Slovakia - Indonesia Tax Treaty

A G R E E M E N T BETWEEN

THE GOVERNMENT OF THE SLOVAK REPUBLIC 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 THE SLOVAK REPUBLIC AND

THE GOVERNMENT OF THE REPUBLIC OF INDONESIA

DESIRING to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,

HAVE AGREED as follows:

Article 1 Personal scope

This Agreement shall apply to persons who are residents of one or
both of the Contracting States.

Article 2 Taxes covered

 This  Agreement  shall  apply  to  taxes  on  income  imposed  on

behalf of each Contracting State or of its political subdivisions 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 or immovable property.

 The existing taxes to which the Agreement shall apply are:

a) in Slovakia:

(i) the tax on income of individuals;

(ii) the tax on income of legal persons; (hereinafter referred to as "Slovak tax");

b) in 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").

 The  Agreement  shall  apply also  to  any identical  or  substantially

similar taxes which are imposed after the date of signature of the Agreement 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 in their respective taxation laws.

Article 3 General definitions

 For the purposes of this Agreement, unless the context otherwise

requires:

a) the term "Slovakia" means the Slovak Republic and when used
in a geographical sense means the territory over which the Slovak Republic exercises its sovereign rights or jurisdiction in accordance
with international law;

b) the term "Indonesia" means the territory of the Republic of
Indonesia as defined in its laws, and the adjacent seas over which the Republic
of Indonesia exercises its sovereignty, sovereign rights or jurisdiction in accordance with international law;

c) the terms "a Contracting State" and "the other Contracting
State" mean Slovakia or Indonesia as the context requires;

d) the term "person" includes an individual, a company and any other body of persons;

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 which is a resident 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 the case of Slovakia, the Minister of Finance or his
authorized representative;

(ii) in the case of Indonesia, the Minister of Finance or his
authorized representative;

i) the term "national" means:

(i) any individual possessing the nationality of a Contracting State;

(ii) any legal person, partnership and association deriving its
status as such from the laws in force in a Contracting State.

 As regards the application of the Agreement at any time by a

Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning which it has at that time under the law of that State for the purposes of the taxes to which the Agreement applies, any meaning under the applicable tax laws of that State prevailing over meaning given to the term under other laws of that State.

Article 4 Resident

 For  the  purpose  of  this  Agreement,  the  term  "resident  of  a

Contracting State" means 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. The 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 individual 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 Contracting States shall settle the question by mutual agreement.

 Where  by  reason  of  the  provisions  of  paragraph  1  a  person

other than an individual is a resident of both Contracting States, the competent authorities of the States shall settle the question by mutual agreement.

Article 5 Permanent establishment

 For the purposes of this Agreement, the term "permanent establishment"

means a fixed place of business through which the business of an
enterprise of a Contracting State is wholly or partly carried on in the other Contracting State.

 The term "permanent establishment" includes especially:

a) a place of management;

b) a branch;

c) an office;

d) a factory;

e) a workshop;

f) a warehouse or premises used as sales outlet;

g) a farm or plantation;

h) a mine, an oil or gas well, a quarry or any other place of extraction or exploration or exploitation of natural resources, drilling rig or
working ship.

 The term "permanent establishment" likewise encompasses:

a) a building site, a construction, assembly or installation project or supervisory activities in connection therewith, but only where such
site, project or activities continue for a period of more than six months;

b) the furnishing of services, including consultancy and managerial services, by an enterprise through employees or other personnel engaged by the enterprise of a Contracting State for such purpose, but only
where activities of that nature continue within the other State for a
period or periods aggregating more than 91 days within any twelve month period.

 Notwithstanding  the  preceding provisions  of  this  Article,  the

term "permanent establishment" shall be deemed not to include:

a) the use of 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 belonging
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, or for the supply of information;

f) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the enterprise, any other activity of a preparatory
or auxiliary character;

g) the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs a) to f), provided that the
overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

 Notwithstanding the  provisions  of  paragraphs  1  and  2,  where a

person - other than an agent of an independent status to whom paragraph 6 applies - is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the
first- mentioned State in respect of any activities which that person undertakes for the enterprise, if such a person:

a) has, and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph; or

b) has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise; or

c) manufactures or processes in that State for the
enterprise goods or merchandise belonging to the enterprise.

 An enterprise of a Contracting State shall not be deemed to have a

permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.

 The fact that a company which is a resident of a Contracting State

controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a
permanent establishment or otherwise), shall not of itself constitute either
company a permanent establishment of the other.

