Acceptance of Doubled Tax Avoidance ( P3b) with Mexico
Have been in Ratification
Have been in Ratification
Common
P3B with Mexico has been ratified with Keputusan Presiden Nomor 67 The year 2004, date of 10 Augusts 2004.
Negotiation process from P3B requires twice turkey turn, with chronology completely is presented in tables of hereunder.
Negotiation process => I. 1-5 Septembers 1997, Mexico City
II. 28-31 Marchs 2000, Jakarta
Initialed Jakarta, => 31 Julies 2000
Signed Kiosk Cabos, => 6 September 2002
Ratification => KEPPRES NO. 67/2004, tgl. 10 Augusts 2004
P3B with Mexico has been ratified with Keputusan Presiden Nomor 67 The year 2004, date of 10 Augusts 2004.
Negotiation process from P3B requires twice turkey turn, with chronology completely is presented in tables of hereunder.
Negotiation process => I. 1-5 Septembers 1997, Mexico City
II. 28-31 Marchs 2000, Jakarta
Initialed Jakarta, => 31 Julies 2000
Signed Kiosk Cabos, => 6 September 2002
Ratification => KEPPRES NO. 67/2004, tgl. 10 Augusts 2004
At the time of this article prepared information concerning continuation of process to P3B has not is exist, including inter alia date of notification by the Government of Indonesia to the Government of Mexico that the side of Indonesia has finalized ratification procedure.
So if before 31 Decembers 2004 each state has is each other inform that formality based on constitutional in both states has been fulfilled, hence Persetujuan will apply strarting 1 January 2005.
a. Double Domicile
If someone is considered to be [by] tax subject by two states, its(the status is determined [by] through applying from inveterate tests called as tie breaker rule, what applied sequentially that is : center vested interest ( centre vital of of interests), then habit resides ( habitual abode). If both the tests doesn't solve problem domicile doubled hence people is assumed to livings in state where s(he becomes citizen. If s(he became
citizen from both states hence its(the status will be determined based on acceptance with between both official functionaries.
In the case of someone or body in relation to a production acts as hali remainder or a foundation, will not be considered as tax subject, except to the in debt production of tax.
b. Definition " form of permanent business"
Cognition " form of permanent business" covers inter alia:
" management locus;
" office of branch;
" office building;
" plant;
" workshop;
" warehouse applied for outlet sale;
" agriculture four p’s or plantation;
" mining four p’s, earth oilwell or earth gas, or place of dig or place of mining of other natural resources, bridge or drilling ship;
" project of taking place construction more than 6 month;
" vesting of service taking place for a period of more than 91 days within 12 months;
" people or body acting for company livinging in other state, what has authority to sign up for company represented by it.
Cognition " form of permanent business" doesn't cover things mentioned hereunder:
" place of menyimpan and demonstrates merchandise;
" management of commercial stock of property of company solely with a view to is kept, on display or sent;
" management of commercial stock of property of company solely with a view to diolah by other company;
" management of sautu place of permanent business solely with a view to does purchasing of goods or merchandise, or collect information for the sake of his own company;
" management a place of permanent business solely with a view to does activity having the character of preparation or supporter for company importance;
" does activitys pool mentioned before all, along the length of is supporter or preparation for company importance.
c. Production from permanent possession
Freehold asset pemajakan to production from possession constantly within state hand where the located permanent possession. Definition " permanent possession" refers to legislation rule of state where the possession is located, including objects accompanying possession do not move, livestock and equipments applied in effort for agriculture and forestry, rights to such rules of public law concerning soil;land;ground to apply, freehold asset collects result to possession do not move, and freehold asset to payment of either erratic and also permanent as fee to do or freehold asset does dig material source of nature energy?powers. Cognition of permanent possession not be including boat, boat and plane.
d. Operating margin
Imposition bottom of tax from a " form of permanent business" in agreement this embraces is so-called " force of attraction rule ( limited)", that is operating margin which is tax object from a " form of permanent business" be:
" operating margin obtained from activity done by " form of permanent business" the; and
" sale of or the same merchandise is conspecific sold by " form of permanent business".
Net operating margin ( laba-kena-pajak) from a " form of permanent business", from company dimiciling in Mexico, beside hit [by] PPh as according to rate Section 17 Income tax [Code/Law], also is added with PPh Pasal 26 sentences ( 4) with rate 10%.
e. Transportation in international line
Operating margin from sea transportation carriage and air in international line can only be hit tax in domicile state. This treatment also applies for company from both states participating in a consortium.
f. Related parties
If a company livinging in one of state, does transaction with company livinging in other state, and both having related parties, and the transaction doesn't express transaction which " arm's length" ( transaction done by party(sides that is is not has related parties) hence one of state can do proofreading to the transaction.
If one of state do proofreading to transaction as mentioned upper, hence other state is obliged to do continuation proofreading, if state so-called latter agreed to proofreading by state so-called first.
g. Dividend, interest and royalty
Truncation rate of PPh from dividend, interest and royalty is as presented in tables of under this.
