incurred administration, either in the State where the permanent establishment is situated or elsewhere.
However, no deduction is allowed for amounts that would be, if any, paid (at some tracks than the reimbursement of expenses) by the permanent establishment at the headquarters of the company or any any of its offices, as royalties, fees or other similar payments, for the use of patents or other rights, or as commission, for specific services performed or for management activity or except in the case of a banking business, as interest on moneys lent to the permanent establishment. Similarly, it need not account, in determining the profits of a permanent establishment, of amounts (other than the reimbursement of expenses incurred) worn by the permanent establishment to the flow of the central seat of the undertaking or of one any of its other offices, such as royalties, fees or other similar payments, for the use of patents or other rights, or as commission for specific services performed or for management activity or except in the case of a banking business, as interest on loan at the headquarters of the company or any of its other offices.
4. If it has been customary in a Contracting State to determine the profits attributable 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 according to the distribution in use; the adopted allocation method should be such that the result is consistent with the principles contained in this article.
5. no benefit is attributed to a permanent establishment that he simply bought goods for the company.
6. for the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment are determined each year by the same method, unless there is good and sufficient contrary reasons.
7. where profits include items of income which are dealt with separately in other articles of this Convention, the provisions of these articles are not affected by the provisions of this article.
Article 8 NAVIGATION MARITIME and air 1. The profits of an enterprise of a Contracting State from operating ships or aircraft, or from the use or rental of containers constituting an ancillary activity over this operation, in international traffic shall be taxable only in that State.
2. the provisions of paragraph 1 apply also to the beneficesprovenant of the participation in a pool, a joint operation or an international operating agency.
Article 9 associated enterprises where has) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or that

(b) the same persons participate directly or indirectly in the management, to the control or capital of an enterprise of a Contracting State and one enterprise of the other Contracting State, and that, in either case, the two companies are, in their commercial or financial, relationships bound by agreed or imposed conditions which differ from those which would be agreed between independent companies , profits which, without these conditions, allegedly made by one of the companies but were not being actually due to these conditions, may be included in the profits of that enterprise and taxed accordingly.
Article 10 dividends 1.
Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed: 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 does not affect the taxation of the company in respect of the benefits that are used for the payment of dividends.
3. the term "dividends" as used in this article means income from shares, shares or dividend certificates, mining, founder shares or other rights, with the exception of claims, as well as income - even attributed in the form of interest-subjected to the same taxation treatment as income from shares by the laws of the State where the debtor company is a resident.
4. the provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the dividends, being a resident of a State Contracting, carries on in the other Contracting State of which the company paying the dividends is a resident, either an industrial or commercial activity through a permanent establishment situated therein, an independent profession through a fixed base which is located , and generating participation of dividends related actually. In this 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 State Contracting, that other State may levy no tax on dividends paid by the company, except to the extent where such dividends are paid to a resident of that other State or insofar as where the dividends generating participation relates effectively to a permanent establishment or a fixed base situated in that other State , or impose any tax in respect of the taxation of retained earnings, retained earnings of the company, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income from that other State.
6. Notwithstanding the provisions of paragraph 5, where a company which is a resident of a Contracting State has a permanent establishment in the other Contracting State, that other State may submit, in accordance with its legislation, the profits of the permanent establishment, after deduction of the tax that may be levied on these benefits under the provisions of article 7, to an additional tax on distributed alleged income , but the tax so charged shall not exceed 10 per cent of the reduced benefits.
7. the provisions of paragraph 6 affect the provisions contained in the sharing of production ("production sharing") contracts and contracts of employment (or other similar contracts) relating to sectors oil and gas or any other mining agreements no later than December 31, 1983, by the Government of the Indonesia, its agencies, its oil and gas from concerned State or any other entity of this Government company , with a person who is a resident of the 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 they come and under 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 are exempt from tax in the Contracting State they come when it comes to interest paid to the other Contracting State or any of its political subdivisions or local authorities, or the Central Bank of that other State.
4. the term "interest" as used in this article means income of claims of any nature, secured or not secured by mortgage or a right to participate in the debtor's profits, and including income on public funds and bonds debentures, including premiums and prizes attached to such securities; However, this term does not, within the meaning of this section, the penalties for late payment or interest treated as dividends under article 10, paragraph 3.
5. the provisions of paragraphs 1, 2 and 3 do not apply if the beneficial owner of the interest, being a resident of a State Contracting, carries on in the other Contracting State comes the interests, either an industrial activity or business through a permanent establishment situated therein, or independent through a fixed base which is located, and that the generator of the interest receivable related actually. In this case, the provisions of article 7 or article 14, as the case may be, shall apply.
6. the interests are considered as originating in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. However, when the debtor of interests, whether or not a resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed base, for which the debt giving rise to the payment of interest was incurred and that supports the load of these interests, these are considered as coming from the State where the permanent establishment or fixed base is located.
7. when, due to special relationship between the payer and the beneficial owner or that one and the other have with third parties, the amount of interest, taking into account the debt for which they are paid, exceeds the amount which would be agreed upon the payer and the beneficial owner in the absence of such relationship, the provisions of this article apply only to the latter amount. In this case, the excess part of the payments is taxable, in accordance with its legislation, in the Contracting State comes interests.
Article 12 royalties 1.
The royalties from 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 not exceed 10 per cent of the gross amount of the royalties.
The term "royalties" as used in this article means payments of any kind paid to use or the concession of the use of a copyright in a literary, artistic or scientific work, including cinematograph films and films or tapes for radio or television, a patent, of a trade mark or a trade, a drawing or a model a plan, a formula or process secrets, as well as to the use or the right to use industrial, commercial or scientific equipment and for information relating to experience gained in the industrial, commercial or scientific field.
4. the provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a State Contracting, carries on in the other Contracting State comes royalties, either an activity or business through a permanent establishment situated therein, or independent through a fixed base is situated, and that the right or well Builder royalty related actually. In this case, the provisions of article 7 or article 14, as the case may be, shall apply.
5. royalties shall be considered as originating in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. However, when the debtor's royalties, whether or not a resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed base, for which the contract giving rise to the payment of the royalties has been concluded and which supports the load of these charges, they are considered as coming from the State where the permanent establishment or fixed base is located.
6. when, due to special relationship between the payer and the beneficial owner or that one and the other have with third parties,

the amount of fees, taking into account the provision for which they are paid, exceeds the amount which would be agreed upon the payer and the beneficial owner in the absence of such relationship, the provisions of this article apply only to the latter amount. In this case, the excess part of the royalty remains taxable, in accordance with its legislation, in the Contracting State comes royalties.
Article 13 1 CAPITAL GAINS. 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 assets of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, or movable property which belong to a fixed base available to a resident of a Contracting State in the other Contracting State for the exercise of an independent profession, including such gains from the alienation of this establishment stable (alone or with the whole of the company) or the basic fixed may be taxed in that other State.
3. gains that an enterprise of a State Contracting from the alienation of ships or aircraft operated in international traffic, or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.
4. gains from the alienation of any property other than those referred to in paragraphs 1, 2 and 3 shall be taxable only in the Contracting State of which the alienator is a resident.
Article 14 independent PROFESSIONS 1. Income derived by a resident of a Contracting State of a liberal profession or other activities of an independent character shall be taxable only in that State except in the following circumstances when such income may also be taxed in the other Contracting State: a) if the resident has in usual way, in the other Contracting State, of a fixed basis for the exercise of its activities; in this case, only the portion of income that is attributable to that fixed base is taxable in the other Contracting State, or b) if his stay in the other Contracting State extends over a period, or periods of a duration equal to or greater than 91 days in a period any twelve months; in this case, only the portion of revenues that is derived from activities carried on in that other State is taxable in that other State.
2. the term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the activities of physicians, lawyers, engineers, architects, dentists and accountants.
Article 15 dependent PROFESSIONS 1.
Subject to the provisions of articles 16, 18, 19 and 20, salaries, wages and other similar remuneration that a resident of a Contracting State receives 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 exercised, the remuneration received for this 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 State if: a) the recipient is present in the other State for a period or periods exceeding in total 183 days in a period any twelvemonth ((, and b) the remuneration is paid by an employer, or on behalf of an employer who is not a resident of the other State, and c) the remuneration is not borne by a permanent establishment or a fixed base that the employer has in the other State.
3. Notwithstanding the preceding provisions of this article, remuneration received in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State are taxable in that State.
Article 16 Directors 1. The tokens of presence and other similar payments derived by a resident of a Contracting State in his capacity as member of the Board of directors or a similar organ or as a shareholder of a company which is a resident of the other Contracting State may be taxed in that other State.