Article 6

Income from immovable property

 Income derived by a resident of a Contracting State from immovable

property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

 The term "immovable property" shall have the meaning which it has under

the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable
property, livestock and equipment used in agriculture and forestry, rights to
which the provisions of general law respecting landed property apply,
usufruct of

immovable propery and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other
natural resources; ships and aircraft shall not be regarded as immovable property.

 The provisions of paragraph 1 shall apply also to income derived from

the direct use, letting, or use in any other form of immovable property.

 The  provisions  of  paragraphs  1  and  3  shall  also  apply  to  the

income from immovable property of an enterprise and to income from immovable
property used for the performance of independent personal services.

Article 7 Business profits

 The profits of an enterprise of a Contracting State shall be   taxable

only in that State unless the enterprise carries on business in the other
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 the other State but only so much of them as is attributable to:

a) that permanent establishment;

b) sales in that other State of goods or merchandise of the
same or similar kind as those sold through that permanent establishment; or

c) other business activities carried on in that other State of the same or similar kind as those effected through that permanent establisment.

 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.

 In determining the profits of a permanent establishment, there shall be

allowed as deductions expenses which are incurred for the purposes of the
permanent establishment, including executive and general administrative
expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.

 For the purposes of the preceding paragraphs, the profits to  be

attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

 Where profits include items of income which are dealt with separately

in other Articles of this Agreement, then the provisions of those Articles
shall not be affected by the provisions of this Article.

 Insofar as it has been customary in a Contracting State to determine

the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary. The method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.

 No profits shall be attributed to a permanent establishment by reason

of the mere purchase by that permanent establishment of goods or merchandise for
the enterprise.

Article 8 Shipping and air transport

 Profits  from  the  operation  of  ships  or  aircraft  in

international traffic shall be taxable only in the Contracting State of which the enterprise operating the ships or aircraft is a resident.

 For the purposes of this Article, profits from the operation of ships

and aircraft in international traffic include profits from the rental on a bareboat basis of ships and aircraft when used in international traffic, where profits from such rental are incidental to the profits referred to in paragraph 1.

 The provision of paragraph 1 shall also apply to profits from the

participation in a pool, a joint business or an international operating agency.

Article 9 Associated enterprises

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 Where
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a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other
Contracting State, or

b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,

and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would,
but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

 Where a Contracting State includes in the profits of an enterprise of

that State - and taxes accordingly - profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State
shall make an appropriate adjustment to the amount of the tax charged
therein on those profits. In determining such adjustment, due regard shall be
had to the other provisions of this Agreement and the competent
authorities of the Contracting States shall, if necessary consult each other.

 The provisions of paragraph 2 shall not apply in the case of fraud.

 A  Contracting  State  shall  not  change  the  profits  of  an

enterprise in the circumstances referred to in paragraph 2 after the expiry of the
time limits provided in its tax laws.

Article 10 Dividends

 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 State.

 However,  if  the  beneficial  owner  of  the  dividends  is  a

resident of the other Contracting State, the tax charged by the first-mentioned State may not exceed 10 per cent of the gross amount of the dividends actually distributed.

 The term  "dividends" as used in this Article means income   from all

kinds of shares, or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same
taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident.

 The provisions of paragraphs 1 and 2 shall not apply if the  beneficial

owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in
that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent etablishment or fixed base. In such case the
provisions of Article 7 or Article 14, as the case may be, shall apply.

 Notwithstanding  any  other  provisions  of  this  Agreement  where

a company which is a resident of a Contracting State has a permanent establishment in the other Contracting State, the profits of the permanent establishment
may be subjected to an additional tax in that other State in accordance with its law, but the additional tax so charged shall not exceed, 10 per cent of the amount of such profits after deducting therefrom income tax imposed on income in
that other State.

 The  provision  of  paragraph  5  of  this  Article  shall  not  affect

the provisions contained in any production sharing contracts (or any other similar
contracts) relating to oil and gas sector or other mining sector.

Article 11 Interest

 Interest  arising  in  a  Contracting  State  and  paid  to  a

resident of the other Contracting State may be taxed in that other State.

 However, such interest may also be taxed in the Contracting State in

which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest.

 Notwithstanding the provisions of paragraph 2, interest arising in a

Contracting State and derived by the Government of the other Contracting State
including local authorities thereof, a political subdivision, the Central Bank
or any financial institution controlled by that Government, the capital of
which is wholly owned by the Government of the other Contracting State, as
may be agreed upon between the Governments of the Contracting States, shall
be exempt from tax in the first-mentioned State.

 The  term  "interest"  as  used  in  this  Article  means  income  from

debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular,
income from government securities and income from bonds or debentures,
including premiums and prizes attaching to such securities, bonds or debentures, as well as income assimilated to income from money lent under the taxation law
of the States in which the income arises. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.