Production type Truncation rate
Dividend 10%
Interest 10%
Royalty 10%
The concerned jargon " interest" here not be including penalty?fine because delay in payment of interest.
Definition " royalty" covers copyrights, patent right, trade mark, design or model, plan, secret formula or way of processing and information about experience of in industrial area, commerce or science, the right to apply industrial equipment, commerce or science, including supply of help which is complement or additional from the rights is upper.
Besides, definition of royalty also covers the right to apply cinema film, or films or ribbon or record video applied for radio broadcast or telecast, including the right to receive picture or money voice is sent [by] through satellite or through cable, optical fiber or similar technology.
h. Gain from transfer of possession
Principle division of freehold asset pemajakan to gain from transfer of possession follows principle from OECD. If possession transferred is permanent possession hence tax to gain from the alienation is collected in state where the located possession.
Gain from transfer of boat or plane operated in international line is hit [by] tax in state where company operating it is dimiciling.
Gain from transfer of motion possession becoming part of a " form of permanent business" freehold asset pemajakan stays hand [by] state where form of the permanent business stays.
While possession that is is not included in category to imposition of tax to gain from its(the alienation is hit [by] tax in state where its(the seller livings.
i. Production from the relation of job(activity)
Time test for employee from one of state working in other state that only hit [by] tax in its(the country of origin is 183 days in a period of 12 months. Mean if an employee from PT Indonesia assigned to Mexico, employed it will only be hit tax in Indonesia if fulfilling 3 covenant that is:
i. the employee resides in Mexico less than 183 days in a period of 12 months; and
ii. its(the salary paid by tax subject that is is not livinged in Mexico; and
iii. its(the salary is not charged upon " form of permanent business" from Indonesia company residing in Mexico.
j. Production from free work
Production from free work by tax subject from one of state also will be hit tax in other state if its(the activity is done [by] through a the permanent place in that other state. Or the resided in other state of that is for a period of exceeding 91 days in a period of 12 months.
The concerned free work is medical doctor, lawyer, engineer, dentist, architect and accountant.
k. Director salary
Salary received by a director from a company livinging in other state, can be hit tax in the other state. The concerned jargon " director" in this context is member of board of directors or commissary keeping off in everyday activity manages the company.
If the director undertake manages company routinely hence treatment of its(the tax bows to rule Section 15 ( Production from the relation of job(activity).
l. Artist and athlete
Fee received by artist or atlet in other state, hit tax in the other state, without seeing duration of its(the activity is done. From the aspect of invitors approach PPh, fee received by Mexican artist for the agenda of show in Indonesia will be collected PPh equal to 20% from gross amounts.
This not applicable treatment if the show is part of culture exchanges program between both states.
m. Retired
Pension received by someone from one of state referring to the work is old world in the state will only be hit tax in source state.
n. Governmental officer
Salary, similar other fee and fee, what received by personal people referring to the service ketatanegaraan given will only be taxed in domicile state unless people the person is other citizen or state resident.
o. Professor and periset
People person doing activity to teach or does research in other university or education institute in other state, which is instituting nir income, struck from imposition of tax in the other state for the duration of 2 year since its(the arrival is for the first time.
p. Student and pemagang
Decent received by student or pemagang executing learning program or apprentice in other state, struck from imposition of tax in the other state, along the length of its(the fund comes from outside state where learning process or apprentice is done.
q. production of Others
Other production, was production besides than production mentioned in the face of only hit [by] tax in state where its(the receiver livings.
citizen from both states hence its(the status will be determined based on acceptance with between both official functionaries.
In the case of someone or body in relation to a production acts as hali remainder or a foundation, will not be considered as tax subject, except to the in debt production of tax.
b. Definition " form of permanent business"
Cognition " form of permanent business" covers inter alia:
" management locus;
" office of branch;
" office building;
" plant;
" workshop;
" warehouse applied for outlet sale;
" agriculture four p’s or plantation;
" mining four p’s, earth oilwell or earth gas, or place of dig or place of mining of other natural resources, bridge or drilling ship;
" project of taking place construction more than 6 month;
" vesting of service taking place for a period of more than 91 days within 12 months;
" people or body acting for company livinging in other state, what has authority to sign up for company represented by it.
Cognition " form of permanent business" doesn't cover things mentioned hereunder:
" place of menyimpan and demonstrates merchandise;
" management of commercial stock of property of company solely with a view to is kept, on display or sent;
" management of commercial stock of property of company solely with a view to diolah by other company;
" management of sautu place of permanent business solely with a view to does purchasing of goods or merchandise, or collect information for the sake of his own company;
" management a place of permanent business solely with a view to does activity having the character of preparation or supporter for company importance;
" does activitys pool mentioned before all, along the length of is supporter or preparation for company importance.
c. Production from permanent possession
Freehold asset pemajakan to production from possession constantly within state hand where the located permanent possession. Definition " permanent possession" refers to legislation rule of state where the possession is located, including objects accompanying possession do not move, livestock and equipments applied in effort for agriculture and forestry, rights to such rules of public law concerning soil;land;ground to apply, freehold asset collects result to possession do not move, and freehold asset to payment of either erratic and also permanent as fee to do or freehold asset does dig material source of nature energy?powers. Cognition of permanent possession not be including boat, boat and plane.
d. Operating margin
Imposition bottom of tax from a " form of permanent business" in agreement this embraces is so-called " force of attraction rule ( limited)", that is operating margin which is tax object from a " form of permanent business" be:
" operating margin obtained from activity done by " form of permanent business" the; and
" sale of or the same merchandise is conspecific sold by " form of permanent business".
