Tajikistan

AGREEMENT BETWEEN

THE  REPUBUC OF INDONESIA AND

THE REPUBLIC  OF TAJIKISTAN

FOR

THE AVOIDANCE OF DOUBLE TAXATION AND

THE PREVENTION OF FISCAL EVASION  WITH  RESPECT TO TAXES ON INCOME

The Republic of Indonesia and The Republic of Tajikistan,  hereinafter referred to as "the Contracting States"

Confirming  their desire  to  develop   and  strengthen  the  economic,  scientific, technical and cultural cooperation between both states,  and

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

Have agreed as follows:

ARTICLE I

PERSONAL  SCOPE

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

ARTICLE  II

TAXES COVERED

1.

This Agreement  shall apply to taxes on  income  imposed  on behalf of each Contracting  State  or local  authorities,  irrespective  of the manner in which they are levied.

2.

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.

3.

The existing  taxes to which the Agreement  shall apply are in particular  :

(a)

in Indonesia  :

the income tax.

(hereinafter referred to as "Indonesian tax").

(b)

in the case of Republic of Tajikistan  :

the profit tax from the juridical  person; the income tax from the citizens;

(hereinafter referred to as "Tajik taxes").

4.

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  Ill

GENERAL  DEFINITIONS

1.

For  the  purposes   of this  Agreement,  unless  the  context   otherwise requires:

(a)

the term " a Contracting State" and "the other Contracting State" means     Republic   of  Indonesia  or  Republic   of  Tajikistan   as context  requires;

(b)

i)

the term  "Indonesia"  means  the territory of the  Republic of Indonesia as defined in its laws;

ii)

the  term    "Tajikistan"   means  the  Republic   of Tajikistan and under the use in the geographic essence  includes its territory,  internal  water,  air space  which   are  under  the sovereignty and jurisdiction of the  Republic  of Tajikistan, including   the   rights   on   use   of   bowels    and   natural resources     in    connection    with    the    norms     of    the International  law and where the legislation of the Republic of Tajikistan is;

(c)

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

(d)

the  term  "company"  means  any  body  corporate  or any  entity which  is treated as a body corporate for tax purposes;

(e)

the  term  "enterprise  of  a Contracting   State"  and  "enterprise  of the  other  Contracting  State"  mean  respectively  an  enterprise carried on by a resident  of Contracting   State  and  an enterprise carried on by a resident of the other Contracting  State;

(f)

the  term  "international traffic"  means  any transport  by a ship or aircraft operated by an enterprise of a Contracting State, except when  the  ship  or aircraft  is  operated  solely  between  places  in the other Contracting  States;

(g)

the term "competent authority" means :

i)

In Indonesia:

The Minister of Finance or his authorized representative;

ii)

In Tajikistan :

the Minister of Finance or his authorized representative:

(h)

the term "national" means :

i)

any   individual   possessing    the   nationality    Contracting State;

ii)

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

2.

As regards  the application of the Agreement by a Contracting State any term not  defined  therein  shall,  unless  the context  otherwise  requires, has the  meaning  which  it has under the  laws  of that State  concerning the taxes to which the Agreement applies.

ARTICLE  IV

RESIDENT

1.

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.

2.

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.

3.

Where by reason of the provisions of paragraph  1   a person  other than an individual is a residence of both Contracting State, then it shall be deemed  to  be a resident  of the State in which  its  place of effective management is situated.

ARTICLE V

PERMANENT ESTABLISHMENT

1.

For   the   purposes   of   this   Agreement,   the   term   II        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.

2.

The term II   permanent establishment" includes especially:

(a)

a  place of management;

(b)

a branch;

(c)

an office;

(d)

a factory;

(e)

a workshop;

(f)

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 used for exploration or exploitation of natural resources.

(g)

a farm  or plantation  and forestry;

(h)

a warehouse or premises used as sales outlet;

3.

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 6(six)  months;

(b)

the furnishing  of services,  including consultancy services  by an enterprise  through  employees  or  other personnel   engaged   by the enterprise for such purpose,  but only where  activities  of that nature  continue  (for the same or a connected  project) within the country for a   period or periods aggregating more  that 91  days within any twelve month period.

4.

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 activities of a preparatory or auxiliary character.

(g)

the maintenance of a fixed place of business  solely for any combination of activities  mentioned  in sub-paragraph  (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.

5.

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 or habitually exercises in that State an authority to conclude contracts in the name of 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  maintain  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.

6.

Notwithstanding the preceding provisions of this Article,  an  insurance enterprise  of  a  Contracting  State  shall,   except   in   regard  to  re• insurance, be deemed to have a permanent establishment in the other Contracting State  if it collects  premiums  in the  territory  of that other State or insures risks situated therein through a person other than an agent of an independent status to whom paragraph 7 applies.

7.

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.  However, when the activities of such an agent are devoted wholly  or almost wholly  on  behalf of that  enterprise,  he  will  not  be considered  an  agent  of  an  independent  status  within  the  meaning of this paragraph.

8.

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  VI

INCOME FROM IMMOVABLE PROPERTY

1.

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.

2.

The term  "immovable property" shall have the meaning  which it has under the law of 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, right to which the provisions of general law respecting landed property apply, usufruct of immovabte property 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.

3.

The provisions of paragraph  1   shall also apply to income  derived from the direct use, letting,  or use in any other form of immovable  property.

4.

The  provisions  of  paragraph  1    and  3  shall  also  apply  to the  income from  the  immovable  property  of an  enterprise  and  to  income  from immovable property used for the performance of independent personal services.

ARTICLE  VII

BUSINESS  PROFITS

1.

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 then an 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 establishment.

2.

Subject  to  the  provrsions  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.

3.

In the determining  the profits of a permanent establishment, there shall be   allowed   as   deductions   expenses  which   are   incurred  for  the purposes  of the  business  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.  However,  no such deduction  shall be allowed' in  respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses)  by  the  permanent establishment to  the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments  in  return for the use of  patents  or other rights,  or by way of commission, for specific services  performed or for management, or,  except  in the case of a banking enterprise,  by way of interest on moneys  lent to the  permanent  establishment.  Likewise,  no  account shall  be  taken,   in  the  determination  of the  profits  of  a  permanent establishment, for amounts charged, (otherwise than towards reimbursement of actual expenses), by the permanent establishment to the head  office of the enterprise or any of its other offices, by way of royalties,  fees  or other similar payments  in return for the use of patents or other rights,  or by way of commission for specific services performed or for management,  or,  except in  the case of a banking  enterprise,  by way of  interest  on moneys lent  to the head office  of the enterprise  or any of its other offices.

4.

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.

5.

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.

ARTICLE VIII

INTERNATIONAL TRAFFIC

1.

Profits  derived  by  an  enterprise  of  a  Contracting  State  from  the operation  of ships and aircraft,  in  international  traffic  shall be taxable only in that State.

2.

For  the  purposes  of  Paragraph  1      of  this  Article  profits  from  the operation of ship or aircraft in international traffic includes  :

a)

the lease of container which is incidental to the operation of ship or aircraft.

b)

the lease of ship or aircraft in international traffic.

3.

The   provisions  of paragraphs  1     shall  also  apply  to  profits  from  the participation  in  a  pool,  a  joint business or an  international  operating agency.

ARTICLE  IX

ASSOCIATED ENTERPRISES

1.

Where

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 of 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  a accrued,  may be  included in the profits of that enterprises  and  taxed accordingly.

2.

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 the Agreement and the competent authorities of the Contracting States shall, if necessary consult each other.

3.

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 X

DIVIDENDS

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 State.

2.

However,  such dividends may also be taxed in  the Contracting State of which the company paying the dividends  in a resident and according to the  laws  of that  state,  but  if the  receipt  is  beneficial  owner  of the dividends the tax so charges shall not exceed  10 per cent of the gross amount of dividends.

3.

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

4.

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 in a resident, through a permanent establishment situated therein, or performs in that order 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 establishment or fixed base. In such case, the provision of Article 7 or Article XIV,  as the case may be, shall apply.

5.

Whether a company which is a  resident of a Contracting State derives profits  or  income  from the other Contracting  States,  that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends   are paid to a resident of that other State or insofar as the  holding  in  respect to which  the  dividends  are  paid  is effectively  connected  with  permanent establishment or a  fixed  base situated  in  that other State  nor subject  the  company's  undistributed profits  to  a  tax  on  the  company's  undistributed  profits  even  if the dividends  paid  or the undistributed  profits  consist  wholly  or partly of profits or income arising in such other State.

6.

Notwithstanding  any  other  provrsions  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   percents  of  the  amount  of  such  profits  after deducting there form income tax and other taxes on  income imposed thereon in that other State.

7.

The provision of paragraph 6 of this Article shall not affect the provision contained in any production sharing contract and relating to oil and gas sector  concluded  by the Government of Indonesia,  its  instrumentality, its relevant state oil and gas company or any other entity thereof with a person who is a resident of the other Contracting States.

ARTICLE XI

INTEREST

1.

Interest  arising  in  a  Contracting  State and  paid  to a  resident of  the other Contracting  State  may be taxed in  that other Contracting  State  if such resident is the beneficial owner of the interest.

2.

The  rate  of  tax  imposed  by  one  of Contracting  States  on  interest derived  from  sources  within that  Contracting  States  and  beneficially owned by resident of the other Contracting State shall not exceed 10 percent of the gross amount of the interest.

