Tax Treaty - Efektif

Kroasia (Croatia )

  • Status : In Force | Effective : 1 Jan 2013 | Signed : 15 Feb 2002 |
AGREEMENT BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE GOVERNMENT OF THE REPUBLIC OF CROATIA

FOR

THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME


The Government of the Republic of Indonesia and The Government of the Republic of Croatia

DESIRING to conclude an Agreement for the avoidance of double taxation with respect to taxes on income,

HAVE AGREED AS FOLLOW:


Article 1
PERSONAL SCOPE

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


Article 2
TAXES CONVERED

(1) This Agreement shall apply to taxes on income imposed on behalf of a Contractiong State or of its 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.
(3) The existing taxes to which this Agreement shall apply are:
a) in the Republic of Indonesia:
the income tax imposed under the Undang-undang Pajak Penghasilan 1984 (Law Number 7 of 1983 as arrended).(hereinafter referred to as Indonesian tax);
b) in the Republic of Croatia:
(i) the profit tax,
(ii) the income tax;
(hereinafter referred to as Croatian 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. At the end of each year, the competent authorities of the Contracting States shal notify each other of any substantial changes which have been made in their respective taxation laws.


Article 3
GENERAL DEFINITIONS

(1) For the purposes of this Agreement, unless the context otherwise requires:
a) the term Indonesia, means the territory of the Republic of Indonesia as defined in its laws;
b) the term Croatia means the territory of the Republic of Croatia as well as those maritime areas adjacent to the outer limit of territorial sea, including seabed and subsoil thereof, over which the Republic of Croatia in accordance with international law (and the laws of the Republic of Croatia) exercises its sovereign rights and jurisdiction;
c) the terms a Contracting State and the other Contracting State means, as the context requires, Indonesia or Croatia;
d) the term person includes an individual, a company and any other body of persons;
e) the term company means any body coporate or any entity which is treated as a body corporate for tax purposes;
f) the terms enterprise of a Contracting State and enterprise of the other Contracting 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;
g) the term international traffic means any transport by a ship or aircraft operated by an enterprise of Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
h) the terms national means any individual possessing the citizenship of a Contracting State and any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State;
i) the term competent authority means:
(i) in the case of Indonesia, the Minister of Finance or his authorized representative;
(ii) in the case of Croatia, the Minister of Finance or his authorized representative.
(2) As regards the application of the Agreement at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purpose of the taxes to which the Agreement applies, any meaning under the applicable tax laws of the State prevailing over a meaning given to the term under other laws of that State.


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. But this term does not include any person who is liable to tax in that State in respecty only of income from sources in that State.
(2) Where by reason of the provision of paragraph I 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 only 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 center of vital interest 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 only 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, he shall be deemed to be a resident only of the State of which he is a national;
d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
(3) Where by reason of the provisons of paragraph I a person other than an individual is a resident of both Contracting States, then itu shall be deemed to be a resident only of the State in which its place of effective management is situated.


Article 5
PERMANENT ESTABLISHMENT

(1) For the purpose 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 plantation, and
g) a mine, an oil or gas well a quarry or any other place of extraction or exploration or exploitation of natural resource.
(3) The term permanent establishment likewise encompasses:
a) a building site or construction, assembly or installation project or supervisory activities in connection therewith, but only where they last more than 6 months;
b) the furnishing of services, including consultant services by an enterprise of a Contracting State through employees or other engaged personnel in the other Contracting State, provided that such activities continue for the same project or a connected project for a period or periods aggregating more than 3 months within any twelve month period.
c) the use of an installation or drilling rig or ship in a Contracting State to explore for or exploit natural resources constitutes a permanent establishment only if such use for more than 120 days.
(4) Notwithstanding the preceding provisions this Article, the term permanent establishment shall be deemed not to include:
a) the use of facilities solely for the purpose of storage, 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 strorage, display;
c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of prosessing 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) to e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.
(5) Notwithstanding the provisions of paragraphs 1 and 2, where a person-other than an agent of an independent status to whom paragraph 6 applies-is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the nama of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes, for 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.
(6) An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that 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.
(7) The fact that a company which is a residen 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.