Net operating margin ( laba-kena-pajak) from a " form of permanent business", from company dimiciling in Mexico, beside hit [by] PPh as according to rate Section 17 Income tax [Code/Law], also is added with PPh Pasal 26 sentences ( 4) with rate 10%.
e. Transportation in international line
Operating margin from sea transportation carriage and air in international line can only be hit tax in domicile state. This treatment also applies for company from both states participating in a consortium.
f. Related parties
If a company livinging in one of state, does transaction with company livinging in other state, and both having related parties, and the transaction doesn't express transaction which " arm's length" ( transaction done by party(sides that is is not has related parties) hence one of state can do proofreading to the transaction.
If one of state do proofreading to transaction as mentioned upper, hence other state is obliged to do continuation proofreading, if state so-called latter agreed to proofreading by state so-called first.
g. Dividend, interest and royalty
Truncation rate of PPh from dividend, interest and royalty is as presented in tables of under this.
Production type Truncation rate
Dividend 10%
Interest 10%
Royalty 10%
The concerned jargon " interest" here not be including penalty?fine because delay in payment of interest.
Definition " royalty" covers copyrights, patent right, trade mark, design or model, plan, secret formula or way of processing and information about experience of in industrial area, commerce or science, the right to apply industrial equipment, commerce or science, including supply of help which is complement or additional from the rights is upper.
Besides, definition of royalty also covers the right to apply cinema film, or films or ribbon or record video applied for radio broadcast or telecast, including the right to receive picture or money voice is sent [by] through satellite or through cable, optical fiber or similar technology.
h. Gain from transfer of possession
Principle division of freehold asset pemajakan to gain from transfer of possession follows principle from OECD. If possession transferred is permanent possession hence tax to gain from the alienation is collected in state where the located possession.
Gain from transfer of boat or plane operated in international line is hit [by] tax in state where company operating it is dimiciling.
Gain from transfer of motion possession becoming part of a " form of permanent business" freehold asset pemajakan stays hand [by] state where form of the permanent business stays.
While possession that is is not included in category to imposition of tax to gain from its(the alienation is hit [by] tax in state where its(the seller livings.
i. Production from the relation of job(activity)
Time test for employee from one of state working in other state that only hit [by] tax in its(the country of origin is 183 days in a period of 12 months. Mean if an employee from PT Indonesia assigned to Mexico, employed it will only be hit tax in Indonesia if fulfilling 3 covenant that is:
i. the employee resides in Mexico less than 183 days in a period of 12 months; and
ii. its(the salary paid by tax subject that is is not livinged in Mexico; and
iii. its(the salary is not charged upon " form of permanent business" from Indonesia company residing in Mexico.
j. Production from free work
Production from free work by tax subject from one of state also will be hit tax in other state if its(the activity is done [by] through a the permanent place in that other state. Or the resided in other state of that is for a period of exceeding 91 days in a period of 12 months.
The concerned free work is medical doctor, lawyer, engineer, dentist, architect and accountant.
k. Director salary
Salary received by a director from a company livinging in other state, can be hit tax in the other state. The concerned jargon " director" in this context is member of board of directors or commissary keeping off in everyday activity manages the company.
If the director undertake manages company routinely hence treatment of its(the tax bows to rule Section 15 ( Production from the relation of job(activity).
l. Artist and athlete
Fee received by artist or atlet in other state, hit tax in the other state, without seeing duration of its(the activity is done. From the aspect of invitors approach PPh, fee received by Mexican artist for the agenda of show in Indonesia will be collected PPh equal to 20% from gross amounts.
This not applicable treatment if the show is part of culture exchanges program between both states.
m. Retired
Pension received by someone from one of state referring to the work is old world in the state will only be hit tax in source state.
n. Governmental officer
Salary, similar other fee and fee, what received by personal people referring to the service ketatanegaraan given will only be taxed in domicile state unless people the person is other citizen or state resident.
o. Professor and periset
People person doing activity to teach or does research in other university or education institute in other state, which is instituting nir income, struck from imposition of tax in the other state for the duration of 2 year since its(the arrival is for the first time.
p. Student and pemagang
Decent received by student or pemagang executing learning program or apprentice in other state, struck from imposition of tax in the other state, along the length of its(the fund comes from outside state where learning process or apprentice is done.
q. production of Others
Other production, was production besides than production mentioned in the face of only hit [by] tax in state where its(the receiver livings.
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