 The provisions of paragraphs 1 and 2 shall not apply if the beneficial

owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a
permanent establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and the
debt-claim in respect of which the interest is paid is effectively connected with

a) such permanent establishment or fixed base, or with

b) business activities reffered to under c) of paragraph 1 of Article 7.

In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

 Interest shall be deemed to arise in a Contracting State when the payer

is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a
resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

 Where, by reason of a special relationship between the payer and the

beneficial owner or between both of them and some other person, the amount of
the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments
shall

remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

Article 12 Royalties

 Royalties  arising  in  a  Contracting  State  and  paid  to  a

resident of the other Contracting State may be taxed in that other Contracting State.

 However,  such  royalties  may  also  be  taxed  in  the  Contracting

State in which they arise and according to the laws of that State, but if the
recipient is the beneficial owner of the royalties the tax so charged shall not exceed 15 per cent of the gross amount of royalties described in paragraph 3 (a), 3 (b), 3 (c) and 3

(d) and 10 per cent of the gross amount of royalties described in paragraph 3 (e) and 3 (f).

 The term "royalties" as used in this Article means payments, whether

periodical or not, and in whatever form or name or nomenclature to the extent to which they are made as consideration for :

a) the use of, or the right to use, any copyright, patent,
software, design or model, plan, secret formula or process, trademark or other like property or right; or

b) the use of, or the right to use, any industrial, commercial
or scientific equipment; or

c) the supply of scientific, technical, industrial or commercial knowledge or information; or

d) the supply of any assistance that is ancillary and subsidiary to any such property or right as is mentioned in subparagraph (a), any such equipment as is mentioned in sub-paragraph (b) or any such knowledge or information as is mentioned in sub-paragraph (c); or

e) the use of, or the right to use any copyright of:

(i) motion picture films; or

(ii) films or video for use in connection with television; or

(iii) tapes for use in connection with radio broadcasting; or

f) total or partial forbearance in respect of the use or supply or any property or right referred to in this paragraph.

 The provisions of paragraph 1 and 2 shall not apply if the beneficial

owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through
a permanent establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with

a) such permanent establishment or fixed base, or with

b) business activities reffered to under c) of paragraph 1 of Article 7.

In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

 Royalties shall be deemed to arise in a Concracting State when the

payer is that State itself,a local authority or a resident of that State. Where,
however, the person paying the royalties, whether he is a resident of a Concracting State or not, has in a Concracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base,
then such royalties shall be deemed to arise in the State in which
the permanent establishment or fixed base is situated.

 Where, by reason of a special relationship between the payer and the

beneficial owner or between both of them and some other person, the amount of
the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions
of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of
each Contracting State, due regard being had to the other
provisions of this Agreement.

Article 13 Capital gains

 Gains  derived  by  a  resident  of  a  Contracting  State  from  the

alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.

 Gains  from  the  alienation  of  movable  property  forming  part  of

the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including
such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State.

 Gains  derived  by  an  enterprise  of  a  Contracting  State  from

the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.

 Gains  from  the  alienation  of  any  property  other  than  that

referred to in paragraphs 1, 2 and 3, shall be taxable only in the Contracting State of which the alienator is a resident.

Article 14 Independent personal services

 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 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 State for a period or periods exceeding in the aggregate 91 days in a fiscal year.

If he has such a fixed base or remains in that other State for the aforesaid period or periods, the income may be taxed in that other State but only so much of it as is attributable to that fixed base or is derived in that other
State during the aforesaid period or periods.

 The  term  "professional  services"  includes  especially  independent

scientific, literary, artistic, educational or teaching activities as well as the
independent activities of physicians, engineers, lawyers, dentists, architects, and accountants.

Article 15 Dependent personal services

 Subject to the provisions of Articles 16, 18, 19 and 20, salaries,

wages and other similar remuneration derived by a resident of a Contracting State in respect of an

employment shall be taxable only in that State unless the employment
is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

 Notwithstanding  the  provisions  of  paragraph  1,  remuneration

derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if :

a) the recipient is present in the other State for a period or
periods not exceeding in the aggregate 183 days within any twelve-month period, and

b) the remuneration is paid by, or on behalf of, an employer
who is not a resident of the other State, and

c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

 Notwithstanding the preceding provisions of this Article, remuneration

derived in respect of an employment exercised aboard a ship or aircraft
operated in international traffic by an enterprise of a Contracting State shall be taxable only in that State.

Article 16 Directors' fees

 Directors' fees and other similar payments derived by a resident of a

Contracting State in his capacity as a member of the board of directors or any other similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.