Article 6
INCOME FROM IMMOVABLE PROPERTY

(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 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 provisons 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 resource. Ships 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 taxed in the other State but only so much of them as is attributable to 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 it were distinct and separate enterprise engaged in the same or similar activities under the same or similar condition and dealing wholly independently with the enterprise of which it is a permanent establishment.
(3) In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes 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. This Provision shall apply subject to limitations under domestic law.
(4) Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of 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 mere purchase by that permanent establishment of goods or merchandise for the enterprise.
(6) For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
(7) Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.


Article 8
SHIPPING AND AIR TRANSPORT

(1) Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State of which the enterprise operating the ships or aircraft is a resident.
(2) For the purposes of this Article, profits from the operation in international traffic of ships and aircraft include:
a) profits derived from the incidental charter or rental of ships and aircraft in international traffic, on a bareboat basis;
b) profits derived from the use, maintenance or rental of containers (including related equipment for the transport of containers), used for the transport of goods or merchandise;
provided that such rental, use or maintenance is incidental or supplementary to the operation of ships and aircraft in international traffic.
(3) 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

(1) 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, or
b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any 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 taxed accordingly.
(2) Where a Contracting State includes in the profits of an enterprise of that State and taxes accordingly profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, dua regard shall be had to the other provisions of this Agreement and the competent authorities of the Contracting States shall if necessary consult each other.
(3) A Contracting State shall not change the profits of an enterprise in the circumstances refereed to in paragraph 2 after the expiry of the time limits provided in its tax laws.


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 taxed in the Contracting State of which the company paying the dividens 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 10% of the gross amount of the dividends.
The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of these limitations.
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 or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident.
(4) The provisions of paragraph 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 of fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
(5) Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the companys undistributed profits to a tax on the companys 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 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 other State in accordance with its law, but the additional tax so charged shall not exceed, 10 per cent of the amount of such profits after deducting therefrom income tax and other taxes on income imposed thereon in that other State.
(7) The provision of paragraph 6 of this Article shall not affect the provisions contained in any production sharing contract and contracts of work (or any other similar contracts) relating to oil and gas sector or other mining sector concluded 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 the other Contracting States


Article 11
INTEREST

(1) Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
(2) However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.
(3) Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and derived by the Government of the other Contracting State including local authorities 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 between the competent authorities of the Contracting States, shall be exempt from tax in the first-mentioned 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 debtors 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. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.
(5) The provisions of paragraphs 1 and 2 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 payer is that State itself, 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 deemend 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 payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in tha 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 according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.


Article 12
ROYALTIES

(1) Royalties arising in a Contracting State and paid to a resident to 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 Contracting 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% 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, films, or tapes or other means for radio or televisions broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience (know-how).
(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 payer is that State itself, a local authority thereof or a resident of that Contracting 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 demeed to arise in the Contracting State in which the permanent establishment or the fixed base is situated.
(6) Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount, In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.


Article 13
CAPITAL GAINS

(1) Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.
(2) Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed 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 shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a Contracting State may be taxed in that Contracting State.
(5) Gains from the alienation of any property other than that referred to in paragraphs 1 to 4 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 one of the following circumstances, when such income may also be taxed 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 may be taxed in that other State as is attributable to that fixed base; or
b) if his stay in the other Contracting State is for a period or periods exceeding in the aggregate 90 days within any 12 month period. In that case only so much of the income may be taxed in that other State as is derived from his activities performed 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 and 19 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 exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.
(2) Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the firs-mentioned State if:
a) the recipient is present in that other State for a period or periods not exceeding in the aggregate 183 days within any twelve month period, and
b) the remuneration is paid by, 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 which the employer 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 in international traffic by an enterprise of Contracting State may be taxed in that State.


Article 16
DIRECTORS FEES

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 any other similiar organ of a company which is a resident of the other Contracting State may be taxed in that other State.


Article 17
ARTISTES AND SPORTSMEN

(1) Notwithstanding the provisions of Article 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artist, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting States, may be taxed in that other State.
(2) Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised.


Article 18
PENSIONS

Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only that State.


Article 19
GOVERNMENT SERVICE

(1)
a) Remuneration, other than a pension, paid by a Contracting State or a local authority thereof to an individual in respect of services rendered to that State or a local 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 local authority thereof to an individual in respect of services rendered on that State or local 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 conncetion with a business carried on by a Contracting State or a local authority thereof.


