Italia (Italy)
AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDONESIAANDTHE GOVERNMENT OF THE ITALIAN REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND THE PREVENTION OF FISCAL EVASION The Government of the Republic of Indonesia and the Government of the Italian Republic, DESIRING to conclude an agreement for the avoidance of double taxation with respect to taxes on income and the prevention of fiscal evasion, 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, 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 the case of Indonesia: the income tax and, to the extent provided in such income tax, the company tax imposed under the Ordinansi Pajak Perseroan 1925 (State Gazette No. 319 Year 1925 as lastly amended by Law No. 8 Year 1970) and the tax imposed under the Undang-Undang Pajak atas Bunga, Dividen dan Royalti 1970 (Law No. 10 Year 1970); whether or not they are collected by withholding at source, (hereinafter referred to as “Indonesian tax”), (b) In the case of Italy: i. – the personal income tax (l’imposta sul reddito delle persone fisiche); ii. – the corporate income tax (l’imposta sul reddito delle persone giuridiche); whether or not they are collected by withholding at source, (hereinafter referred to as “Italian tax”). 4. The Agreement shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant 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 “Italy” means the Italian Republic and includes any area beyond the territorial waters of Italy which, in accordance with the laws of Italy concerning the exploration and exploitation of natural resources, may be designated as an area within which the rights of Italy with respect to the seabed and subsoil and natural resources may be exercised; (b) the terms “a Contracting State” and “the other Contracting State” mean Indonesia or Italy 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 on by a 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 an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; (g) the term “nationals” means: (i) all individuals possessing the nationality of a Contracting State; (ii) all legal persons, partnerships and associations deriving their status as such from the laws in force in a Contracting State; (h) the term “competent authority” means: (i) in the case of Indonesia: the Minister of Finance or his authorized representative; (ii) in the case of Italy: the Ministry of Finance. 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 laws 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 situated 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 be 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 an habitual abode; (c) if he has an habitual abode in both