Hungaria (Hungary)
AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDONESIA AND THE GOVERNMENT OF THE HUNGARIAN PEOPLE’S REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME The Government of the Republic of Indonesia and the Government of the Hungarian People’s Republic, DESIRING to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and to further develop and facilitate their economic relationship, HAVE AGREED AS FOLLOWS: Article 1PERSONAL SCOPE This Agreement shall apply to persons who are residents of one or both of the Contracting States. Article 2TAXES COVERED 1. This Agreement shall apply to taxes on income imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied. 2. There shall be regarded as taxes on income all taxes imposed on total income or on elements of income, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation. 3. The existing taxes to which the Agreement shall apply are, in particular: (a) in Indonesia: the income tax imposed under the Undang-undang Pajak Penghasilan 1984 (Law No. 7 of 1984 and to the extent provided in such income tax law, the company tax imposed under the Ordinansi Pajak Perseroan 1925 (State Gazette No. 319 of 1925 as lastly amended by Law No. 8 of 1970) and the tax imposed under the Undang-undang Pajak atas Bunga, Dividen dan Royalti 1970 (Law No. 10 of 1970), (hereinafter referred to as “Indonesian tax”); (b) in the Hungarian People’s Republic the income tax the profits taxes the special corporation tax (hereinafter referred to as “Hungarian tax”). 4. The Agreement shall also apply 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, those referred to in paragraph 3. The competent authorities of the Contracting States shall notify each other of any substantial changes which have been made in their respective taxation laws. Article 3GENERAL DEFINITIONS 1. For the purposes of this Agreement, unless the context otherwise requires: (a) (i) the term “Indonesia” comprises the territory of the Republic of Indonesia as defined in its laws and the adjacent areas over which the Republic of Indonesia has sovereign rights or jurisdiction in accordance with the provisions of the United Nations Convention on the Law of the Sea, 1982; (ii) the term “Hungarian People’s Republic” when used in a geographical sense means the territory of the Hungarian People’s Republic; (b) the terms “a Contracting State” and “the other Contracting State” mean the Hungarian People’s Republic or the Republic of Indonesia as the context requires; (c) the term “person includes an individual, a company and any other body of persons; (d) the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes; (e) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean, respectively, an enterprise carried resident of a Contracting State and an enterprise carried on by a resident of the other contracting State; (f) the term “international traffic” means any transport by a ship or aircraft operated by a resident of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; (g) the term “competent authority” means: (i) in Indonesia: the Minister of Finance or his authorized representative; (ii) in the Hungarian People’s Republic: the Minister of Finance or his authorized representative; (h) the term “national” means: (i) any individual possessing the nationality of a Contracting State; (ii) any legal person, partnership and association deriving its status as such from the laws in force in a Contracting State. 2. As regards the application of the Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Agreement applies. Article 4RESIDENT 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 respect only of income from sources in that State. 2. Where, by reason of the provisions of paragraph 1, an individual is a resident of both Contracting States, then his status shall be determined as follows: (a) he shall he deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests); (b) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has a habitual abode; (c) if he has a habitual abode in both States or in neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3. Where, by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the States shall settle the question by mutual agreement. Article 5PERMANENT ESTABLISHMENT 1. For the purposes of this Agreement, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried