Double Taxation Agreement between Luxembourg and Indonesia (2023)

AGREEMENT

BETWEEN THE GRAND DUKE OF LUXEMBOURG AND THE REPUBLIC OF INDONESIA ON THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF TAX MISTAKES IN RESPECT TO INCOME TAX AND WEALTH TAX

The Government of the Grand Duchy of Luxembourg and the Government of the Republic of Indonesia

DESIRING to conclude an Agreement for the avoidance of double taxation and the prevention of tax evasion with respect to taxes on income and on capital,

THEY HAVE AGREED AS FOLLOWS

article 1

PERSONAL SCOPE

This Agreement applies to persons who are residents of one or both of the Contracting PartiesLand.

Article 2

POREZI POKRIVENI

1. This Convention applies to taxes on income and capital levied for: aContracting State or its local authorities, however collected.

2. Income taxes and property taxes are considered to be all taxes imposed togetherincome, on total wealth or on part of income or capital, including taxes on gains from the alienation of movable or immovable property.

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

(a) in Indonesia:

income tax levied under the Income Tax Act 1984(Act No. 7 of 1983);

(hereinafter "Indonesian tax");

(b) in the Grand Duchy of Luxembourg:

(i) personal income tax;

(ii) income tax;

(iii) directors' fees tax (special directors' fees tax);

(iv) porez na kapital;

(v) municipal business tax;

(hereinafter "Luxembourg tax").

4. The Agreement shall also apply to all identical or substantially similar taxes introduced after the date of signature of the Agreement in addition to or in place of the taxes referred to in paragraph 3. The competent authorities of the Contracting States shall notify each other of any significant changes made in their tax laws.

Article 3

GENERAL DEFINITIONS

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

(a) the term "Indonesia" includes the territory of the Republic of Indonesia as definedin its laws and adjacent territories over which the Republic of Indonesia exercises sovereigntylaw or jurisdiction under international law;

(b) the term "Luxembourg" means the territory of the Grand Duchy of Luxembourg;

(c) the term "person" includes an individual, a corporation and any other group of persons;

(d) the term "company" means any legal person or any entity treated as a unitlegal person for tax purposes;

e) the terms "enterprise of a Contracting State" and "enterprise of another Contracting State".Contracting State" means an enterprise carried on by a resident ofa Contracting State and an enterprise controlled by a resident of another Contracting State;

(f) the term "international traffic" means any transport by ship or aircraft operated byby an enterprise of a Contracting State, except the operation of a ship or aircraftonly between places in another Contracting State;

(g) the term "competent authority" means.

(i) in Indonesia:

the Minister of Finance or his authorized representative;

(ii) in Luxembourg:

the Minister of Finance or his authorized representative;

(h) the term "national" means:

(i) any person possessing the nationality of a Contracting State;

(ii) any legal person, partnership and association which as such has its own statutethe laws of the Contracting State;

(i) the terms "a Contracting State" and "the other Contracting State" mean Indonesiaand Luxembourg, depending on the context.

2. As used by a Contracting State, unless the context otherwise requires, any terms not specifically mentioned herein shall have the meaning they have in the law of that State with respect to the taxes to which the Convention may apply.

Article 4

RESIDENCE

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 circumstance of similar status earth. However, this term does not include persons who are liable to tax in that State in respect only of income from sources in that State or from capital situated therein.
2. If an individual is a resident of both Contracting States in accordance with the provisions of paragraph 1, his status shall be determined as follows:

(a) be deemed to be a resident of the State in which he has an habitual abodeavailable to him; if he has a permanent home available in both states, he will do soare considered to be residents of the country with which they have personal and economic tiesrelations are closer (centre of vital interests);

(b) if it is impossible to determine in which country he has his center of vital interests, or ifdo not have a permanent residence in any country are taken into accountbe a resident of the country of your habitual residence;

(c) if he is habitually resident in both or neither of the jurisdictionsthe authorities of the Contracting States shall settle the matter by mutual agreement.

3. If under the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the States shall settle the matter by mutual agreement.