3.

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 from time to time between the competent authorities of the Contracting States, shall be exempt from tax in the first-mentioned State.

4.

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,  including interest on deferred payment sales.

5.

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   referred  to  under  c)  of paragraph  1   of Article VII.  In such case, the  provisions  of Article VII  or XIV, as the case may be, shall apply.

6.

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.

7.

Where  by reason  of a special relationship between  the  payer  and the beneficial owner or between  both of them and some  other persons, 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 XII

ROYALTIES

1.

Royalties  arising  in  a  Contracting State  and  paid to a  resident  of  the other Contracting State  may be taxed in that other State.

2.

The  rate  of tax  imposed  by one  of Contracting  States  on  royalties derived  from  source  within  that  Contracting  State  and  beneficially owned  by resident  of the other Contracting  State  shall  not exceed  10 per cent of the gross amount of the royalties described in paragraph

3.

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, 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:

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

4.

The  provisions  of paragraphs  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   referred   to   under  c)   of  paragraph  1   of Article VII.  In such case,  the provisions  of Article  VII or Article XIV,  as the case may be, shall apply.

5.

Royalties   shall  be  deemed  to  arise  in  a Contracting  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  Contracting  State  or not,  has  in  a  Contracting  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.

6.

Where, by reason of a  special relationship between the payer and the beneficial owner or between both of them and some other persons,  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 payment shall remain taxable  according  to the  laws  of each  Contracting  State, due regard being had to the other provisions  of this Agreement.

ARTICLEXllf

CAPITAL  GAINS

1.

Gains derived by a  resident of  a  Contracting  State  from  the alienation of     immovable property  referred to in Article VI  and  situated  in  the other Contracting State may be taxed in that other state.

2.

Gains  from  the  alienation  of movable  property  forming  part  of  the business property of permanent establishment which an enterprise of a Contracting  State  has  in  the other  Contracting  State  or  of  movable property   pertaining   to   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.

3.

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.

4.

Gains from the alienation  of any property  other than that referred  to in the preceding paragraphs shall be taxable only in the Contracting State of which the alienator is a resident.

ARTICLE XIV

INDEPENDENT PERSONAL SERVICES

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 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 within any twelve month period.    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.

2.

1. The  term  "professional  services"  includes  especially   independent scientific,  literary,  artistic,  educational  or teaching activities  as well as the  independent  activities  of physicians,  engineers,  lawyers,  dentist, architects,  and accountants.

ARTICLE XV

DEPENDENT PERSONAL SERVICES

1.

Subject  to the provisions  of Articles  XVI,  XVIII,  XIX  and XX, 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 there from may be taxed in that other State.

2.

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  that other State  for a period or periods not exceeding in  the aggregate 183  days within  any twelve  month period commencing or ending in the fiscal year concerned; and

b.

the remuneration is paid by, or on behalf of,  an employer who is not a resident of that 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.

3.

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 XVI

DIRECTORS' FEES

1.

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.

2.

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 XV.

ARTICLE  XVII

ARTISTES  AND ATHLETES

1.

Notwithstanding  the provisions of Articles XIV and XV,  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 an athlete,  from his personal activities as such  exercised  in the other Contracting State, may be taxed in that other State.

2.

Where   income  in   respect   of  personal   activities   exercised   by  an entertainer or  an  athlete  in  his capacity  as  such  accrues  not to the entertainer  or athlete himself but to another person,  that income may, notwithstanding  the provisions  of Articles VII, XIV  and XV,  be taxed in the Contracting State in which the activities of the entertainer  or athlete are exercised.

3.

Notwithstanding  the provisions of paragraphs  1  and 2, income  derived from  activities  referred  to in  paragraph  1    performed  under a cultural agreement  or  arrangement  between  the Contracting  States  shall  be exempted  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 XVIII

PENSIONS AND ANNUITIES

1.

Subject to the provisions  of paragraphs  2 of Article  XIX,  any  pensions or  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.

2.

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  XIX

GOVERNMENT SERVICE

1.

(a)

 Remuneration,   other   than   a  pension,   paid   by   a  Contracting State,  or a local  authority  thereof  to an  individual  in  respect  of services  rendered to that State or local 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.

2.

(a)

Any  pension   paid  by,  or out of funs  created  by,  a  Contracting State or a     local authority thereof to an individual in respect  of services rendered to that State or local authority shall be taxable only in that State.

(b)

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

3.

The    provisions    of   Articles   XV,   XVI,   and   XVIII    shall    apply   to remunerations   and   pensions    in   respect   of   services   rendered   in connection  with  a  business   carried  on  by  a  Contracting  State  or local authority thereof.

ARTICLE XX

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  exempted   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.

