Scope of Application of the China-Indonesia Tax Agreement丨Indonesia Tax Guide 2025 (52)
China-Indonesia Tax Agreement
Scope of application
2025-03-27 13:50:28
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This issue's introduction
Scope of application of the China-Indonesia tax agreement
China-Indonesia Tax Agreement and Mutual Consultation Procedure
Scope of application of the China-Indonesia tax agreement
(1) Scope of the subject
In terms of the subject, the subject entitled to apply the Agreement is a "person" who is a resident of either China or Indonesia or both.
"Person" refers to individuals, companies and other groups.
The identity of an individual who is a resident of both China and Indonesia shall be determined in accordance with the following rules:
(1) He shall be deemed to be a resident of the Contracting State where he has a permanent residence; if he has a permanent residence in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (center of vital interests);
(2) If the country where his center of vital interests is located cannot be determined, or he has no permanent residence in either Contracting State, he shall be deemed to be a resident of the country where he has a habitual residence;
(3) If he has a habitual residence in both Contracting States or neither, the competent authorities of the Contracting States shall resolve the issue through consultation.
In order to enjoy the benefits of the tax treaty, Chinese resident enterprises need to submit proof of Chinese tax residency to the Indonesian Taxation Bureau, and also need to report their transactions that have obtained tax treaty benefits to the Indonesian Taxation Bureau to ensure that the transactions have economic substance.
(2) Scope of objects
In terms of applicable objects, the specific taxes applicable to the China-Indonesia Tax Treaty in China are corporate income tax and personal income tax, and the specific taxes applicable in Indonesia are income tax levied in accordance with the Indonesian Income Tax Law of 1984 (including corporate income tax and personal income tax).
(3) Territorial scope
The term "Indonesia" in the China-Indonesia Tax Treaty includes the territory established by the Republic of Indonesia in its laws, as well as the contiguous areas over which the Republic of Indonesia has sovereignty, sovereign rights or jurisdiction under international law.
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