Article 20
PROFESSORS, TEACHERS, STUDENTS AND TRAINEES

(1) Remuneration which a professor or teacher 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 for a period not exceeding two years for the purpose of carrying out advanced study or research or for teaching at a university, college, school or other similar educational institution receives for such an activity shall not be taxed in the first-mentioned State, provided that such remunerations arise from sources autside that State.
(2) An individual 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 as a student at a university, college, school or other similar educational institution or as trainee shall, form the date of this first arrival in that State in connection with that visit, be exempt from tax in that State:
a) on all payments received for the purpose of his maintenance, education or training, provided that such paymanets arise from sources outside that State, and
b) for a period not exceeding 2 years, on any remuration not exceeding US$ 1200 per calender year for dependent personal sevices rendered in that State with view to supplementing the resources available to him for such purposes.
(3) An individual 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 study, research or training as a recipient of a grant, allowance or award from a scientific, educational, religious or charitable organization or under a technical assitance program entered into by the Government of a Contracting State shall, for a period not exceeding two years from the date of his first arrival in the first-mentioned State in connection with that visit, be exempt from tax in that State on:
a) the amount of such a grant, allowance, or award; and
b) all payments received for the purpose of his maintenance, education or training, provided that such payments arise 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 on the foregoing Articles of this Agreement, other than income in the form of lotteries, prizes shall be taxable 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.


Article 22
ELIMINATION OF DOUBLE TAXATIN

(1) Where a resident of Indonesia derives income from Croatia, the amount of tax on that income payable in Croatia, in accordance with the provisions of this Agreement, shall be allowed as a credit against the tax levied in Indonesia Imposed on that resident. The amount of credit, however, shall not exceed the amount of the tax in Indonesia on that income computed in accordance with its taxation laws and regulations.
(2) Where a resident of Croatia derives income which, in accordance with the provisions of this Agreement, may be taxed in Indonesia. Croatia shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Indonesia. Such deduction shall not, however, exceed that part of the income tax as computed before the deduction is given, which is attributable to the income which may be taxed in Indonesia.
(3) Notwithstanding the provisions of its law, Indonesia shall also allow the credit provided for in the paragraph 2, in respect of tax which may be charged in Croatia on dividends, in accordance with provisions of paragraph 2 of Article 10 and interest, in accordance with provisions of paragraph 2 of Article 11, by virtue of this Agreement, but which is temporarily exempted or reduced under Croatian tax laws.


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 are or may be subjected.
(2) The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favorable levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provisions 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) 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.
(4) Except where the provisions of paragraph 1 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 sama conditions as if they had been paid to a resident of the first-mentioned State.
(5) The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and description, except for local taxes imposed by municipality.


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 be competent authority of the Contracting State of which he is resident or, if this 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 endeavor, 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 avoidande of taxation which is not in accordance wituh the Agreement.
(3) The competent authorities of the Contracting States shall endeavor to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement.
(4) The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a commission consisting of representatives of the competent authorities of the Contracting States.


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. 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 courts 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 I be construed so as to impose on a Contracting State the obligation:
a) to carry out administrative measures at veriance 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 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 (ordre public).


Article 26
MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Agreement shall effect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.


Article 27
ENTRY INTO FORCE

(1) This Agreement shall enter into force on the later of the dates on which the respective Governments may notify each other in writing through diplomatic channels that the formalities constitutionally required in their respective States have been complied with.
(2) This Agreement shall have effecet:
a) in respect of tax withheld at the source to income derived on or after 1 January in the year next following that in which the Agreement enters into forse; and
b) in respect of other taxes on income, for taxable years beginning on or after 1 January in the year next following that in which the Agreement enters into force.


Article 28
TERMINATION

This Agreement shall remain in force indefinitely but either of the Contracting States may, on or before the 30th day of June in any calendar year beginning after the expiration of a period of five years from the date of its entry into force, give written notice of termination to the other Contracting State through diplomatic channels.
In such case, the Agreement shall cease to have effect:
a) in respect of tax witheld at source to income derived on or after 1 January in the year next following that in which the notice of termination is given.
b) in respect of other taxes on income, for taxable years beginning on or after 1 January in the year next following that in which the notice of termination is given/

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this Agreement.

Done at Jakarta, on the 15th day of February 2002, in duplicate in the Indonesia, Croatian and English languages, all texts being equally authentic.

In case of any divergence of interpretations of the Indonesian and Croatian texts, the English text shall prevail.



FOR THE GOVERNMENT OF THE
REPUBLIC OF INDONESIA

sgd
FOR THE GOVERNMENT OF THE
REPUBLIC OF CROATIA

sgd

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