 The remuneration which a person to whom paragraph 1 applies derived

from the company in respect of the discharge of day-to-day functions of a managerial or technical nature may be taxed in accordance with the provisions of Article 15.

Article 17 Artistes and sportsmen

 Notwithstanding  the  provisions  of  Articles  14  and  15,  income

derived by a resident of a Contracting State as an entertainer, such as a
theatre, motion

picture, radio or television artiste, or a musician, or as a
sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.

 Where income in respect of personal activities exercised by an

entertainer or a sportsman in his capacity as such accrues not to the entertainer or
sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised.

 Notwithstanding  the  provisions  of  paragraphs  1  and  2,  income

derived from activities reffered to in paragraph 1 performed under a cultural
agreement or arrangement between the Contracting States shall be exempt from tax
in the Contracting State in which the activities are exercised if the visit to that State is wholly or substantially supported by funds of one or both of the
Contracting States, a local authority or public institution thereof.

Article 18 Pensions and annuities

 Subject to the provisions of paragraph 2 of Article 19, any pensions

and other similar remuneration paid to a resident of one of the Contracting States from a source in the other Contracting State in consideration of past
employment or services in that other Contracting State and any annuity paid to such a resident from such a source may be taxed in that other State.

 The  term  "annuity"  means  a  stated  sum  payable  periodically  at

stated times during life or during a specified or ascertainable period of time
under an obligation to make the payments in return for adequate and full consideration in money or money's worth.

Article 19 Government service

 a)      Remuneration,  other  than  a  pension,  paid  by  a

Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall
be taxable only in that State.

b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who:

(i) is a national of that State; or

(ii) did not become a resident of that State solely for the
purpose of rendering the services.

 a)      Any pension paid by, or out of funds created by, a Contracting

State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall
be taxable only in that State.

b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other State.

 The provisions of Articles 15, 16, 17 and 18 shall apply to

remunerations and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.

Article 20 Teachers and researchers

 An individual who is immediately before visiting a Contracting State a

resident of the other Contracting State and who, at the invitation of the Government of the first-mentioned Contracting State or of a University,
college, school, museum or other cultural institution in that first mentioned Contracting State or under an official programme of cultural exchange, is present in that
Contracting State for a period not exceeding two consecutive years solely for the purpose of teaching, giving lectures or carrying out research at such institution shall be exempt from tax in that Contracting State on his remuneration for such activity, provided that payment of such remuneration is derived by him from outside that Contracting State.

 The  provision  of  paragraph  1  shall  not  apply to  income  from

research if such research is undertaken not in the public interest but primarily for
the private benefit of a specific person or persons.

Article 21 Students and trainees

 Payments which a student or business trainee who is or was immediately

before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned Contracting State solely for the
purpose of his education or training received for the purpose of his maintenance, education or training shall not be taxed in that Contracting State, provided that such payments arise from sources outside that Contracting State.

 In  respect  of  grants,  scholarships  and  remuneration  from

employment not covered by paragraph 1, a student or business trainee described in paragraph 1 shall, in addition, be entitled during such education or training to
the same exemption, reliefs or reductions in respect of taxes available to residents of the Contracting State which he is visiting.

Article 22 Other income

 Items of income of a resident of a Contracting State, wherever arising,

not dealt with on the foregoing Articles of this Agreement except income in the form of winning of lotteries, prizes and insurance or reinsurance premium
shall be taxable in the first mentioned State.

 The provisions  of  paragraph  1  of  this  Article  shall  not  apply

to income, other than income from immovable property as defined in paragraph 2 of Article 6 of this Agreement, if the recipient of such income, being the resident
of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that
other State independent personal service from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case, the
provisions of Article 7 or Article 14, as the case may be, shall apply.

Article 23 Elimination of double taxation

 Double taxation shall be eliminated as follows:

a) in case of Slovakia :

Slovakia, when imposing taxes on its residents, may include in the tax base upon which such taxes are imposed the items of income which according to the provisions of this Agreement may also be taxed in Indonesia,
but shall allow as a deduction from the amount of tax computed on such a base an amount equal to the tax paid in Indonesia. Such deduction shall
not, however, exceed that part of the Slovak tax, as computed before the deduction is given, which is appropriate to the income which, in accordance with the provisions of this Agreement, may be taxed in Indonesia;

b) in case of Indonesia :

Where a resident of Indonesia derives income which, in accordance with the provisions of this Agreement, may be taxed in Slovakia, Indonesia shall, subject to the provisions of its domestic tax laws, allow as
a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Slovakia. Such deduction shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable, as the case may be, to the income which may be taxed in Indonesia.