The foregoing applies also to payments received because of the performance of duties which, under the law of the Contracting State of which the company is a resident, are treated as functions of a similar nature to those performed by a person referred to in that provision.
2. remuneration a person to which paragraph 1 applies receives from the company due to a daily activity of management or technical nature may be taxed in accordance with the provisions of article 15.
3. the provision of paragraph 2 also applies to remuneration derived by a resident of a Contracting State from his personal as an active partner in a partnership, other than a corporation, which is a resident of the other Contracting State.
Article 17 ARTISTES and SPORTSPERSONS 1. Notwithstanding the provisions of articles 14 and 15, income derived by a resident of a Contracting State from his personal activities exercised in the other Contracting State as an artist of the show, as an artist of theatre, film, radio or television, or a musician, or as a sportsperson, may be taxed in that other State.
2. where the income from activities exercised by an entertainer or a sportsperson personally and as such are attributed not to the entertainer or athlete himself but to another person, that income are taxable, notwithstanding the provisions of articles 7, 14 and 15, in the Contracting State where the activities of the entertainer or athlete are exercised.
3. Notwithstanding the provisions of paragraphs 1 and 2, income derived by an entertainer or a sportsperson from activities exercised personally in this capacity are exempt from tax in the Contracting State in which these activities are exercised if the activities are funded largely through public funds or sponsored by the other Contracting State, by one of its subdivisions policies or local authority or by a body of law of this State.
Article 18 PENSIONS under subject to the provisions of article 19, paragraph 2, pensions and other similar remuneration, from a Contracting State and paid to a resident of the other Contracting State in respect of past employment, be taxed in the first State.
Article 19 public functions 1. (a) remuneration, other than a pension, paid by a Contracting State or of its political subdivisions or local authority 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 remuneration 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) has the nationality of that State, or (ii) did not become a resident of that State solely to provide the services.
2. a) pensions paid by a Contracting State or of its political subdivisions or local authorities, either directly or by out of funds that they have established, 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 pensions are taxable only in the other Contracting State if the individual is a resident of this State and has the nationality.
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 one of its political subdivisions or local authorities.
Article 20 PROFESSORS, researchers and students 1.
A Professor, a member of the teaching staff or a researcher, who is staying temporarily in a Contracting State solely to teach and engage in research at a University, college, school or other institutions of education recognized and who is one resident of the other Contracting State, is exempt from tax in the first State for a period exceeding not two years due to payments related to this activity of teaching or research.
2. the sums as a student, an apprentice or a trainee who is, or was immediately before visiting a Contracting State, a resident of the other Contracting State and who is staying in the first State sole purpose of pursuing his studies or training, receives to cover maintenance costs, for studies or training are not taxable in that other State provided that they are derived from sources outside that State.
Article 21 other income 1. Items of income of a resident of a Contracting State, wherever they come from, who are treated not in the foregoing articles of this Convention shall be taxable only in that State.
2. the provisions of paragraph 1 do not apply to other income that income from real property as defined in article 6, paragraph 2, if the recipient of such income, resident of a State Contracting, carries on in the other Contracting State, or an industrial activity

or business through a permanent establishment situated therein, be independent through a fixed base is situated, and that the right or well generator of income related actually. In this case, the provisions of article 7 or article 14, as the case may be, shall apply.
3. Notwithstanding the provisions of paragraphs 1 and 2, items of income of a resident of a Contracting State which are not covered by the preceding articles of the present Convention and who come from the other Contracting State may also be taxed in that other State.
CHAPTER IV. -METHODS to eliminate DOUBLE taxation Article 22 1. With regard to the Belgium, double taxation shall be avoided as follows: a) where a resident of the Belgium derives income which may be taxed in Indonesia in accordance with the provisions of this Convention, with the exception of articles 10, paragraph 2, 11, paragraphs 2 and 7, and 12, paragraphs 2 and 6, the Belgium exempts from tax revenues but it can to calculate the amount of the taxes on the rest of the income of that resident, apply the same rate if the income in question had not been exempted.
