Direktorat Jenderal Pajak - Tax Knowledge Base

Tax Treaty

Indonesia - China ( China )

BerlakuEfektif:01Januari2004

AGREEMENT BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA
FOR
THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
Article 1
PERSONAL SCOPE
ThisAgreementshallapplytopersonswhoareresidentsofoneorbothoftheContractingStates.
Article 2
TAXES COVERED
1.

Agreement shallapplytotaxes onincomeimposed on behalf,ofa ContractingState orofitslocalauthorities, irrespectiveof the

mannerinwhichtheyarelevied.

2.

Thereshallberegardedastaxesonincomealltaxesimposedontotalincome,oronelementsofincome,includingtaxesongain,
fromthealienationofmovableorimmovableproperty.

3.

TheexistingtaxestowhichtheAgreementshallapplyare:
a.

inIndonesia:
the income tax imposed tinderthe incometax law of 1984(Undang-Undang PajakPenghasilan 1984,Law Number 7 of
1983asamended);
(hereinafterreferredtoas"Indonesiantax");

b.

inthePeople'sRepublicofChina:
i.

theindividualincometax,

ii.

theincometaxforenterpriseswithforeigninvestmentandforeignenterprises;

iii.

thelocalincometax;
(hereinafterreferredtoas"Chinesetax").

4.

ThisAgreementshallalsoapplytoanyidenticalorsubstantiallysimilartaxeswhichareimposedafterthedateofsignatureofthe
Agreementinadditionto,orinplaceof,theexistingtaxesreferredtoinparagraph3.ThecompetentauthoritiesoftheContracting
States shall notify each other of any substantial changes which have been made in their respective taxation laws within a

reasonableperiodoftimeaftersuchchanges.
Article 3
GENERAL DEFINITIONS
1.

ForthepurposesofthisAgreement,unlessthecontextotherwiserequires:
a.
i. the term "Indonesia" comprises the territory of the Republic of Indonesia as defined in its laws and the adjacent
areas over which the Republic of Indonesia has sovereignty, sovereign rights or jurisdiction in accordance with
internationallaw;
ii.

theterm"China" comprisestheterritoryofthe People'sRepublicofChinaasdefinedinitslaws andtheadjacent

areasoverwhichthePeoplesRepublicofChinahassovereignty,sovereignrightsorjurisdictioninaccordancewith

internationallaw;
theterms"aContractingState"and"theotherContractingState"meanIndonesiaorChinaasthecontextrequires;
theterm"tax"meansIndonesiantaxorChinesetax,asthecontextrequires;
theterm"person"includesanindividual,acompanyandanyotherbodyofpersons;
theterm"company"meansanybodycorporateoranyentitywhichistreatedasabodycorporateforthetaxpurposes;
theterms"enterpriseofaContractingState"and"enterpriseoftheotherContractingState"mean,respectively,anenterprise
carriedonbyaresidentofaContractingStateandanenterprisecarriedonbyaresidentoftheotherContractingState;
the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State,
exceptwhentheshiporaircraftisoperatedsolelybetweenplacesintheotherContractingState;
theterm"nationals"means:
i. anyindividualspossessingthenationalityofaContractingState,

b.
c.
d.
e.
f.
g.
h.

ii.

anylegalperson,partnershipandassociationderivingitsstatusassuchfromthelawsinforceinaContracting

State;
theterm"competentauthority"means:
i. inIndonesia:

i.

theMinisterofFinanceorhisauthorizedrepresentatives;
ii.

inChina:
theStateAdministrationofTaxationoritsauthorizedrepresentatives.

2.

AsregardstheapplicationofthisAgreementbyaContractingState,anytermnotdefinedthereinshall,unlessthecontextotherwise
requires, have the meaning which it has under the laws of that Contracting State concerning the taxes to which this 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
Contracting State, isliable to tax therein by reason of his domicile, residence, place ofmanagement, place ofheadofficeor any
othercriterionofasimilarnature.

2.

Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be
determinedasfollows:
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
permanenthomeavailabletohiminbothStates,heshallbedeemedtobearesidentoftheStatewithwhichhispersonal
andeconomicrelationsarecloser(centreofvitalinterests);

b.

iftheStateinwhichhehashiscentreofvitalinterestscannotbedetermined,orifhehasnotapermanenthomeavailable

tohimineitherState,heshallbedeemedtobearesidentoftheStateinwhichhehasanhabitualabode;
c.

ifhehasanhabitualabodeinbothStatesorinneitherofthem,thecompetentauthoritiesoftheContractingStatesshall
settlethequestionbymutualagreement.

3.

Where by reason of the provisions of paragraph1 a person other thanan individual isa resident of both Contracting States, the
competentauthoritiesoftheStatesshallsettlethequestionbymutualagreement.
Article 5
PERMANENT ESTABLISHMENT

1.

For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through which the
businessofanenterpriseiswhollyorpartlycarriedon.

2.