Article 5

PERMANENT BUSINESS OFFICE

1. For the purposes of this Agreement, the term "permanent business entity" means a permanent place of business through which a business is conducted in whole or in part.
2. The term "permanent establishment" includes in particular

(a) place of administration;

(b) branch;

(c) required;

(d) factory;

e) workshop;

(f) a warehouse or premises used as a place of sale;

g) farm or plantation;

(h) a mine, oil or gas well, quarry or other natural resource extraction or exploration site, drilling rig or vessel for the exploration or exploitation of natural resources.

3. The term "establishment" includes a construction site or construction project, or supervision, assembly or installation work in connection therewith, but only if such construction, project or work in one of the Contracting States lasts more than 5 months.

4. Notwithstanding the above provisions of this Article, the term "permanent economic operator" does not include:

a) use of the premises solely for the purpose of storage or display of goods orcompany-owned goods;

(b) maintaining a stock of goods or goods belonging to the enterprisefor storage or display purposes only;

(c) maintaining a stock of goods or goods belonging to the enterprisesolely for processing by another company;

(d) maintaining a fixed place of business for the sole purpose of making purchasesgoods or merchandise or to collect information for the Company;

(e) maintaining a fixed location solely for advertising purposes, orto provide information or perform similar tasks involving the preparation orauxiliary character, for the company;

(f) maintaining a fixed place of business solely for the purpose of combining activitieslisted in subparagraphs (a) to (e), provided that the total activity is permanentthe place of business established as a result of this merger is the preparatory or auxiliary companyPretty.

5. Notwithstanding the provisions of paragraphs 1 and 2, if a person other than an independent agent to whom paragraph 7 applies is acting in a Contracting State on behalf of an enterprise of another Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in the scope of all activities performed by that person for the enterprise, if that person:

(a) has and regularly exercises a power of attorney to conclude contracts in that countryname of the company, unless the activities of that person are limited to itreferred to in paragraph 4 which, if carried out through a fixed place of business,would not make that permanent place of business a permanent business unitthe provisions of this paragraph;

(b) is not so authorized but normally maintains stocks in the first-mentioned countrygoods or goods from which it regularly supplies goods or goodson behalf of the company.

6. An insurance company of a Contracting State, other than reinsurance, shall be deemed to have a permanent establishment in the other Contracting State if it collects premiums in, or insures risks in, that other State through employees or an agent who is not an independent representative within the meaning of paragraph 1. 7.

7. 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 an agent, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of business . However, if the activities of such an agent are wholly or substantially wholly devoted to that enterprise or its affiliates, he shall not be considered an independent agent within the meaning of this paragraph.

8. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of another Contracting State or does business in that other State (whether through a permanent establishment or otherwise) does not in itself constitute a permanent establishment any activity of the other party.

Article 6

REAL ESTATE INCOME

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

2. The term "immovable property" shall have the meaning assigned to it by the law of the Contracting State in which the property is situated. The term includes in each case immovable property belonging to immovable property, livestock and equipment used in agriculture and forestry, rights subject to the provisions of general land law, usufruct of immovable property and rights to variable or fixed fees for the exploitation or the right to exploit mineral deposits, springs and other natural resources; ships, boats and planes are not considered real estate.

3. The provision of sec. 1 shall also apply to income from the direct use, rental or other use of real estate.

4. The provisions of sec. 1 and 3 shall apply to income from real estate companies and income from real estate used to provide independent personal services.

Article 7

BUSINESS PROFIT

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 company carries on business as aforesaid, the profits of the company may be taxed in the other State but only so much of them as is attributable to: a) that permanent establishment; (b) the sale of goods or goods of the same or similar kind in that other country as the goods sold through that fixed establishment; or (c) other business activities carried on in that other country of the same or similar nature as those carried on by that permanent establishment.

2. Pursuant to the provisions of paragraph 3, if an enterprise of a Contracting State carries on business in another Contracting State through a permanent business unit established there, then in each Contracting State a permanent business unit is a company which carries on the same or similar activities under the same or similar conditions and operates completely independently of the company of which it is a permanent business unit.

3. In determining the profit of a permanent business unit, the costs incurred to operate the permanent business unit, including management and general administrative expenses, may be deducted in the country where the permanent business unit is located or elsewhere. . However, no such deduction is permitted in respect of any amount paid by the permanent establishment to the head office or any of its other offices (other than reimbursement of actual expenses) for royalties, fees or other similar amounts. payments as consideration for the use of patents or other rights, or by way of commission, for certain services or management, or, except in the case of a banking enterprise, as interest on money borrowed for a specified periodbranch. Similarly, amounts collected by the permanent business unit from its registered office or any other office thereof (except for reimbursement of actual expenses) are not included in the determination of the profit of the permanent business unit. , in the form of royalties, fees or other similar payments for the use of patents or other rights, or in the form of commissions for certain services rendered or for management, or, except in the case of a banking company, in the form of interest on funds lent to the head office or other her branches.

