International Tax Law

Principles

By Christine,SE.Ak.,M.Int.Tax ©
 Agenda
Concept of International Tax
Juridical double taxation
Economic double taxation
World wide income vs territorial income
Conflict-conflict under international tax law
 Pengertian Perpajakan
Internasional
Ketentuan-ketentuan yang mengandung aspek-
aspek internasional yang terkandung di dalam UU
pajak penghasilan suatu negara.

Di Indonesia, pajak internasional adalah aspek

internasional yang ada di dalam UU PPh.
 International Tax System
(Prof. Bird (1988))
Residents taxed on worldwide income (residence
principle) and non-residents taxed on domestic
income (source principle)
Source country has primary right to tax active
income (business profits)
Residence country has primary right to tax
passive income (source country accepts rate
limits)
 International Tax System
(Prof. Bird (1988))
Residence country taxation of profits of foreign
subsidiary deferred until repatriation to parent
company
Residence country provides relief from double
taxation
Allocation of income between jurisdictions based
on the arm’s length principle
Jurisdiction to tax under international tax law

Residence jurisdiction Residence Country

Source jurisdiction Source country

 Dimensi Perpajakan Internasional

Taxation of foreign income

yaitu pengenaan pajak atas penghasilan yang berasal
dari luar negeri yang diperoleh penduduk (residents) baik
orang pribadi maupun badan.

Taxation of nonresidents
yaitu pengenaan pajak atas penghasilan yang diperoleh
orang asing (foreigners) yang berasal dari dalam negeri.
Pemajakan Resident vs Non resident

WP Dalam Negeri (resident) WW Income Penghasilan

DN
DN
LN
Penghasilan
LN

Source-based income

DN
LN
Hanya dikenakan pajak
WP LN Negeri (non resident) dari penghasilan yang bersumber di
Negara pemberi penghasilan
Why Double Taxation occur?
Please discuss.
 Why Double Taxation occur?
1. Meningkatnya transaksi internasional
- Globalisasi
- e-commerce
2. Kedaulatan Negara untuk mengenakan pajak (Sovereignty to tax)
yang menimbulkan konflik.
Karakteristik konflik penyebab double taxation:
- Resident-Source conflict the most common
- Resident-Resident conflict (dual resident)
- Source-source conflict (dual source)
- etc.
 Juridical Double Taxation

Definisi:
Pengenaan pajak oleh dua atau lebih negara
dari WP yang sama
atas income yang sama
dalam periode yang sama (same taxable
period)
 Negara S Negara sumber
 Mengenakan pajak atas penghasilan bunga 
Perusahaan X territorial income
 Dimensi: Taxing the foreigner’s income
 Mekanisme pengenaan pajak: withholding tax yang
Loan dilakukan oleh perusahaan X
Interest
$ Negara S

Negara D

Negara D  Negara domisili

 Mengenakan pajak atas penghasilan bunga 
worldwide income
 Dimensi Taxing the foreign income
Mr Y
 Mekanisme pengenaan pajak: dengan self
assessment system, dilakukan oleh Mr. Y sendiri
 Economic Double Taxation

Definisi:

Pengenaan pajak beberapa kali (multiple

taxation)
terhadap income yang sama
Terhadap WP yang berbeda
Dalam periode yang sama
  Mengenakan pajak atas laba usaha
Subsidiary Subsidiary Co.
Co.

$ Negara A

Negara B
Dividen
 Mengenakan pajak atas penghasilan dividen
yang berasal dari laba usaha Subsidiary Co.

Parent Co.
(shareholder)
 Residence-source conflict

PT A Worldwide income

Residence country

Source country

Domestic source income

Tax at source
 Source-source conflict
 Example: Design Fee  related to source rules

Negara B
Negara A Source country (1)
Residence Country tempat desain dibuat

Negara C
Source country (2)
Tempat desain dibangun
Residence-residence conflict

 Place of incorporation
Country A

 Place of effective management

Country B
 Income Characterization/Qualification
conflict

Given the same facts, the residence and source country

would apply different articles of the Convention on the basis
of differences in their domestic law.

Ex: Pierre Boulez Case

 Conflict of interpretation of tax treaty
provisions

Contracting States agree on all the facts of the

particular case, but disagree on how the provision of the
Convention should be applied to them.
 Measurement/Allocation Conflict

 Measurement of income
 Related to transfer pricing method

 Compensating Adj. (Art. 9)

 Mutual Agreement Procedure (Art. 25)