Theterm"permanentestablishment"includesespecially:
a.

aplaceofmanagement,

b.

abranch;

c.

anoffice;

d.

afactory;

e.

aworkshop;

f.

awarehouseinrelationtoapersonprovidingstoragefacilitiesforothers;

g.

premisesusedassalesoutlet,

h.

afarmorplantation;

i.
3.

amine,anoilorgaswell,aquarryoranyotherplaceofextractionofnaturalresources.

Theterm"permanentestablishment"likewiseencompasses:
a.

a building site, a construction, assembly or installation project or supervisory activities in connection therewith, but only
wheresuchsite,projectoractivitiescontinueinaContractingStateforaperiodofmorethansixmonths;

b.

thefurnishingofservices,includingconsultancyservices,byanenterprisethroughemployeesorotherpersonnelengaged
bytheenterpriseforsuchpurpose,butonlywhereactivitiesofthatnaturecontinue(forthesameoraconnectedproject)
withinthecountryforaperiodorperiodsaggregatingmorethansixmonthswithinanytwelve-monthperiod;

c.

[a]drillingrigorworking shipusedforexplorationorexploitationofnaturalresourceswhichexistsorcontinuesformore
thansixmonths.

4.

NotwithstandingtheprecedingprovisionsofthisArticle,theterm"permanentestablishment"shallbedeemednottoinclude:

a.

theuseoffacilitiessolelyforthepurposeofstorageordisplayofgoodsormerchandisebelongingtotheenterprise;

b.

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

c.

themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthepurposeofprocessingby
anotherenterprise;

d.

themaintenanceofafixedplaceofbusinesssolelyforthepurposeofpurchasinggoodsormerchandiseorofcollecting
information,fortheenterprise;

e.
f.

themaintenanceofafixedplaceofbusinesssolelyforthepurposeofadvertising,orforthesupplyofinformation;
themaintenanceofafixedplaceofbusinesssolelyforthepurposeofcarryingon,fortheenterprise,anyotheractivityof
preparatoryorauxiliarycharacter;

g.

themaintenanceofafixedplaceofbusinesssolelyforanycombinationofactivitiesmentionedinsubparagraphs(a)to(e),
provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or
auxiliarycharacter.

5.

Notwithstanding the provisions of paragraphs 1 and 2, where a person -- other than an agent of an independent status to whom
paragraph7applies--isactinginaContractingStateonbehalfofanenterpriseoftheotherContractingState,thatenterpriseshall
bedeemedtohaveapermanentestablishmentinthefirst-mentionedContractingStateinrespectofanyactivitieswhichthatperson
undertakesfortheenterprise,ifsuchaperson:
a.

has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the
activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of
business,wouldnotmakethisfixedplaceofbusinessapermanentestablishmentundertheprovisionsofthatparagraph;

b.

hasnosuchauthority,buthabituallymaintainsinthefirst-mentionedStateastockofgoodsormerchandisefromwhichhe
regularlydeliversgoodsormerchandiseonbehalfoftheenterprise.

6.

An insurance enterprise of a Contracting State shall, except with regard to reinsurance, be deemed to have a permanent
establishmentintheother ContractingState ifitcollectspremiumsinthatother Stateorinsuresriskssituatedthereinthrough an
employeeorthrougharepresentativewhoisnotanagentofanindependentstatuswithinthemeaningofparagraph7.

7.

AnenterpriseofaContractingStateshallnotbedeemedtohaveapermanentestablishmentintheotherContractingStatemerely
becauseitcarriesonbusinessinthatotherStatethroughabroker,generalcommissionagentoranyotheragentofanindependent
status,providedthatsuchpersonsareactingintheordinarycourseoftheirbusiness.However,whentheactivitiesofsuchanagent
aredevotedwhollyoralmostwhollyonbehalfofthatenterprise,hewillnotbeconsideredanagentofanindependentstatuswithin
themeaningofthisparagraph.

8.

ThefactthatacompanywhichisaresidentofaContractingStatecontrolsoriscontrolledbyacompanywhichisaresidentofthe
other Contracting State, or which carries can business in that other State (whether through a permanent establishment or
otherwise),shallnotofitselfconstituteeithercompanyapermanentestablishmentoftheother.

Article 6
INCOME FROM IMMOVABLE PROPERTY
1.

IncomederivedbyaresidentofaContractingStatefromimmovableproperty(includingincomefromagricultureorforestry)situated
intheotherContractingStatemaybetaxedinthatotherState.

2.

Theterm"immovableproperty"shallhavethemeaningwhichithasunderthelawoftheContractingStateinwhichthepropertyin
questionissituated.Thetermshallinanycaseincludepropertyaccessorytoimmovableproperty,livestockandequipmentusedin
agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable
propertyandrightstovariableorfixedpaymentsasconsiderationfortheworkingof,ortherighttowork,mineraldeposits,sources
andothernaturalresources.Shipsandaircraftshallnotberegardedasimmovableproperty.