4. For the purposes of applying the preceding paragraphs, profit per permanent establishment shall be determined year after year using the same method, unless there is good and sufficient reason to depart from this rule.

5. Where profit includes items of income that are dealt with separately in other articles of this Agreement, the provisions of this article shall be without prejudice to those articles.

Article 8

AIR AND AIR TRANSPORT

1. Profits derived from the use of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the company is a resident.

2. The provisions of sec. 1 shall also apply to benefits from participation in a pool, joint venture or international shipping company.

Article 9

RELATED COMPANIES

1. Where

(a) an enterprise of a Contracting State participating directly or indirectlythe management, control or capital of an enterprise of another Contracting State, or

(b) the same persons participate directly or indirectly in the management, control orthe capital of an enterprise of a Contracting State and an enterprise of another Contracting StateContracting State and in both cases, any profit which would have accrued to one of the companies in their commercial or financial relations which differs from those which would otherwise have been made by either of the companies but because of that that these conditions are not so cumulative, they may be included in the profits of that company and taxed accordingly.

2. [If a Contracting State includes in the profits of an enterprise of that State - and taxes accordingly - profits on which an enterprise of another Contracting State is liable to tax in that other State, and the profits so included are profits which would have been made to an enterprise of the first-mentioned State , if conditions were created between two companies as would be agreed between independent companies, that other country shall make an appropriate adjustment to the amount of tax levied in that country on those profits. In determining such adaptation, due regard shall be had to the other provisions of the Agreement and the competent authorities of the Contracting States shall consult as necessary.]

3. A Contracting State may not alter the company's profits in the circumstances referred to in paragraph 2 after the expiry of the time limits provided by its domestic law.

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 recipient of the dividends is the beneficial owner the tax so charged shall not exceed:

a) 10 per cent of the gross amount of the dividend if the beneficial owner is a company(not being a partnership) that directly owns at least 25 percent of the capitala company that pays dividends;

b) 15% of the gross amount of the dividend in all other cases.The competent authorities of the Contracting States shall take a decision by mutual agreementhow these restrictions are applied.

The provisions of this paragraph are without prejudice to the taxation of the company in respect of the profits out of which dividends are paid.

3. As used in this article, the term "dividends" means income from shares or other rights, other than debt claims, profit shares, and income from other corporate rights, which are subject to the same taxation as income from shares, according to the laws of distribution of a company in your country of residence.

4. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the dividends, being a resident of a Contracting State, carries on business in another Contracting State in which the company paying the dividends is a resident, through a permanent establishment incorporated in that State, or performs in that State from a fixed base situated therein, and the property in respect of which the dividends are paid is substantially attributable to such permanent establishment or fixed base. In such a case, the provisions of Art. 7 or Art. 14.

5. If a company which is a resident of a Contracting State receives profits or income in the other Contracting State, that other State shall not impose any tax on dividends paid by that company, except when such dividends are paid to a resident of a Contracting State State that other State. country or to the extent that the shares in respect of which the dividends are paid are substantially related to a permanent establishment or permanent establishment situated in that other country, nor are they subject to taxation of the Company's retained earnings on the Company's retained earnings, even if the dividends have been paid or the profits retained consists in whole or in part of profits or income from that other country.

6. If a company resident in Luxembourg has a permanent establishment in Indonesia, the profits of that permanent establishment in Indonesia may be subject to additional taxation under Indonesian law, but the additional tax so imposed may not exceed 10 per cent of the amount of those profits after deduction of the Indonesian income tax.

7. The provisions of paragraph 6 of this article are without prejudice to the provisions of production sharing agreements and employment contracts (or other similar agreements) relating to the oil and gas sector or other extractive sectors entered into by the Indonesian government, its instrument, its respective state-owned company oil and gas company or any other Luxembourg resident entity thereof.