ARTICLE XXI

STUDENT AND TRAINEES

1.

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.

2.

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 XXII

OTHER INCOME

1.

Items  of income  of a resident not dealt with  in the foregoing  Articles  of this Agreement,  shall be taxable in the State where they arise .

2.

The  provisions  of paragraph  1     shall  not  apply  to income,  other than income from immovable property as defined  in paragraph 2 of Article 6,  . if the recipient of such income,  being a 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 to which the income is paid is effectively connected  with  such a permanent establishment or fixed base. In such a case the provisions  of Article VI I   and Article XIV as the case may be, shall apply.

ARTICLE XXIII

METHOD  FOR ELIMINATION  OF DOUBLE  TAXATION

Where  a  resident   of  a  Contracting  State  derives   income  from  the  other Contracting  State,  the  amount  of tax on that  income  payable  in  that other Contracting  State  in  accordance  with the provisions  of this Agreement,  may be  credited  against  the  tax  levied  in  the  first-mentioned  Contracting  State imposed on that resident. The amount of credit,  however, shall not exceed the amount  of  the tax  on  the first-mentioned  Contracting  State  on that  income computed in accordance  with its taxation laws and regulations.

ARTICLE XXIV

NON-DISCRIMJNATION

1.

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  are or may be subjected.

2.

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  Sate  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.

3.

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  requirement to which other similar enterprises  of the first• mentioned State are or may be subjected.

4.

Except where the provisions  of paragraph  1   of Article  IX.  paragraph VII of  Article  XI,  or paragraph  6 of Article  XII apply,  interest,  royalty and other disbursement 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.

5.

In  this Article the term "taxation"  means taxes which are the subject of this Agreement.                                                                     

ARTICLE XXV

MUTUAL AGREEMENT PROCEDURE

1.

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 competent authority of the Contracting  State of which he is a  resident or, if  his case comes under  paragraph  1 of Article  XXIV,  to that of the Contracting  State  of which he is  a national.  The case must be  presented within two years from the first notification of the action resulting in taxation not in accordance with the provisions of the Agreement.

2.

The competent authority shall endeavor,  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.

3.

The competent authorities of the Contracting  State shall  endeavor 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.

4.

The competent authorities of the Contracting  State may communicate with  each  other directly  for the purpose  of-reaching  an agreement  in the  sense  of the  preceding  paragraphs.  The  competent  authorities, through consultations,  shall develop  appropriate bilateral  procedures, conditions,  methods  and  techniques  for  the  implementation  of  the mutual agreement procedure provided for in this article.

ARTICLE  XXVI

EXCHANGE  OF INFORMATION

1.

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   Cont(acting   States concerning  taxes  covered  by  the Agreement,  insofar  as the taxation there  under  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 I. 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.  However,  if the information  is  originally  regarded  as secret in the transmitting  state it shall be disclosed only to persons of authorities (including courts and administrative bodies) involved in the assessment  or collection of, the enforcement   or  prosecution  in  respect  of,  or  the  determination  of appeals   in   relation   to,   the  taxes   which   are  the   subject  of  the Agreement.  Such persons or authorities  shall use the information  only for  such  purposes  but  may disclose  the  information  in  public  court proceedings,  or in judicial decisions.

2.

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 (public order).

ARTICLE XXVII

DIPLOMATIC AGENTS AND CONSULAR OFFICERS

Nothing  in this Agreement shall affect the fiscal privileges of diplomatic agents or consular officers  under the general rules of international law or under the provisions of special agreements.

ARTICLE XXVIII

ENTRY INTO FORCE

1.

This Agreement  shall enter into force on the later of the dates on which the  respective  Government  may  notify each  other in  writing that  the formalities  constitutionally required in their respective  States have been complied with.

2.

This Agreement  shall have effect:

(a)

in  respect ot tax withheld  at the 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 1   January  in the year next following  that in which the Agreement enters into force.

ARTICLE XXIX

TERMINATfON

This Agreement shall  remain  in force until terminated  by 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 5 (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 tax withheld  at the source to income derived  on or after 1 January   in   the   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 the  year  next following that in which  the  notice of termination is given.

IN  WITNESS   WHEREOF.  the  undersignerl   duly  authorizec  thereto.  Have signed this Agreement.

Done in duplicate at Jakarta on 28^th  of October m the year Two thousand and three in the  Indonesian, Tajik and English languages. All texts being equally authentic.  If there is any divergence conceninq the interpretation, the Enqllsh text shall prevail.

FOR

THE REPUBLIC OF INDONESIA

DR. N. HASSAN WIRAJUDA

Minister for Foreign Affairs

FOR

THE REPUBLIC OF TAJIKISTAN

KHAKIM SOLIEV

Minister ot Economy and Trade