You are on page 1of 6

Question 1

Article 5 Paragraph (4) Tax Treaty Indonesia-Japan:
Notwithstanding the provisions of the preceding paragraphs, the term permanent
establishment shall be deemed not to include:
(a) the use facilities solely for the purpose of storage or display of goods or merchandise
belonging to the enterprise;
(b) the maintenance of a stock of goods or merchandise to the enterprise solely for the
purpose of storage or display;
(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for
the purpose of processing by another enterprise;
(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or
merchandise, or of collecting information, for the enterprise;
(e) the maintenance of a fixed place of business solely for the purpose of advertising, for the
supply of information, for scientific research or for similar activities which have a
preparatory or auxiliary character for the enterprise;
(f)
the maintenance of a fixed place of business solely for any combination of activities
mentioned in subparagraphs (a) to (e), provided that the overall activity of the fixed place
of business resulting from this combination is of a preparatory or auxiliary character.

Article 7 Paragraph (1) – (3) Tax Treaty Indonesia-Japan:
1

The profits of an enterprise of a Contracting State shall be taxable only in that
Contracting State unless the enterprise carries on business in the Contracting State
through a permanent establishment situated therein. If the enterprise carries on business
as aforesaid, the profits of the enterprise may be taxed in that other Contracting State but
only so much of them as is attributable, to that permanent establishment.

2

Subject to the provisions of paragraph 3, where an enterprise of a Contracting State
carries on business in the other Contracting State through a permanent establishment
situated therein, there shall in each Contracting State be attributed to that permanent
establishment the profits which it might be expected to make if it were a distinct and
separate enterprise engaged in the same or similar activities under the same or similar
conditions and dealing wholly independently with the enterprise of which it is a
permanent establishment.

but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed : (a) 10 per cent of the gross amount of the dividends if the beneficial owner is a company which owns at least 25 per cent of the voting shares of the company paying the dividends during the period of twelve months immediately before the end of the accounting period for which the distribution of profits takes place. Answer: . whether in the Contracting State in which the permanent establishment is situated or elsewhere.3 In determining the profits of a permanent establishment. shall be taxable only in Japan because the enterprise doesn’t carry on business in Indonesia through a permanent establishment situated therein. such dividends may also be taxed in that Contracting State of which the company paying the dividends is a resident. and according to the laws of that Contracting State. Question 2 Article 10 Paragraph (1) & (2) Tax Treaty Indonesia-Japan: 1 Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other Contracting State. Answer: Refer to Article 5 Paragrah (4) Tax Treaty Indonesia-Japan.. Ofiice A and Office B shall not be deemed as a Permanent Establishment of X. 2 However. Co. (b) 15 per cent of the gross amount of the dividends in all other cases. the profits of X.Co. The provisions of this paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. because it is dedicated to maintain and display of cars it produced and for research and development. Tax obligation: Refer to Article 7 Paragraph (1) & (3). including executive and general administrative expenses so incurred. there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment.

Fukuji shares since March 2009. Mr. Question 3 Article 14 Paragraph (1) & (2) Tax Treaty Indonesia-Japan: 1 Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that Contracting State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities or he is present in that other Contracting State for a period or periods exceeding in the aggregate 183 days in the calendar year concerned.000 x 10.00) = Rp41. artistic. 2011 tax obligation (there is Certificate of Domicile): Refer to Article 10 Paragraph (1) & (2) Tax Treaty Indonesia-Japan (Mr.000 x 5. *Mr. . 26 Indonesia Income Tax Act). Mr. Answer: Visiting days of Mr. lawyers. literary. engineer. Sakurata in Indonesia: 12 March – 30 May 2010 (first visit) & 16 August – 18 October 2010 (second visit) . the income may be taxed in that other Contracting State but only so much of it as is attributable to that fixed base or is derived in that other Contracting State during the aforesaid period or periods. educational or teaching activities as well as the independent activities of physicians. Fukuji (See Art.00. independent scientific.00. b. 2 The term professional services includes.000 or 44%. Fukuji = *15% x (55.- Mr. If he has such a fixed base or remains in that other Contracting State for the aforesaid period or periods. Fukuji = 20% x (55.00) = Rp110.000 shares).March 2010 (12 March – 31 March) = 20 days. Fukuji shares is 22% (less than 25%) PT Kaya Raya should withhold this tax obligation from Mr. Fukuji shares in 2010 is 22% (55. PT Kaya Raya should withhold this tax obligation from Mr. Fukuji shares in 2011 is 22% (55.000 shares). .April 2010 (1 April – 30 April) = 30 days. 26 Indonesia Income Tax Act). architects. Fukuji couldn’t provide his Certificate of Domiclie to Indonesian Tax Authority): Tax obligation of Mr. 2010 tax obligation (there is no Certificate of Domicile): Refer to Artice 26 Paragraph (1) Indonesia Income Tax Law (because Mr.250.000 shares). dentists and accountants. Fukuji could provide his Certificate of Domiclie to Indonesian Tax Authority): Tax obligation of Mr. a.000 shares) or 22% (55. Fukuji (See Art. Mr. especially.000. Fukuji shares on February 2008 is 110. Fukuji shares on March 2009 is 50% x 44% (110. There is no change of Mr.000/250.