Where in accordance with any provision of the Agreement income derived

by a resident of a Contracting State is exempt from tax in that State, such State may nevertheless, in calculating the amount of tax on the remaining income of such person, take into account the exempted income.

Article 24 Non-discrimination

 Nationals of a Contracting State shall not be subjected in the other

Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected.

 The taxation on a permanent establishment which an enterprise of a

Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting
State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.

 Enterprises of a Contracting State, the capital of which is wholly or

partly owned or controlled, directly or indirectly, by one or more residents of
the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or
more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected.

 Except where the provisions of paragraph 1 of Article 9, paragraph 7 of

Article 11, or paragraph 6 of Article 12, apply, interest, royalties
and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first mentioned State.

 In  this  Article  the  term  "taxation"  means  taxes  which  are

subject of this Agreement.

Article 25

Mutual agreement procedure

 Where  a  person  considers  that  the  actions  of  one  or  both  of

the Contracting States result or will result for him in taxation not in accordance
with the provisions of this Agreement, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case
comes under paragraph 1 of Article 24, to that of the Contracting State of
which he is a national. The case must be presented within three years from
the first notification of the action resulting in taxation not in accordance
with the provisions of the Agreement.

 The  competent  authority  shall  endeavour,  if  the  objection

appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the
other Contracting State, with a view to the avoidance of taxation which is not in accordance with this Agreement.

Any agreement reached shall be implemented within the time limits in
the domestic law of the Contracting States.

 The competent authorities of the Contracting States shall endeavour to

resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement.

 The competent authorities of the Contracting States may communicate

with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. The competent authorities, through consultation,
shall develop appropriate bilateral procedures, conditions, methods and techniques for the implementation of the mutual agreement procedure provided for in
this Article.

Article 26 Exchange of information

 The   competent   authorities   of   the   Contracting   States   shall

exchange such information as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement, insofar as the taxation thereunder is not contrary to this Agreement, in particular for the prevention of fraud or evasion of such taxes. The exchange of information is not restricted by Article 1. Any information
received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies)
concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes
covered by the Agreement. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.

 In no case shall the provisions of paragraph 1 be construed so as to

impose on a Contracting State the obligation:

a) to carry out administrative measures at variance with the
laws and administrative practice of that or of the other Contracting State;

b) to supply information which is not obtainable under the laws
or in the normal course of the administration of that or of the other
Contracting State;

c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public).

Article 27

Members of diplomatic missions and consular posts

Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions and consular posts under the general rules of international law or under the provisions of special agreements.

Article 28 Entry into force

 This  Agreement  shall  enter  into  force  on  the  later  of  the

dates on which the respective Governments may notify each other in writing that the
formalities constitutionally required in their respective States have been complied with.

```
 This Agreement shall have effect:
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a) in respect of tax withheld at source, to income derived on
or after 1 January in the year next following that in which the Agreement enters into force; and

b) in respect of other taxes on income for taxable years beginning on or after the 1 January in the year next following that in which the Agreement enters into force.

Article 29 Termination

This Agreement shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Agreement, through diplomatic
channels, by giving written notice of termination on or before the thirtieth day
of June of any calendar year following after the period of five years from the year in which the Agreement enters into force.

In such case, the Agreement shall cease to have effect:

a) in respect of the tax withheld at source to income derived
on or after 1 January in year next following that in which the notice of termination is given;

b) in respect of other taxes on income, for taxable years beginning on or after 1 January in year next following that in which the notice of termination is given.

IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this Agreement.

DONE in duplicate at Djakarta, this 12 day of October 2000in the Slovak, Indonesian and English languages, the three texts being equally authentic. In
case there is any divergence of interpretation between the Slovak and Indonesian texts, the English text shall prevail.

For the Government For the Government

of the Slovak Republic: of the Republic of Indonesia:

P R O T O C O L

The Government of the Slovak Republic and the Government of the
Republic of Indonesia

at the moment of signing the Agreement between the Government of the Slovak Republic 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 undersigned have agreed that the following provisions shall form an integral part of the Agreement:

Ad paragraph 2 f) of Article 5:

It is understood that the term "permanent establishment" does not include a stock in consignment.

IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this Protocol.

DONE in duplicate at Djakarta, this 12 day of October 2000, in the
Slovak, Indonesian and English languages, the three texts being equally
authentic. In case there is any divergence of interpretation between the Slovak and Indonesian texts, the English text shall prevail.

For the Government For the Government

of the Slovak Republic: of the Republic of Indonesia:

Slovakia - Indonesia Tax Treaty

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