Pakistan (Pakistan)
AGREEMENT BETWEENTHE GOVERNMENT OF THE REPUBLIK OF INDONESIAANDTHE GOVERNMENT OF THE ISLAMIC REPUBLIC OF PAKISTAN FORTHE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME Article 1PERSONAL SCOPE This Agreement shall apply to persons who are resident of one or both of the Contracting States. Article 2TAXES COVERED This Agreement shall apply to taxes on income imposed on behalf of a Contracting State or of its political sub-pisions or local authorities, 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 property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation. The existing taxes to which the Agreement shall apply are : (a) in Pakistan : (i) the income tax; (ii) the super tax; and (iii) the surcharge, (hereinafter referred to as “Pakistan tax”) (b) in Indonesia :the income tax (pajak-penghasilan),(hereinafter referred to as “Indonesian tax”). This Agreement shall also apply to any identical or substantially similar taxes (including surcharge in Indonesia) which are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes 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 within a reasonable period of time after such changes. Article 3GENERAL DEFINITIONS For the purposes of this Agreement, unless the context otherwise requires : (a) the term “Pakistan” used in a geographical sense means Pakistan as defined in the Constitution of the Islamic Republic of Pakistan and includes any area outside the territorial waters of Pakistan which under the laws of Pakistan and international law is an area within which Pakistan exercises sovereign rights and exclusive jurisdiction with respect to the natural resources of the sea-bed and sub-soil and superjacent waters; (b) 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; (c) the terms “a Contracting State” and “the other Contracting State” mean Pakistan or Indonesia, as the context requires; (d) the term “tax” means Pakistani tax or Indonesian tax, as the context requires; (e) the term “person” includes an inpidual, a company and any other body of persons; (f) the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes; (g) 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; (h) the term “national” means all inpiduals having the nationality of a Contracting State and all legal persons, partnerships and other bodies of persons deriving their status as such from the law in force in a Contracting State; (i) 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; (j) the term “competent authority” means, in the case of Pakistan, the Central Board of Revenue or its authorised representative, in the case of Indonesia, the Minister of Finance or his authorised representative. As regards the application of this 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 the Contracting State concerning the taxes to which this Agreement applies. Article 4RESIDENT For the purpose of this Agreement, the term “resident of a Contracting State” means any person who, under the laws of that Contracting State, is liable to tax therein by reason of his domicile, residence, place of effective 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. 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 Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting 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 Contracting 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 Contracting States or in neither of them, the competent authorities of the 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 Contracting State in which the place of effective management of its business is situated. However, where the place of effective management of the business of such person cannot be determined, then the competent authorities of the Contracting States shall determine by mutual agreement the State of which the said person shall be deemed to be a resident for the purposes of this Agreement. Article 5PERMANENT ESTABLISHMENT For the purposes of this Agreement, the term “permanent establishment” means a