30 May) . the right to tax the income received by Mr.August 2010 (16 August – 31 August) . Article 11 Paragraph (5) & (6) Tax Treaty Indonesia-Singapore: 5.. (cc) Telecomunication Authority of Singapore. There is no tax obligation in Indonesia. because Mr. 18 days. (iii) (aa) Port of Singapore Authority. remuneration derived in respect of an employment exercise aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State shall be taxable only in that State. 144 days The right to tax the income received by Mr. the term Government: (a) in the case of Singapore means the Government of Singapore and shall include: (i) the Monetary Authority of Singapore and the Board of Comissioners of Currency. not exceeding 183 days as of Article 14 Par. (ii) the Government of Singapore Investment Corporation Pte Ltd..September 2010 (1 September – 30 September) . public body or institution as may be agreed between the competent authorities of the Contracting States. 30 days. Question 4 Article 14 Paragraph (3) Tax Treaty Indonesia-Singapore: Nothwithstanding the provisions of paragraph 1 and 2.May 2010 (1 May . (bb) Public Utilities Board. (1) Tax Treaty Indonesia-Japan. and (iv) any statutory body. . Sakurata is Japan. Sakurata: Refer to Artice 14 Paragraph (1) & (2) Tax Treaty Indonesia-Japan. the Government of a Contracting State shall be exempt from tax in the other Contracting State in respect of interest derived from that other State. For the purposes of paragraph 5. Sakurata is present in Indonesia only 144 days. Notwithstanding the provisions of paragraph 2 and 3. 6.. 16 days. .October 2010 (1 October – 18 October) Total = = = = = 30 days.

Article 5 Paragraph (4) Tax Treaty Indonesia-Singapore: An enterprise of a Contracting State shall be deemed to have a permanent establishment in the other Contracting State if it carries on supervisory activities in that other State for more than 6 months in connection with a construction. Installation or assembly project which is being undertaken in that other State. (b) The taxing right prevails of interest: Refer to Article 11 Paragraph (5) & (6) Tax Treaty Indonesia-Singapore. in the first-mentioned State a general authority to conclude contracts of or on behalf of the enterprise.Answer: (a) The taxing right prevails of Paijo’s remuneration: Refer Article 14 Paragraph (3) Tax Treaty Indonesia-Singapore. the taxing right prevails of Paijo’s remuneration is Singapore because remuneration derived in respect of an employment exercise aboard a ship aircraft operated in international traffic by an Singapore enterprise. installation or assembly project which exists for more than 183 days. the taxing right prevails of interest is Singapore because interest paid by Government of Indonesia and provider of the loan is Port of Singapore Authority. unless his activities are limited to the purchase of goods or merchandise for the enterprise. one of terms included Government of Singapore. Question 5 Article 5 Paragraph (2) letter h Tax Treaty Indonesia-Singapore: The term permanent establishment shall include especially a building site of construction. Article 5 Paragraph (5) letter a Tax Treaty Indonesia-Singapore: A person acting in one of the Contracting State for or on behalf of an enterprise of the other Contracting State other than an agent of an independent status to whom paragraph 6 of this Article applies-shall be deemed to be a permanent establishment in the first-mentioned State. . if he has. and habitually execises.

. (b) Refer to Article 5 Paragraph (4) Tax Treaty Indonesia-Singapore. (c) Refer to Article 5 Paragraph (5) letter a Tax Treaty Indonesia-Singapore. supervisory activities in connection with a construction. installation or assembly project shall not be deemed as a Permanent Establishment because that activities not more than 6 months is being undertaken in that other State. the installation or assembly project shall be deemed as a Permanent Establishment because the existing of installation or assembly project for more than 183 days. the activities shall not be deemed as a Permanent Establishment because the activities are limited to the purchase of goods or merchandise for the enterprise.Answers: (a) The existing of installation or assembly project is 6 March – 20 September 2010: March 26 days April 30 days May 31 days June 30 days July 31 days August 31 days September 20 days Total 199 days Refer to Article 5 Paragraph (2) letter h Tax Treaty Indonesia-Singapore.