3.

Theprovisionsofparagraphlshallalsoapplytoincomederivedfromthedirectuse,letting,oruseinanyotherformofimmovable
property.

4.

Theprovisionsofparagraphs1and3shallalsoapplytotheincomefromimmovablepropertyofanenterpriseandtoincomefrom
immovablepropertyusedfortheperformanceofindependentpersonalservices.
Article 7
BUSINESS PROFITS

1.

The profitsof an enterprise of aContracting Stateshallbetaxable onlyin that ContractingState unlesstheenterprisecarries on

businessintheotherContractingStatethroughapermanentestablishmentsituatedtherein.Iftheenterprisecarriesonbusinessas
aforesaid, the profits of the enterprise may be taxed in the other Contracting State but only so much of them as is directly or
indirectlyattributable to thatpermanentestablishment.Theprovisionsofthisparagraphshall,however,notapply ifthe enterprise
proves that the above activities are not undertaken by the permanent establishment or have no relation with the permanent
establishment.

2.

Subjecttotheprovisionsofparagraph3,whereanenterprise ofaContractingState carriesonbusinessintheotherContracting

State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent
establishmentthe profitswhichitmightbeexpectedto makeifitwereadistinctand separateenterpriseengagedin thesame or
similaractivitiesunderthesameorsimilarconditionsanddealingwhollyindependentlywiththeenterpriseofwhichitisapermanent
establishment.

3.

Indeterminingtheprofitsofapermanentestablishment,thereshallbeallowedasdeductionsexpenseswhichareincurredforthe
purposes of the business of the permanent establishment including executive and general administrative expenses so incurred,
whetherintheStateinwhichthepermanentestablishmentissituatedorelsewhere.

4.

InsofarasithasbeencustomaryinaContractingStatetodeterminetheprofitstobeattributedtoapermanentestablishmentonthe
basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that
Contracting State from determining the profits to be taxed by such an apportionment as may be customary. The method of
apportionmentadoptedshall,however,besuchthattheresultshallbeinaccordancewiththeprinciplescontainedinthisArticle.

5.

No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of
goodsormerchandisefortheenterprise.

6.

Forthepurposesofparagraphs1to5,theprofitstobeattributedtothepermanentestablishmentshallbedeterminedbythesame
methodyearbyyearunlessthereisgoodandsufficientreasontothecontrary.

7.

Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of
thoseArticlesshallnotbeaffectedbytheprovisionsofthisArticle.
Article 8
SHIPPING AND AIR TRANSPORT

1.

ProfitsfromsourceswithinaContractingStatederivedbyanenterpriseoftheotherContractingStatefromtheoperationofshipsin
internationaltrafficmaybetaxedinthefirst-mentionedState,butthetaximposedshallbereducedbyanamountequalto50per
centthereof.

2.

Profits from the operation of aircraft in international traffic shall be taxable only in the Contracting State of which the enterprise
operatingtheaircraftisaresident.

3.

Theprovisionsofparagraphs1and2shallalsoapplytoprofitsfromtheparticipationinapool,ajointbusinessoraninternational
operatingagency.
Article 9
ASSOCIATED ENTERPRISES

1.

Where:
a.

anenterpriseofaContractingStateparticipatesdirectlyorindirectlyinthemanagement,controlorcapitalofanenterprise
oftheotherContractingState,or

b.

thesamepersonsparticipatedirectlyorindirectlyinthemanagement,controlorcapitalofanenterpriseofaContracting
StateandanenterpriseoftheotherContractingState,

andineithercaseconditionsaremadeorimposedbetweenthetwoenterprisesintheircommercialorfinancialrelationswhichdiffer
from those which would be made between independent enterprises, then any profits which would, but for those conditions, have
accruedtooneoftheenterprises, but, by reasonofthose conditions, havenotsoaccrued,maybeincludedintheprofits of that
enterpriseandtaxedaccordingly.
2.

Where a Contracting State includes in the profits of an enterprise of that Contracting State -- and taxes accordingly -- profits on
which an enterprise of the other Contracting State has been charged to tax in that other Contracting State, and the profits so
included are profits which would have accrued to the enterprise of the first-mentioned Contracting State if the conditions made
betweenthetwoenterpriseshadbeenthosewhichwouldhavebeenmadebetweenindependententerprises,thenthatotherState
shallmakeanappropriateadjustmenttotheamountofthetaxchargedthereinonthoseprofits.Indeterminingsuchadjustment,due
regard shall be had to the other provisions of the Agreement and the competent authorities of the Contracting States shall, if
necessary,consulteachother.

3.

AContractingStateshallnotchangetheprofitsofanenterpriseinthecircumstancesreferredtoinparagraph2aftertheexpiryof
thetimelimitsprovidedinitstaxlaws.
Article 10
DIVIDENDS

1.

