DT9653 | Double Taxation Relief Manual: Indonesia: notes

Permanent establishments – additional tax on profits (Article 10(7))

Indonesia may under the agreement charge an additional tax of up to 10% on the profits attributable to an Indonesian permanent establishment of a UK company.

Students

Visiting students or technical apprentices from Indonesia are exempt from UK tax on payments from Indonesia for the purpose of their maintenance, education or training.

Individuals visiting the UK from Indonesia for the purpose of acquiring technical, professional or business experience for up to 12 months as an employee of the Indonesian government or an Indonesian enterprise are exempt from UK tax on payments from Indonesia for the purpose of their maintenance, education or training. This exemption does not apply where the experience is acquired from a company controlled by the Indonesian entity that sent the employee to the UK.

Tax spared (Article 21(3))

The agreement provides for credit to be given for tax `spared’ (see INTM161270 & 161280) in Indonesia under the provisions of Indonesian laws set out in Article 21(3).

Relief is limited to tax spared’ in Indonesia for a period of ten years in respect of any one source of income.

Amounts of tax spared for which credit relief is given should be reported as mentioned in INTM161290.