((b) subject to the provisions of the Belgian law relating to the imputation tax Belgian taxes paid abroad, where a resident of the Belgium derives items of income which are included in its total income subject to Belgian tax and which consist of dividends taxable in accordance with article 10, paragraph 2, and not exempt from Belgian under c taxation) following interest taxable in accordance with article 11, paragraphs 2 to 7, or royalties taxable in accordance with article 12, paragraphs 2 or 6, the Indonesian tax levied on that income is charged against Belgian tax relating to such income.
c) dividends within the meaning of article 10, paragraph 3, that a company which is a resident of the Belgium receives from a company which is a resident of the Indonesia are exempt from tax the corporations in Belgium, under the conditions and limits laid down by Belgian legislation.
(d) where, in accordance with Belgian legislation, losses suffered by a business carried on by a resident of the Belgium to a stable establishment in Indonesia were actually deducted from the profits of this company for its imposition in Belgium, the exemption in the a) does not apply in Belgium to the profits of other taxable periods that are attributed to this establishment insofar as these benefits were also exempt from taxation in Indonesia because of their compensation with such losses.
2. with regard to the Indonesia, double taxation shall be avoided as follows: a) the Indonesia when the imposition of its residents, may include in the tax base income which may be taxed in Belgium in accordance with the provisions of the Convention.
(b) where a resident of the Indonesia derives income from Belgium and that these earnings are taxable in Belgium in accordance with the provisions of the Convention, the Belgian tax due because of these revenues is charged on Indonesian tax payable by resident. The amount of the charge cannot exceed the portion of the Indonesian tax relating to such income.
Chapter V. - provisions special Article 23 non-discrimination 1. Nationals of a Contracting State not be subjected in the other Contracting State to any taxation or obligation y, which is other or more heavy than those which are or may be subjected nationals of that other State who are in the same situation, including with regard to the residence. This provision applies also, notwithstanding the provisions of article 1, individuals who are not residents of a Contracting State or the two Contracting States.
2. the taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State is not established in that other State to less favourably than the taxation levied on enterprises of that other State carrying on the same activities.
This provision cannot be interpreted as obliging a Contracting State to grant to residents of the other State contracting the personal allowances, reliefs and reductions for tax depending on the situation or family responsibilities which it grants to its own residents.
3. unless the provisions of article 9, article 11, paragraph 7 and article 12, paragraph 6, shall apply, interest, royalties and other expenses paid by an enterprise of a Contracting State to a resident of the other Contracting State are deductible, for the determination of the taxable profits of the company, under the same conditions as if they had been paid to a resident of the first State.
4. enterprises of a Contracting State, whose capital is wholly or in part, directly or indirectly owned or controlled by one or more residents of the other Contracting State, are subject in the first State to any taxation or obligation y, which is other or more heavy than those which are or may be subject other similar of the first State businesses.
5. no provision of this article shall be construed as preventing the Belgium: has) to impose the rate provided for by Belgian legislation the benefits of a Belgian permanent establishment of a company which is a resident of the Indonesia;
(b) to levy the withholding tax on dividends relating to participation related indeed to a permanent establishment available in Belgium to a company which is a resident of the Indonesia.
6. in this article, the term "taxation" means taxes which are the subject of this Convention.
Article 24 mutual agreement PROCEDURE 1. Where a person considers that the measures taken by a Contracting State or by the two Contracting States result or will result in taxation not in accordance with the provisions of this Convention for it, it may, irrespective of the remedies provided by the domestic law of those States, submit his case to the competent authority of the Contracting State of which it is a resident or, if his case falls under article 23 , paragraph 1, to that of the Contracting State in which it is a national. The case must be submitted within three years following the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.
2. the competent authority shall endeavour, if the query appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to avoidance of taxation not in accordance with the Convention.
3. the competent authorities of the Contracting States shall endeavour by mutual agreement, to resolve any difficulties or doubts arising as to which can lead the interpretation or application of the Convention.
4. the competent authorities of the Contracting States shall consult regarding the administrative measures necessary for the implementation of the provisions of the Convention and particularly with regard to the justifications to be provided by the residents of each Contracting State to benefit in the other State's exemptions or tax reductions provided for in this Convention.
5. the competent authorities of the Contracting States communicate directly between them for the purposes of the Convention.
Article 25 exchange of information 1. The competent authorities of the Contracting States shall exchange the information necessary to apply the provisions of this Convention or of the domestic legislation of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention, including to prevent fraud and evasion of such taxes. The exchange of information is not restricted by article 1.
