Korea Selatan (South Korea)
AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDONESIA AND THE GOVERNMENT OF THE REPUBLIC OF KOREA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME Article 1 PERSONAL SCOPE This Agreement shall apply to persons who are residents of one or both of he Contracting States. Article 2 TAXES COVERED This Agreement shall apply to taxes on income imposed on behalf of each Contracting State, irrespective of the manner in which they are levied. 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 and taxes on the total amounts of wages or salaries paid by enterprises. The taxes which are the subject of this Agreement are: (a) in Indonesia : the income tax (Pajak Penghasilan), and to the extent provided in such income tax, the company tax (Pajak Perseroan), and the tax on interest, pidends, and royalties (Pajak atas Bunga, Dividen dan Royalti); (hereinafter referred to as “Indonesian Tax”); (b) in Korea: (i) the income tax; (ii) the cooperation tax; (iii) the inhabitant tax where charged by reference to the income tax or the corporation; (hereinafter referred to as “Korean Tax”). This Agreement shall also apply to any identical or substantially similar taxes on income which are imposed after the date of signature of this 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 3 GENERAL DEFINITIONS In 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 parts of the continental shelf and adjacent seas, over which the Republic of Indonesia has sovereignty, sovereign rights or other rights in accordance with international law; (ii) the term “Korea” comprises the territory of the Republic of Korea as defined in its laws and parts of the continental shelf and adjacent seas, over which the Republic of Korea has sovereignty, sovereign rights or other rights in accordance with international law; (b) the terms “a Contracting State” and “the other Contracting State” mean Indonesia or Korea as the context requires; (c) the term “tax” means Indonesian tax or Korean tax, as the context requires; (d) the term “person” includes an inpidual, a company and any other body of persons which is treated as an entity for tax purposes; (e) the term “company” means any body corporate 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 a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; (h) the term “competent authority” means : (i) in Indonesia: the Minister of Finance or his authorized representative; (ii) in Korea: the Minister of Finance or his authorized representative; (i) the term “national” means : (a) all inpiduals possessing the nationality of a Contracting State; (b) all legal persons, partnerships and associations deriving their status as such from the laws in force in a Contracting State. As regards the application of this Agreement by a Contracting State, any term not defined in this Agreement shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State concerning the taxes to which this Agreement applies. Article 4 RESIDENT For the purposes of this Agreement, the term “resident of a Contracting State” means any person who, under the laws of that Contracting State, is treated as a resident for tax purposes in that Contracting State. 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. Where by reason of the provisions of paragraph 1 an inpidual 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 States or in neither of them, the competent authorities of the two Contracting States shall settle the question by mutual agreement. Where by reason of the provisions of paragraph 1 a person other than an inpidual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated. Article 5 PERMANENT ESTABLISHMENT 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. The term “permanent establishment” includes especially: (a) a place of management; (b) a branch; (c) an office; (d) a factory (e) a workshop; and (f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. The term “permanent establishment” likewise encompasses: (a) A building site or