Australian Tax Treaties
Indonesian Agreement
AGREEMENT BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE REPUBLIC OF INDONESIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
ARTICLE 24
Methods of Elimination of Double Taxation
(1)
Subject to the provisions of the law of Australia from time to time in force which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle of this Article), Indonesian tax paid under the law of Indonesia and in accordance with this Agreement, whether directly or by deduction, in respect of income derived by a person who is a resident of Australia from sources in Indonesia shall be allowed as a credit against Australian tax payable in respect of that income.
(2)
Where a company which is a resident of Indonesia and is not a resident of Australia under the law of Australia relating to its tax pays a dividend to a company which is a resident of Australia and which controls directly or indirectly not less than l0 per cent of the voting power of the firstmentioned company, the credit referred to in paragraph 1 shall include the Indonesian tax paid by that firstmentioned company in respect of that portion of its profits out of which the dividend is paid.
(3)
Where a resident of Indonesia derives income from Australia which may be taxed in Australia in accordance with the provisions of this Agreement, the amount of Australian tax payable in respect of that income shall be allowed as a credit against the Indonesian tax imposed on that resident in respect of the income. The amount of credit, however, shall not exceed that part of the Indonesian tax which is appropriate to that income.
(4)
The amount of Australian tax payable on income derived by a resident of Indonesia to whom paragraph 3 applies shall be increased, before the application of that paragraph in that case, by an amount equal to any amount paid by that resident under the Fringe Benefits Tax Act 1986 of Australia.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI) has modified the application of this tax treaty. A synthesised text of the MLI and this tax treaty is available to facilitate the understanding of how the MLI modifies this tax treaty.
Subject to the provisions of the law of Australia from time to time in force which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle of this Article), Indonesian tax paid under the law of Indonesia and in accordance with this Agreement, whether directly or by deduction, in respect of income derived by a person who is a resident of Australia from sources in Indonesia shall be allowed as a credit against Australian tax payable in respect of that income.
(2)
Where a company which is a resident of Indonesia and is not a resident of Australia under the law of Australia relating to its tax pays a dividend to a company which is a resident of Australia and which controls directly or indirectly not less than l0 per cent of the voting power of the firstmentioned company, the credit referred to in paragraph 1 shall include the Indonesian tax paid by that firstmentioned company in respect of that portion of its profits out of which the dividend is paid.
(3)
Where a resident of Indonesia derives income from Australia which may be taxed in Australia in accordance with the provisions of this Agreement, the amount of Australian tax payable in respect of that income shall be allowed as a credit against the Indonesian tax imposed on that resident in respect of the income. The amount of credit, however, shall not exceed that part of the Indonesian tax which is appropriate to that income.
(4)
The amount of Australian tax payable on income derived by a resident of Indonesia to whom paragraph 3 applies shall be increased, before the application of that paragraph in that case, by an amount equal to any amount paid by that resident under the Fringe Benefits Tax Act 1986 of Australia.
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