DOUBLE TAX CONVENTION (DTC) PROTOCOL

INDONESIA - NETHERLANDS

Jakarta, 31 May 2018

Subdirektorat Perjanjian dan Kerja Sama Perpajakan Internasional

Direktorat Perpajakan Internasional
OUTLINE
Indonesia’s Treaty Partners

Investment in Indonesia

Indonesia – Netherland DTC

DTC Protocol (2015)

DTC Implementation (PER-10)

Closed Fund for Mutual Account (CFMA)

1. Indonesia’s Treaty Partners
1. Afrika Selatan 24. Kanada 47. Seychelles
2. Aljazair 25. Korea Selatan 48. Singapura
3. Amerika Serikat 26. Korea Utara 49. Slovakia
4. Armenia 27. Kroasia 50. Spanyol
5. Australia 28. Kuwait 51. Sri Lanka
6. Austria 29. Laos 52. Sudan
7. Bangladesh 30. Luxembourg 53. Suriname
8. Belanda 31. Malaysia 54. Swedia
9. Belgia 32. Maroko 55. Swiss
10. Brunei Darussalam 33. Meksiko 56. Syria
11. Bulgaria 34. Mesir 57. Taiwan
12. Czech 35. Mongolia 58. Thailand
13. Denmark 36. Norwegia 59. Tiongkok
14. Filipina 37. Pakistan 60. Tunisia
15. Finlandia 38. Papua Nugini 61. Turki
16. Hong Kong 39. Perancis 62. Ukraina
17. Hongaria 40. Polandia 63. Uni Emirat Arab
18. India 41. Portugal 64. Uzbekistan
19. Inggris 42. Qatar 65. Venezuela
20. Iran 43. Romania 66. Vietnam
21. Italia 44. Rusia 67. Yordania
22. Jepang 45. Saudi Arabia
23. Jerman 46. Selandia Baru
 2. Investment into Indonesia –
Realisation 2016-2017
Jan s.d. Des 2016 Jan s.d. Des 2017

Source:
• http://www.bkpm.go.id/images/uploads/investasi_indonesia/file/Bahan_Paparan_TW_IV_2016.pdf
• http://www.bkpm.go.id/images/uploads/file_siaran_pers/Paparan_Indonesia_TW_IV_-_2017_Kepala.pdf
 3. INDONESIA – NETHERLANDS DTC
T
E
R Keppres 92/2003
Effective from
M 1 January 2004
1991 I 2015
• Indonesia – • Protocol • Indonesia –
Netherlands • Protocol N Netherlands • Protocol
DTC A DTC

1973 1993 T 2002

I
O
N
SE-03/PJ.1012/2000
Effective from 1 January 2001

6 March 2017
14 June 2017 1 August 2017
30 July 2015 Indonesia 1 October 2017
Diplomatic Note
Protocol Signing Ratification Entry into Force Effective Date
Exchange
(Perpres 24/2017)
 3. INDONESIA – NETHERLANDS DTC
Permanent • Construction, Installation, etc, 6 Months
Establishment • Furnishing of Services, 3 Months

Branch Profit Tax • 10%

Dividend • 10%

• 10%
• Interest paid on loan made for a period of more than 2 years or is paid in
Interest connection with the sale on credit of any industrial, commercial or scientific
equipment (Art. 11 para. 4) shall be taxable only in the resident State

Royalty • 10%
4. DTC PROTOCOL 2015 (Main Provisions)
1 •Dividend

2 •Interest

3 •Elimination of Double Taxation

4 •Exchange of Information

5 •Other Information on Exchange of Information

6 •Assistance in the Collection of Taxes

7 •Beneficial Owner Interpretation

8 •Mode of Application for Art.10,11,12

9 •Entry into Force

New provision
Ammendment
 DIVIDEND AND INTEREST

Income DTC Protocol

Dividend (Art. 10 para. 2) 10% a) 5% (directly own min 25%)
b) 10% (pension fund)
c) 15% (other)
Interest paid on loan made for a Shall be taxable only in 5%
period of more than 2 years or is resident country
paid in connection with the sale on
credit of any industrial, commercial
or scientific equipment (Art. 11
para. 4)
 DIVIDEND AND INTEREST
KETENTUAN
DTC LAMA
Art. 24 para 3
Where a resident of the Netherlands derives
items of income which according to…
Paragraph 1 of Article 16…, the Netherlands
shall exempt such items of income by allowing
a reduction of its tax…
PROTOCOL
…Paragraph 1 and 3 of Article 16
…remuneration derived by a resident of one of
the two States in respect of an employment
exercises aboard a ship or aircraft operated in
international traffic may be taxed in the State of
which the enterprise is a resident.
Art. 24 para 4
Further, the Netherland shall allow a deduction
from the Netherlands tax so computed for the
items of income which according to…
paragraph 2 of Article 11…
…paragraph 2 and 4 of Article 11…
...interest arising in one of the two States shall
be taxable only in the other State if the
beneficial owner of the interest is a resident of
the other State and if the interest is paid on a
load made for a period of more than 2 years or
is paid in connection with the sale on credit of
any industrial, commercial or scientific
equipment,...
 OTHER PROVISIONS

Exchange of • based on OECD Model

Information • also covers income-related regulations

Assistance in • the two States shall lend assistance to each other in

Collection of Taxes the collection of revenue claims

• interpretation based on current OECD Model

Beneficial Owner Convention and its subsequent modification

Mode of • There is no mode of application for Art 10, 11, and 12

Application
 5. DTC Implementation (PER-10)
START
DGT-1 (3 pages) DGT-2 (2 pages)

No
Resident of DTC
Partner

Yes
Refund
Administrative No
& Specific No Treaty
Requirement Benefit

MAP
Yes

It is not
No
Abusive & No Treaty
Beneficial Benefit
Owner

Yes

Treaty Benefit Granted

 6. Closed Fund for Mutual Account (CFMA)
DG Tax Circular Letter SE-41/PJ/2017

• Entity, established by law, not an income tax subject which functions are:
Transparent • pooling fund from Investor and then invest it for and in the name of Investor; and
Entity • receiving/earning income from the investment and then pass all of it to the Investor
based on each investment proportion

• Transparent Entity based on Decree of 11 January 2007 CPP2006/1870M, Duct. Gov.Gaz

CFMA No. 15, 2007 or its subsequent amendment

• Starting from 23 June 2017 (CA Agrement signed), CFMA through Investment Manager
or Custodian, for and in the name of CFMA Investor can claim DTC benefit as long as:
Main • the Investor is Netherland’s resident and the Beneficial Owner; and
Provision • each Investor satisfy the requirement & the procedure in Indonesian law and its
implementing regulation regarding DTC implementation
• Investor who invest through CFMA can only claim DTC benefit through CFMA
Terima Kasih