DividendspaidbyacompanywhichisaresidentofaContractingStatetoaresidentoftheotherContractingStatemaybetaxedin
thatotherContractingState.

2.

However,suchdividendsmayalsobetaxedintheContractingStateofwhichthecompanypayingthedividendsisaresidentand
accordingtothelawsofthatContractingState,butiftherecipientisthebeneficialownerofthedividendsthetaxsochargedshall
not exceed10percent of thegrossamountofthedividends. Theprovisionsofthisparagraph shallnotaffect the taxation of the
companyinrespectoftheprofitsoutofwhichthedividendsarepaid.

3.

Theterm"dividends"asusedinthisArticlemeansincomefromsharesorotherrights,notbeingdebt-claims,participatinginprofits,
aswellasincomefromothercorporaterightswhichissubjectedtothesametaxationtreatmentasincomefromsharesbythelaws
oftheStateofwhichthecompanymakingthedistributionisaresident.

4.

Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialownerofthedividends,beingaresidentofaContractingState,
carriesonbusiness intheother ContractingStateofwhichthecompanypayingthe dividendsisaresident,throughapermanent
establishmentsituatedtherein,orperformsinthatotherStateindependentpersonalservicesfromafixedbasesituatedtherein,and
theholdinginrespectofwhichthedividendsarepaidiseffectivelyconnectedwithsuchpermanentestablishmentorfixedbase.In
suchcasetheprovisionsofArticle7orArticle14,asthecasemaybe,shallapply.

5.

Notwithstanding any other provisions of this Agreement where a company which is a resident of a Contracting State has a
permanent establishment in the other Contracting State, the profits of the permanent establishment may be subjected to an
additional tax in that otherState in accordancewithitslaw, but theadditionaltaxsochargedshallnot exceed10percent of the
amountofsuchprofitsafterdeductingtherefromincometaximposedthereoninthatotherState.

6.

WhereacompanywhichisaresidentofaContractingStatederivesprofitsorincomefromtheotherContractingState,thatother
ContractingStatemay notimpose anytaxonthedividendspaid bythecompany,exceptinsofar as suchdividendsare paidtoa
residentofthatotherContractingStateorinsofarastheholdinginrespectofwhichthedividendsarepaidiseffectivelyconnected
with a permanent establishment or a fixed base situated in that other Contracting State, nor subject the company's undistributed
profitstoataxonthecompany'sundistributedprofits,evenifthedividendspaidortheundistributedprofitsconsistwhollyorpartlyof
profitsorincomearisinginsuchotherContractingState.
Article 11
INTEREST

1.

InterestarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemaybetaxedinthatotherContracting
State.

2.

The rate of tax imposed by one of [the] Contracting States on interest derived from sources within that Contracting State and
beneficiallyownedby[a]residentoftheotherContractingStateshallnotexceed10percentofthegrossamountoftheinterest.

3.

Notwithstandingtheprovisionsofparagraph2,interestarisinginaContractingStateandderivedbytheotherContractingState,a
political subdivision or a local authority thereof, the Central Bank or any financial institution controlled by that Government, the
capital of which is wholly owned by the Government of the other Contracting State, as may be agreed upon from time to time
betweenthecompetentauthoritiesoftheContractingStates,shallbeexemptfromtaxinthefirst-mentionedState.

4.

Theterm"interest"asusedinthisArticlemeansincomefromdebt-claimsofeverykind,whetherornotsecuredbymortgage,and
whetherornotcarryingarighttoparticipateinthedebtor'sprofits,andinparticular,incomefromgovernmentsecuritiesandincome

from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, as well as income
assimilatedtoincomefrommoneylentunderthetaxationlawoftheStatesinwhichtheincomearises,includinginterestondeferred
paymentsales.PenaltychargesforlatepaymentshallnotberegardedasinterestforthepurposeofthisArticle.
5.

Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialowneroftheinterest,beingaresidentofaContractingState,
carriesonbusinessintheotherContractingStateinwhichtheinterestarises,throughapermanentestablishmentsituatedtherein,
orperformsinthatotherContractingStateindependentpersonalservicesfromafixedbasesituatedtherein,andthedebt-claimin
respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the
provisionsofArticle7orArticle14,asthecasemaybe,shallapply.

6.

Interest shall be deemed to arise in aContracting State when the payer is that Stateitself, a local authority or aresident of that
State.Where,however,thepersonpayingtheinterest,whetherheisaresidentofaContractingStateornot,hasinaContracting
State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was
incurred,andsuchinterestisbornebysuchpermanentestablishmentorfixedbase,thensuchinterestshallbedeemedtoarisein
theStateinwhichthepermanentestablishmentorfixedbaseissituated.

7.

