Kanada (Canada)
PROTOCOL AMENDING THE CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDONESIA AND THE GOVERNMENT OF CANADA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME Article I The title and the preamble of the Convention shall be deleted and replaced by the following: “CONVENTION BETWEEN THE GOVERNMENT OF CANADA 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 The Government of Canada and the Government of the Republic of Indonesia, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed as follows:” Article II Article 2 (Taxes covered) of the Convention shall be deleted and replaced by the following: “Article 2 Taxes covered 1. This Convention shall apply to taxes on income imposed on behalf of each 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 amount of wages or salaries paid by enterprises, as well as taxes on capital appreciation. 3. The existing taxes to which the Convention shall apply are, in particular : (a) in the case of Indonesia : — the income tax imposed under the Undang-undang Pajak Penghasilan 1984 (Law number 7 of 1983 as amended) (hereinafter referred to as “Indonesian tax”). (b) in the case of Canada : the income taxes imposed by the Government of Canada, (hereinafter referred to as ” Canadian tax”) 4. The Convention shall also apply to any identical or substantially similar taxes on income which are imposed by either Contracting State after the date of signature of this Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any substantial changes which have been made to their respective taxation laws.” Article III 1. Subparagraph l(a) of Article 3 (General definitions) of the Convention shall be deleted and replaced by the following:In this Convention, unless the context otherwise requires : (a) (i) the term “Canada”, used in a geographical sense, means the territory of Canada, including: (A) any area beyond the territorial seas of Canada which, in accordance with international law and the laws of Canada is an area within which Canada may exercise rights with respect to the seabed and subsoil and their natural resources; (B) the seas and airspace above any area referred to in subparagraph (A) in respect of any activity carried on in connection with the exploration for or the exploitation of the natural resources referred to therein; (ii) 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 international law;” 2. Paragraph 1 of Article 3 (General definitions) of the Convention shall be amended by adding thereto, immediately after subparagraph (h), the following subparagraph (i): (i) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except where the operation of the ship or aircraft is solely between places in the other Contracting State.” Article IV Paragraph 1 of Article 4 (Fiscal domicile) of the Convention shall be deleted and replaced by the following: 1. For the purposes of this Convention, the term “resident of a Contracting State” means: (a) 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; and (b) the Government of that Contracting State or a political subpision or local authority thereof or any agency or instrumentality of any such government, subpision or authority. However, the term does not include a permanent establishment within the meaning of subparagraph c. of paragraph (3) of Article 2 of the Indonesian Law Number 7 of 1983 concerning income tax as amended.” Article V 1. Subparagraph 2(h) of Article 5 (Permanent establishment) of the Convention shall be deleted and replaced by the following: (h) a building site, a construction, installation or assembly project or supervisory activities in connection therewith, where such site, project or activity continues for a period of more than 120 days;” 2. Subparagraph 2(i) of Article 5 (Permanent establishment) of the Convention shall be deleted and replaced by the following: (i) the furnishing of services, including consultancy services, by an enterprise through an employee or other person (other than an agent of an independent status within the meaning of paragraph 6) where the activities continue within a Contracting State for more than 120 days within any twelve month period.” Article VI Paragraph 2 of Article 8 (Shipping and air transport) of the Convention shall be deleted and replaced by the following: 2. Notwithstanding the provisions of paragraph 1 and of Article 7, profits derived from the operation of ships or aircraft used principally to transport passengers or goods between places in a Contracting State may be taxed in that State. 3. The provisions of paragraph 1 shall also apply to profits derived by an enterprise from its participation in a pool, a joint business or in an international operating agency but only to so much of the profits so derived as is allocable to the participant in an international joint venture in proportion to its share in the joint operation.” Article VII Paragraph 2 of Article 10 (Dividends) of the Convention shall be deleted and replaced by the following: “2. However, such pidends may also be taxed in the Contracting State of which the company paying the pidends is a resident and according to the laws of that State, but if the beneficial owner