Article 11

INTEREST

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

2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest, the tax charged shall not exceed 10 per cent of the gross amount of the interest. interest. The competent authorities of the Contracting States shall jointly determine the mode of application of this limitation.

3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and effected by the government of the other Contracting State, including its local authorities, shall be exempt from tax in the first-mentioned State.

4. For the purposes of paragraph 3, the term "Government" includes:

(a) For Indonesia:

(i) "Bank Indonesia" (Central Bank of Indonesia);

(ii) any other such wholly owned Financial InstitutionsGovernment of the Republic of Indonesia, as agreed over timein due course between the competent authorities of the Contracting States.

(b) for Luxembourg:

(i) "National Credit and Investment Company";

(ii) any other such wholly owned Financial InstitutionsThe Government of the Grand Duchy of Luxembourg, as agreed byfrom time to time between the competent authorities of Contracting States.

5. The term "interest" as used in this Article means income from debt-claims of every kind, whether or not mortgaged and whether or not entitled to a share of the debtor's profits, as well as special income from government securities and income from bonds or debentures, including bonuses and awards on such securities, debentures or bonds, and income equal to income on borrowed money according to the tax laws of the country in which the income arises, including interest on deferred sales.
6. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises through a permanent establishment established there or in another country of independent personal services with fixed place of business situated therein, and the claim on which interest is paid is actually connected with (a) that permanent establishment or fixed place of business, or (b) the business referred to in point (a). c) sec. 1 of Article 7. In such a case, the provisions of Article 7 or Article 14 shall apply accordingly.

7. Interest shall be deemed to arise in a Contracting State when the payer is itself, a local authority or a resident of that State. However, where 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 from which the debt giving rise to the interest arises, and the interest is borne by such permanent establishment or fixed establishment, then those interests are deemed to have arisen in the country where the permanent business unit or fixed establishment is located.

8. If, as a result of a special relationship between the payer and the beneficial owner or between both of them and any other person, the amount of interest in respect of the claim for which the payment is made exceeds the amount that would have been agreed between the payer and the beneficial owner in the absence of such a relationship, the provisions of this article apply only to the latter amount. In such case, the excess overpayment shall be taxable in accordance with the laws of each Contracting State, subject to the other provisions of this Agreement.

Article 12

AUTHORITIES AND COSTS OF TECHNICAL SERVICES

1. Royalties and fees for technical services which arise in a Contracting State and are paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties and fees for technical services, the tax so charged shall not exceed:

a) in the case of royalties, 12.5% ​​of the gross amount of these royalties,

b) in the case of fees for technical services - 10% of the gross amount of these fees.The competent authorities of the Contracting States shall take a decision by mutual agreementhow to apply this restriction.

3. The term "royalties" as used in this Article means payments, whether periodic or not, in whatever form, in any nomenclature or nomenclature, to the extent that they are made in exchange for

(a) use or right to use any copyright, patent, design or model, plan, secretformula or process, trademark or similar property or right; Or

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

(c) the provision of scientific, technical, industrial or commercial knowledge or information; Or

(d) use or right to use

(i) videos; Or

(ii) films or videos for use in connection with television; Or

(iii) tapes for use in connection with radio transmissions; Or

(e) total or partial waiver of use or delivery or any property or rightsfrom this paragraph.

4. The term "technical service fees" as used in this Article means payments of any kind to any person, other than payments to an employee of the person making the payment, for all services rendered as manager, of a technical or advisory nature in the Contracting State in where the payer has his place of residence or registered office.

5. The provisions of paragraphs 1 and 2 shall not apply if the owner of the royalties or fees for technical services, who is a resident of a Contracting State, carries on business in another Contracting State from which the royalties or fees for technical services originate. domiciled in that other country, or performs self-contained personal services in that other country through a permanent establishment domiciled in that other country from a permanent establishment there, and the right, property or contract for which royalties or royalties are paid technical services are actually related to (a) that permanent establishment or fixed place, or (b) to the economic activities referred to in Article 7 sec. 1 lit. c). In such a case, the provisions of Art. 7 or Art. .

6. Royalties and fees for technical services shall be deemed to arise in a Contracting State if the payer is that State or a local authority or a resident of that State. However, if the person paying the royalties or fees for technical services, whether he is a resident of a Contracting State or not, has in a Contracting State a fixed establishment or a fixed base in connection with which the obligation to pay was incurred, and such payments from that permanent establishment or fixed place of business, such royalties or fees for technical services shall be deemed to arise in the country in which the permanent establishment or fixed place of business is situated.