Where,byreason of a specialrelationship between the payerandthebeneficial ownerorbetweenbothofthem and someother

person,theamountoftheinterest,havingregardtothedebt-claimforwhichitispaid,exceedstheamountwhichwouldhavebeen
agreeduponbythepayerandthebeneficialownerintheabsenceofsuchrelationship,theprovisionsofthisArticleshallapplyonly
to the last-mentionedamount. In such case, the excess part of the paymentsshall remain taxable according to the lawsof each
ContractingState,dueregardbeinghadtotheotherprovisionsofthisAgreement.
Article 12
ROYALTIES

1.

RoyaltiesarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemaybetaxedinthatotherContracting
State.

2.

TherateoftaximposedbyoneofContractingStatesonroyaltiesderivedfromsourceswithinthatContractingStateandbeneficially
ownedby[a]residentoftheotherContractingStateshallnotexceed10percentofthegrossamountoftheroyalties.

3.

The term "royalties" as used in this Article means payments, whether periodical or not, and in whatever form or name or
nomenclaturetotheextenttowhichtheyaremadeasconsiderationfor:
a.

theuseof,ortherighttouse,anycopyright,patent,designormodel,plan,secretformulaorprocess,trademarkorother
likepropertyorright;or

b.

theuseof,ortherighttouse,anyindustrial,commercialorscientificequipment;or

c.

thesupplyofscientific,technical,industrialorcommercialknowledgeorinformation;or

d.

thesupplyofanyassistancethatisancillaryandsubsidiaryorenjoymentof,anysuchpropertyorrightasismentionedin
subparagraph(a),anysuchequipmentasismentionedinsub-paragraph(b)oranysuchknowledgeorinformationasis
mentionedinsubparagraph(c);or

e.

theuseof,ortherighttouse:

f.
4.

i.

motionpicturefilms;or

ii.

filmsorvideoforuseinconnectionwithtelevision,or

iii.

tapesforuseinconnectionwithradiobroadcasting,or

totalorpartialforbearanceinrespectoftheuseorsupplyofanypropertyorrightreferredtointhisparagraph.

Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialowneroftheroyalties,beingaresidentofaContractingState,
carriesonbusinessintheotherContractingStateinwhichtheroyaltiesarise,throughapermanentestablishmentsituatedtherein,
or performs in that other Contracting State independent personal services from a fixed base situated therein, and the right or
propertyinrespectofwhichtheroyaltiesarepaidiseffectivelyconnectedwithsuchpermanentestablishmentorfixedbase.Insuch
case,theprovisionsofArticle7orArticle14,asthecasemaybe,shallapply.

5.

RoyaltiesshallbedeemedtoariseinaContractingStatewhenthepayeristhatStateitself,alocalauthoritythereoforaresidentof
that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a
ContractingStateapermanentestablishmentorafixedbaseinconnectionwithwhichtheliabilitytopaytheroyaltieswasincurred,
and suchroyaltiesare bornebysuchpermanentestablishmentor fixedbase,thensuchroyaltiesshallbe deemedtoarisein the
Stateinwhichthepermanentestablishmentorfixedbaseissituated.

6.

Where,byreason of a specialrelationship between the payerandthebeneficial ownerorbetweenbothofthem and someother

person,theamountoftheroyalties,havingregardtotheuse,rightorinformationforwhichtheyarepaid,exceedstheamountwhich
would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this
Articleshallapplyonlytothelast-mentionedamount.Insuchcase,theexcesspartofthepaymentshallremaintaxableaccordingto
thelawsofeachContractingState,dueregardbeinghadtotheotherprovisionsofthisAgreement.
Article 13
CAPITAL GAINS

1.

GainsderivedbyaresidentofaContractingStatefromthealienationofimmovablepropertyreferredtoinArticle6andsituatedin
theotherContractingStatemaybetaxedinthatotherState.

2.

Gains from the alienation of movable property forming part of the business property of a permanent establishment which an
enterpriseofaContractingStatehasintheotherContractingStateorofmovablepropertypertainingtoafixedbaseavailabletoa
residentofaContractingStateintheotherContractingStateforthepurposeofperformingindependentpersonalservices,including
suchgainsfromthealienationofsuchapermanentestablishment(aloneorwiththewholeenterprise)orofsuchafixedbase,may
betaxedinthatotherState.

3.

GainsderivedbyaresidentofaContractingStatefromthealienationofshipsoraircraftoperatedininternationaltrafficormovable
propertypertainingtotheoperationofsuchshipsoraircraftshallbetaxableonlyinthatState.

4.

Gainsfromthealienationofsharesofthecapitalstockofacompanythepropertyofwhichconsistsdirectlyorindirectlyprincipallyof
immovablepropertysituatedinaContractingStatemaybetaxedinthatContractingState.

5.

Gains from the alienation of any property other than that referred to in the preceding paragraphs shall be taxable only in the
ContractingStateofwhichthealienatorisaresident.