Information received by a Contracting State are confidential in the same way that the information obtained in accordance with the internal law of that State and not be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the establishment or collection of the taxes covered by the Convention, procedures or proceedings in respect of those taxes , or by the decisions on appeals related to these taxes. These persons or authorities use this information for these purposes only. They can make this information public hearings State courts or in judgments.
2. the provisions of paragraph 1 shall not be interpreted as imposing a State Contracting obligation: has) to take administrative measures derogating from its legislation and its administrative practice or those of the other Contracting State;
(b) to provide information that could be obtained on the basis of its legislation or in the context of its normal administrative practice or those of the other Contracting State;
(c) to provide information that would reveal a commercial, industrial or professional secret or trade process, or information the disclosure of which would be contrary to public order.
Article 26 ASSISTANCE in recovery 1. Each of the Contracting States shall endeavour to recover on behalf of the other contracting any tax by that other State and the recovery state is necessary for the benefit of the exemption or reduction of tax rate granted by that other State under this Convention is not

obtained by individuals who are not entitled.
2. the provisions of this article may not be interpreted as imposing on the requested State an obligation to apply means of execution that are not permitted by the provisions of laws or regulations of any of the other Contracting State or to take measures which would be contrary to public order.
Article 27 LIMITATION of the effects of the CONVENTION 1. The provisions of this Convention shall not affect the fiscal privileges enjoyed by members of diplomatic missions or consular posts by virtue either of the General rules of the law of Nations, or the provisions of special agreements.
2. the Convention does not apply to international organizations, their bodies or their officials, or to persons who are members of a diplomatic mission or a consular post of a third State, when they are located on the territory of a Contracting State and not treated in one or the other State as of residents income tax on the income.
CHAPTER VI. -FINAL provisions Article 28 entry into force 1. This Convention will be approved by respective the Belgium and Indonesia in accordance with their legal procedures and it will enter into force on the fifteenth day following the date of the exchange notes announcing the approval.
(2. the Convention shall apply: a) the taxes due at source on assigned revenues or payment from 1 January of the year next following that of the entry into force of the Convention;
(b) to other taxes on income of taxable periods ending from 31 December of the year of the entry into force of the Convention.
3. the Convention between the Kingdom of Belgium and the Republic of Indonesia for the avoidance of double taxation and fiscal evasion with respect to taxes on income and on capital and the Protocol, signed in Brussels, on November 13, 1973, shall cease to apply to any tax established for a period for which this Convention has effect with respect to this tax , in accordance with paragraph 2 of this article.
Article 29 termination this Convention shall remain in force as long as it has not been denounced by a Contracting State; but each of the Contracting States may, on or before June 30 of any calendar year from the fifth year following that of the entry into force, the report, in writing and through diplomatic channels, to the other Contracting State.
En_cas_de denunciation before July 1 of such year, the Convention shall cease to apply: a) the taxes due at source on income attributed or put in payment no later than 31 December of the year of the denunciation;
(b) to other taxes based on revenues of taking taxable periods end before 31 December of the same year.
In witness whereof, the undersigned, being duly authorized by their respective Governments, have signed the present Convention and have thereto affixed their seals.
Made in Jakarta, September 16, 1997, in duplicate, in the English language.
FOR the Government of the Kingdom of Belgium: The Government of the Republic of Indonesia: Protocol at the moment of the signing of the Convention between the Kingdom of Belgium and the Republic of Indonesia for the avoidance of double taxation and to prevent fiscal evasion with respect to taxes on income, the undersigned have agreed to the following provisions which are an integral part of the Convention.
Ad article 7, paragraph 1: it is understood that profits derived by an enterprise of a Contracting State, in the other Contracting State, the sale of goods of identical or substantially similar to those which are sold through that permanent establishment situated in that other State, or other commercial activities of identical nature or similar to those that are exercised through hotel may be taxed in that other State, if the establishment has contributed in any way to the achievement of such sales or to the exercise of these activities.
In witness whereof, the undersigned duly authorized thereto by their respective Governments, have signed this Protocol and have thereto affixed their seals.
Made in Jakarta, September 16, 1997, in duplicate, in the English language.
FOR THE GOVERNMENT OF THE KINGDOM OF BELGIUM: THE GOVERNMENT OF THE REPUBLIC OF INDONESIA:

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