7. Where, as a result of a special relationship between the payer and the beneficial owner, or between both of them and any other person, the amount of royalties or fees for technical services exceeds the amount that would have been agreed between the payer and the beneficial owner in the absence of such a relationship, the provisions of this Article shall apply only to this last amount. In such case, the overpayment shall be taxable in accordance with the laws of each Contracting State, subject to the other provisions of this Agreement.

Article 13

CAPITAL PROFIT

1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 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 property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property belonging to a fixed base owned by a resident of a Contracting State in the other Contracting State available to the other State for professional purposes, including gains from the alienation of such permanent establishment (alone or with a whole enterprise) or fixed base, may be taxed in that other State.

3. Gains from the alienation of property other than those mentioned in the preceding paragraphs shall be taxable only in the Contracting State in which the transferor is a resident.

Article 14

INDEPENDENT PERSONAL SERVICES

1. Income derived by a resident of a Contracting State from professional services or other activities of an independent character shall be taxable only in that State, unless that resident has a fixed base in the other Contracting State to which he has constant access for the purpose of carrying out his business or is present in that other State for a period or periods which in the aggregate exceed 91 days in any tax year. If that person has such a permanent establishment or is present in that other State during the aforesaid period or periods, the income may be taxed in that other State, but only so much of it as is attributable to that fixed base or in that other State. during the said period or periods.

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

Article 15

DEPENDENT PERSONAL SERVICES

1. In accordance with the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar income derived by a resident of a Contracting State in respect of his employment shall be taxable only in that State, unless the employment is exercised in the other Contracting State State . Country. If the employment relationship is performed in this way, the income may be taxed in that other state.

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

(a) the recipient is resident in that other country for a period or periods not exceedinga total of 183 days during the tax year; AND

b) the compensation is paid by or on behalf of the foreign employeranother country; AND

(c) the compensation is not borne by the fixed establishment or fixed place of businessthe employer is located in another country.

3. Notwithstanding the preceding provisions of this Article, income from activities on a ship or aircraft operated in international traffic by an enterprise of a Contracting State shall be taxable only in that State.

ARTICLE 16

DRIVERS FEES

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

2. The remuneration that the person to whom paragraph 1 applies 1, receives from the company in connection with the performance of daily managerial or technical tasks, may be taxed in accordance with the provisions of art. 15 (Dependent Personnel Services).

Article 17

ARTISTS AND SPORTSmen

1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State from an artistic activity, for example, a theatre, motion picture, radio or television performer, musician or athlete, is derived from personal activities in accordance with article such in the other Contracting State may be taxed in that other State.

2. If income from personal activities performed by an entertainer or athlete in such a person's capacity belongs not to that entertainer or athlete but to another person, such income may, without prejudice to the provisions of articles 7, 14 and 15, be taxed by a government treaty in which under which the activities of artists or athletes are carried out.

3. Notwithstanding the provisions of paragraphs 1 and 2, income derived from the activities referred to in paragraph 1 carried out in accordance with a cultural agreement or an agreement between Contracting States shall be exempt from tax in the Contracting State in which the activities are carried out, if the visit to that State is wholly or in part financed by the funds of one or both of the Contracting States, their local authorities or public bodies.

Article 18

PENSIONS

In accordance with the provisions of Article 19, paragraph 2, any pension or other similar income paid to a resident of a Contracting State from sources in the other Contracting State on the basis of previous employment or service in that other Contracting State may be taxed in that other State .

Article 19

CIVIL SERVICE

1. (a) Remuneration, other than pensions, paid by a Contracting State or local authorityto any person in connection with services provided to that country or bodyonly be taxed in that country.

(b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and if the individual is a resident of that State who:

(i) is a national of that country; Or

(ii) did not become resident in that country solely for the purpose of processingServices.

2. (a) Pensions paid by a Contracting State or a local authority thereof or out of funds created by a Contracting State or a local authority thereof to an individual in respect of services rendered to that State or to that public authority shall be taxable only in that State.

(b) However, such pensions shall be taxable only in the other Contracting State if the individual is a resident of and a national of that other State.

3. The provisions of Articles 15, 16 and 18 apply to remuneration and pensions for services rendered in the course of the business of a Contracting State or a local authority thereof.

Article 20

TEACHERS, RESEARCHERS AND STUDENTS

1. A person who is present in a Contracting State at the invitation of that State or of that State's university, college, school, museum or other cultural institution, or as part of an official cultural exchange program for a period not exceeding two years, solely for the purpose of teaching, lecturing or conducting research in such base and who is a resident of, or was immediately prior to, a resident of the other Contracting State, shall be exempt from tax in the first-mentioned State in respect of remuneration for such activities, provided that such remuneration is received outside that State.

2. Fees charged by a student, trainee or apprentice who is, was or was a Contracting State immediately before entering a Contracting State, is a resident of another Contracting State and who is staying in the first-mentioned State solely for the purpose of studying or training for maintenance, education or training shall not be taxed in that first-mentioned State provided such payments are made to him from sources outside that State.

Article 21

OTHER ARRIVALS

That part of the income of a resident of a Contracting State not expressly referred to in the preceding articles of this Agreement shall be taxable only in that State, unlessincome from sources in the other Contracting State may also be taxed in that other State.

Article 22

MAIN

1. Property constituting immovable property referred to in Article 6 owned by a resident of a Contracting State and situated in the other Contracting State may be taxed in that other State.

2. Movable property forming part of the property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, or movable property belonging to a fixed establishment which is owned by a resident of a Contracting State in the other Contracting State Member State, available for the provision of personal services in a self-employed capacity may be taxed in that other State.

3. All other assets of a resident of a Contracting State shall be taxable only in that State.

Article 23

ABOLITION OF DOUBLE TAXATION

1. In Luxembourg, double taxation is eliminated as follows:

a) If a person resident in Luxembourg has income or assets whichsubject to the provisions of this Agreement, may be taxed in Indonesia,Luxembourg shall release them in accordance with points b) and c).income or wealth from tax, but can calculate the amount of tax on itresidual income or resident capital apply the same tax rates as if they wereincome or assets were not exempt.

(b) If a person resident in Luxembourg earns income which, in accordance with Artthe provisions of articles 10, 11, 12 and 21 may be taxed in Indonesia, Luxembourgan amount equal to the resident's income taxfor tax paid in Indonesia. However, this deduction may not exceed this parttax, calculated before deduction, accruing to himcomponents of income from Indonesia.

(c) When a Luxembourg resident company receives dividendsfrom Indonesian sources, Luxembourg will exempt such dividends from tax, provided thatthat a company directly resident in Luxembourg holds at least 25% ofpercentage of the capital of the company paying the dividend from the beginning of its existencefinancial year. The aforementioned shares in the Indonesian company includeunder the same conditions, exempt from Luxembourg wealth tax.

2. Double taxation is eliminated in Indonesia as follows:If a resident of Indonesia obtains income in Luxembourg in accordance with the provisions of this Agreement, the amount of Luxembourg tax payable onthe income will be credited against the Indonesian tax levied on that resident.However, the amount of the loan will not exceed the amount of Indonesian taxappropriate for this income.

Article 24

NON-DISCRIMINATION

1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is different or more onerous than the taxation and related obligations to which nationals of that other State are or may be subject in the same circumstances. This provision, notwithstanding the provisions of Article 1, shall also apply to persons who are not residents of one or both of the Contracting States.

2. The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favorable in that other State than that applied to enterprises of that other State engaged in the same business.

This provision shall not be construed as obliging a Contracting State to grant to persons resident of the other Contracting State for tax purposes any personal allowances, allowances and allowances it grants to its residents.

3. Enterprises of a Contracting State whose capital is wholly or partly owned or controlled directly or indirectly by one or more resident of the other Contracting State shall not be subject in the first-mentioned State to any tax or liability in respect of which otherwise or inconveniently arise from the taxes and related obligations to which other similar enterprises of the first country are or may be subject.

4. Interest, royalties and other payments paid by a company of a Contracting Stateto a resident of another Contracting State for determinationthe taxable profits of such activities are deductible under the same conditions as if they were deductiblepaid to a resident of the previous country. Just like all debtsa company of a Contracting State to a resident of another Contracting State, e.gin order to determine the taxable capital of such a company, which is deductible in accordance with Articleunder the same conditions as if they had been concluded with a person domiciled in the first country.