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
charactershallbetaxableonlyinthatContractingStateexceptinoneofthefollowingcircumstances,whensuchincomemayalso
betaxedintheotherContractingState:
a.

ifhehasafixedbaseregularlyavailabletohimintheotherContractingStateforthepurposeofperforminghisactivities;in
thatcase,onlysomuchoftheincomeasisattributabletothatfixedbasemaybetaxedinthatotherContractingState;or

b.

if he is present in that other Contracting State for a period or periods exceeding in the aggregate 183 days within any
twelve month period; in that case, only so much of the income as is derived from his activities performed in that other
ContractingStateduringtheaforesaidperiodorperiodsmaybetaxedinthatotherContractingState.

2.

Theterm"professionalservices"includesespeciallyindependentscientific,literary,artistic,educationalorteachingactivitiesaswell
astheindependentactivitiesofphysicians,engineers,lawyers,dentists,architectsandaccountants.
Article 15
DEPENDENT PERSONAL SERVICES

1.

SubjecttotheprovisionsofArticles16,18,19,20and21,salaries,wagesandothersimilarremunerationderivedbyaresidentofa
ContractingStateinrespectofanemploymentshallbetaxableonlyinthatContractingStateunlesstheemploymentisexercisedin
theotherContractingState.Iftheemploymentissoexercised,suchremunerationasisderivedtherefrommaybetaxedinthatother
ContractingState.

2.

Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an
employmentexercisedintheotherContractingStateshallbetaxableonlyinthefirst-mentionedStateif:
a.

the recipient is present in that other Contracting State for a period or periods not exceeding in the aggregate 183 days
withinanytwelvemonthperiod;and

b.

theremunerationispaidby,oronbehalfof,anemployerwhoisnotaresidentoftheotherContractingState;and

c.

the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other
ContractingState.

3.

NotwithstandingtheprecedingprovisionsofthisArticle,remunerationderivedinrespectofanemploymentexercisedaboardaship
oraircraftoperatedininternationaltrafficbyanenterpriseofaContractingStateshallbetaxableonlyinthatState.
Article 16
DIRECTORS' FEES

Directors'feesandothersimilarpaymentsderivedbyaresidentofaContractingStateinhiscapacityasamemberoftheboardofdirectors
oranyothersimilarorganofacompanywhichisaresidentoftheotherContractingStatemaybetaxedinthatotherContractingState.
Article 17
ARTISTES AND ATHLETES

1.

NotwithstandingtheprovisionsofArticles14and15,incomederivedbyaresidentofaContractingStateasanentertainer,suchas
atheatre,motionpicture,radioortelevisionartiste,oramusician,orasanathlete,fromhispersonalactivitiesassuchexercisedin
theotherContractingState,maybetaxedinthatotherContractingState.

2.

Whereincomeinrespectofpersonalactivitiesexercisedbyanentertaineroranathleteinhiscapacityassuchaccruesnottothe
entertainer orathlete himselfbut to anotherperson, that income may,notwithstanding the provisions ofArticles 7, 14and15, be
taxedintheContractingStateinwhichtheactivitiesoftheentertainerorathleteareexercised.

3.

Notwithstandingtheprovisionsofparagraphs1and2,incomederivedbyentertainersorathleteswhoareresidentsofaContracting
State from the activities exercised in the other Contracting Stateunder a plan of cultural exchange between the Governmentsof
bothContractingStatesshallbeexemptfromtaxinthatotherContractingState.
Article 18
PENSIONS

1.

Subjecttotheprovisionsofparagraph2ofArticle19,pensionsandothersimilarremunerationpaidtoaresidentofaContracting
StateinconsiderationofpastemploymentshallbetaxedonlyinthatState.

2.

Notwithstandingtheprovisionsofparagraph1,andsubjecttotheprovisionsofparagraph2ofArticle19,pensionspaidandother
similarpaymentsmadeunderapublicwelfareschemeofthesocialsecuritysystemoraspecialfundofaContractingState,orof
theGovernmentoralocalauthoritythereofinaccordancewiththelawofthatStateshallbetaxableonlyinthatState.
Article 19
GOVERNMENT SERVICE

1.

a.

Remuneration,otherthanpension,paidbytheGovernmentofaContractingStateoralocalauthoritythereoftoanindividual
inrespectofservicesrenderedtothatGovernmentorthatauthorityshallbetaxableonlyinthatState.

b.

However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other
ContractingStateandtheindividualisaresidentofthatotherStatewho:

2.

a.

i.

isanationalofthatotherState;or

ii.

didnotbecomearesidentofthatotherStatesolelyforthepurposeofrenderingthesercives.

Any pension paid by,or outof fundstowhich contributionsaremade by the GovernmentofaContractingState or a local
authoritythereoftoanindividualinrespectofservicesrenderedtotheGovernmentorthatauthorityshallbetaxableonlyin
thatState.

b.
3.