5. In this Article, the term "taxation" means the taxes subject to this Agreement.

Article 25

MUTUAL AGREEMENT PROCEDURE

1. If a person considers that measures taken by one or both of the Contracting States result in or will result in him being subject to taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies available under the domestic law of those States, submit his case to the competent authority of the Contracting State State in which he is domiciled or, if the matter falls within the scope of Article 24, paragraph 1, to the authority of the Contracting State of which he is a national. .[The second sentence of paragraph 1 of Article 25 of this Agreement is replaced by the second sentence of paragraph 1 of Article 16 of the MLI][The case must be brought within two years from the first notification of the action resulting in taxation inconsistent with the terms of the contract.]

2. The competent authority, if it considers that the objection is well-founded and if no satisfactory solution can be reached, shall endeavor to resolve the matter by mutual agreement with the competent authority of the other Contracting State, in order to avoid taxation inconsistent with Article 5. with this Agreement.

3. The competent authorities of the Contracting States shall endeavor to resolve by mutual agreement any difficulties or doubts arising out of the interpretation or application of the Agreement. They may also consult each other to avoid double taxation in cases not covered by the Treaty.

4. The competent authorities of the Contracting States may communicate directly with a view to reaching an agreement within the meaning of the preceding paragraphs. The competent authorities shall, through consultation, develop appropriate bilateral procedures, conditions, methods and techniques for implementing the mutual agreement procedure provided for in this Article.

Article 26

AN EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchange information which is necessary for the implementation of the provisions of this Convention or of the domestic laws of the Contracting States in respect of the taxes to which this Convention applies, to the extent that taxation under it is not inconsistent with the Agreement, in particular to prevent 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 way as information obtained under the domestic law of that State. However, if the information is originally classified in the sending country, it will only be disclosed to persons or authorities (including courts and administrative authorities) involved in the assessment or collection, enforcement, prosecution or appeal of a decision in relation to the relevant tax agreement. Such persons or entities will only use the information for these purposes, but may disclose the information as part of public legal proceedings or court orders.

2. In no case shall the provisions of paragraph 1 be construed as requiring a Contracting State to:

(a) performing administrative activities that violate the law and administrative regulationsthe practice of that or any other Contracting State;

(b) to provide information that cannot be obtained lawfully or in the normal course of businessthe administration of that or any other Contracting State;

(c) provide any information that could affect any commercial, business, industrial,trade or professional secret or trade process or information, disclosurewhich would be contrary to public policy (public policy).

Article 27

DIFFERENT RULES

The provisions of this Agreement shall not be construed as limiting in any way any exclusions, waivers, deductions, credits or other exemptions granted now or in the future:

(a) in accordance with the law of a Contracting State in determining the tax imposed by that State, or

(b) any other special tax regime in connection with business ortechnical cooperation between Contracting States.

Article 28

DIPLOMATIC AGENTS AND CONSULAR OFFICIALS

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

Article 29

EXCLUSION OF CERTAIN BUSINESSES

This Agreement shall not apply to holding companies (sociétés holding) within the meaning of the special Luxembourg laws, now the law (loi) of 31 July 1929 and the decree (arrêté grand-ducal) of 17 December 1938, nor to companies under a similar law tax in Luxembourg. It will also not apply to income earned by a resident of such companiesIndonesia or to shares or other rights in such companies held by such person.

Article 30

FORCE ENTRY

1. This Agreement shall enter into force at a later date when the Governments concerned may be notified in writing that the formalities provided for in the constitutions of their States have been completed.

2. This agreement has the effect of:

(a) in respect of withholding tax on income earned on or after 1 Januarythe year following the year in which the Agreement enters into force; AND

(b) in respect of other taxes on income and capital, for tax years beginning on orafter January 1 of the year following the year in which the Agreement enters into force.

Article 31

END

This Agreement shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Agreement through diplomatic channels by written notice of termination no later than June 30 of each calendar year following the period of five years from the year in which the Agreement entered into force. In this case, the Agreement ceases to apply:

(a) in respect of withholding tax on income earned on or after 1 Januarythe year following the year in which the annulment was made.

(b) with respect to other taxes on income and capital, for tax years beginning on or after January 1 of the year following the year in which the notice of termination is given.