However,suchpensionshallbetaxableonlyintheotherContractingStateiftheindividualisaresidentof,andanationalof,

thatotherContractingState.
The provisionsofArticles15,16,17and18shallapply toremunerationandpensionsinrespectofservicesrenderedinconnection
withabusinesscarriedonbytheGovernmentofaContractingStateoralocalauthoritythereof.
Article 20
TEACHERS AND RESEARCHERS

AnindividualwhovisitsaContractingStateattheinvitationofthatStateorofauniversity,college,school,museumorotherculturalinstitution
ofthatStateorunderanofficialprogramofculturalexchangeforaperiodnotexceedingtwoyearssolelyforthepurposeofteaching,giving
lecturesorcarryingoutresearchatsuchinstitutionandwhois,orwasimmediatelybeforethatvisit,aresidentoftheotherContractingState
shallbeexemptfromtaxinthefirst-mentionedStateonhisremunerationforsuchactivity.
Article 21

STUDENTS AND TRAINEES

1.

Paymentswhichastudent,apprenticeorbusinesstraineewhoisorwasimmediatelybeforevisitingaContractingState,aresident
of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training,
receives for the purpose of his maintenance, education or training, shall not be taxed in that first-mentioned State, provided that
suchpaymentsaremadetohimfromsourcesoutsidethatState.

2.

Inrespectofgrants,scholarshipsandremunerationnotcoveredbyparagraph1,astudentortraineedescribedinparagraph1shall,
in addition, be entitled during his or her education or training to the same exemptions, reliefs or reductions in respect of taxes
availabletoresidentsoftheContractingStatewhichheorsheisvisiting.
Article 22
OTHER INCOME

1.

ItemsofincomeofaresidentofaContractingState,whereverarising,notdealtwithintheforegoingArticlesofthisAgreementshall
betaxableonlyinthatContractingState.However,itemsofincomearisingintheotherContractingStatemayalsobetaxedinthat
otherContractingState.

2.

Theprovisionsofparagraph1shallnotapplytoincome,otherthanincomefromimmovablepropertyasdefinedinparagraph2of
Article6,iftherecipientofsuchincome,beingaresidentofaContractingState,carriesonbusinessintheotherContractingState
throughapermanentestablishmentsituatedtherein,orperformsinthatotherContractingStateindependentpersonalservicefroma
fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such
permanentestablishmentorfixedbase.InsuchcasetheprovisionsofArticle7orArticle14,asthecasemaybe,shallapply.
Article 23
METHODS FOR ELIMINATION OF DOUBLE TAXATION

1.

InIndonesia,doubletaxationshallbeeliminatedasfollows:
WherearesidentofIndonesiaderivesincomefromChina,theamountoftaxonthatincomepayableinChinainaccordancewiththe
provisionsofthisAgreement,maybecreditedagainstthetaxleviedinIndonesiaimposedonthatresident.Theamountofcredit,
however,shall not exceed the amount of the tax in Indonesia onthat incomecomputed in accordancewith its taxation laws and
regulations.

2.

InChina,doubletaxationshallbeeliminatedasfollows:
a.

Where a resident of China derives income from Indonesia the amount of tax on that income payable in Indonesia in
accordancewiththeprovisionsofthisAgreement,maybecreditedagainsttheChinesetaximposedonthatresident.The
amountofthe credit,however,shall not exceed the amount of the Chinese tax on thatincomecomputedinaccordance
withthetaxationlawsandregulationsofChina.

b.

WheretheincomederivedfromIndonesiaisadividendpaidbyacompanywhichisaresidentofIndonesiatoacompany
whichisaresidentofChinaandwhichownsnotlessthan10percentofthesharesofthecompanypayingthedividend,
thecreditshalltakeintoaccountthetaxpaidtoIndonesiabythecompanypayingthedividendinrespectofitsincome.
Article 24
NON-DISCRIMINATION

1.

NationalsofaContractingStateshallnotbesubjectedintheotherContractingStatetoanytaxationoranyrequirementconnected
therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other
ContractingStateinthesamecircumstancesareormaybesubjected.Theprovisionsofthisparagraphshall,notwithstandingthe
provisionsofArticle1,alsoapplytopersonswhoarenotresidentsofoneorbothoftheContractingStates.

2.

ThetaxationonapermanentestablishmentwhichanenterpriseofaContractingStatehasintheotherContractingStateshallnot
be less favorably levied in that other Contracting State than the taxation levied on enterprises of that other Contracting State
carryingonthesame activities.Theprovisionofthisparagraphshall notbeconstruedasobliging a ContractingState tograntto
residentsof the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil
statusorfamilyresponsibilitieswhichitgrantstoitsownresidents.

3.

ExceptwheretheprovisionsofArticle9,paragraph7ofArticle11,orparagraph6ofArticle12,apply,interest,royaltiesandother
disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of
determiningthetaxableprofitsofsuchenterprise,bedeductibleunderthesameconditionsasiftheyhadbeenpaidtoaresidentof
thefirst-mentionedState.

4.

EnterprisesofaContractingState,thecapitalofwhichiswhollyorpartlyownedorcontrolled,directlyorindirectly,byoneormore
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
enterprisesofthefirst-mentionedStateareormaybesubjected.

5.

InthisArticletheterm"taxation"meanstaxeswhicharethesubjectofthisAgreement.
Article 25
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,presenthis casetothecompetentauthorityoftheContractingStateofwhichheisaresident or,ifhiscasecomesunder
paragraph1ofArticle24,tothatoftheContractingStateofwhichheisanational.Thecasemustbepresentedwithinthreeyears
fromthefirstnotificationoftheactionresultingintaxationnotinaccordancewiththeprovisionsoftheAgreement.

2.

Thecompetentauthorityshallendeavor,iftheobjectionappearstoittobejustifiedandifitisnotitselfabletoarriveatasatisfactory
solution,to resolve the case bymutual agreement withthe competent authority of theother Contracting State,witha viewto the
avoidanceoftaxationwhichisnotinaccordancewiththisAgreement.

3.

ThecompetentauthoritiesoftheContractingStatesshallendeavortoresolvebymutualagreementanydifficultiesordoubtsarising
as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in
casesnotprovidedforinthisAgreement.

4.

The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an
agreement in the sense of the paragraphs 2 and 3. When it seems advisable for reaching agreement, representatives of the
competentauthoritiesoftheContractingStatesmaymeettogetherforanoralexchangeofopinions.
Article 26
EXCHANGE OF INFORMATION

1.

ThecompetentauthoritiesoftheContractingStatesshallexchangesuchinformationasisnecessaryforcarryingouttheprovisions
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 this Agreement, in particular for the prevention of 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 and shall be
disclosedonlytopersonsorauthorities(includingcourtsandadministrativebodies)involvedintheassessmentorcollectionof,the
enforcementorprosecutioninrespectof,orthedeterminationofappealsinrelationto,thetaxescoveredbytheAgreement.Such
persons or authorities shall use the information only for such purposes. They may disclose the information in public court
proceedingsorinjudicialdecisions.

2.

Innocaseshalltheprovisionsofparagraph1beconstruedsoastoimposeonaContractingStatetheobligation:
a.

tocarryoutadministrativemeasuresatvariancewiththelawsandadministrativepracticeofthatoroftheotherContracting
State;

b.

tosupplyinformationwhichisnotobtainableunderthelawsorinthenormalcourseoftheadministrationofthatorofthe
otherContractingState;

c.

to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade
process,orinformation,thedisclosureofwhichwouldbecontrarytopublicpolicy(ordrepublic).
Article 27
DIPLOMATIC AGENTS AND CONSULAR OFFICERS

NothinginthisAgreementshallaffectthefiscalprivilegesofdiplomaticagentsorconsularofficersunderthegeneralrulesofinternationallaw
orundertheprovisionsofspecialagreements.
Article 28
ENTRY INTO FORCE
1.

ThisAgreementshallenterintoforceonthelaterofthedateonwhichtherespectiveGovernmentsmaynotifyeachotherinwriting
thattheformalitiesconstitutionallyrequiredintheirrespectiveStateshavebeencompliedwith.

2.

ThisAgreementshallhaveeffect:
i.

inrespectoftaxwithheldatsourcetoincomederivedonorafter1stofJanuaryintheyearnextfollowingthatinwhichthe
Agreemententersintoforce;and

ii.

inrespectofothertaxesonincome,fortaxableyearsbeginningonorafter1stofJanuaryintheyearnextfollowingthatin
whichtheAgreemententersintoforce.
Article 29
TERMINATION

This Agreement shall continue in effect indefinitely but either of the Contracting States may, on or before the thirtieth day of June in any
calendaryearbeginningaftertheexpirationofaperiodoffiveyearsfromthedateofitsentryintoforce,givewrittennoticeofterminationto
the other Contracting State through the diplomatic channels. In such event this Agreement shall cease to have effect as respects income
derivedduringthetaxableyearsbeginningonorafterthefirstdayofJanuaryinthecalendaryearnextfollowingthatinwhichthenoticeof
terminationisgiven.

Insuchcase,theAgreementshallceasetohaveeffect:
a.

inrespectofincometaxwithheldatsourcetoincomederivedonorafter1stofJanuaryintheyearnextfollowingthatinwhichthe
noticeofterminationisgiven;

b.

inrespectofothertaxesonincome,fortaxableyearsbeginningonorafter1stofJanuaryintheyearnextfollowingthatinwhichthe
noticeofterminationisgiven.

INWITNESSWHEREOFtheundersigned,dulyauthorizedtheretobytheirrespectiveGovernments,havesignedthisAgreement.
Done at Jakarta onthe7thday ofNovember,2001,induplicateintheChinese, IndonesianandEnglishlanguages,alltexts beingequally
authentic.Incaseofanydivergenceofinterpretation,theEnglishtextshallprevail.

FortheGovernmentof
FortheGovernmentof
theRepublicofIndonesia
thePeople'sRepublicofChina
10February2014-09:06