THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
THE GOVERNMENT OF THE KINGDOM OF SAUDI ARABIA
RECIPROCAL EXEMPTION OF TAXES AND CUSTOMS DUTIES ON THE ACTIVITIES OF AIR TRANSPORT ENTERPRISES OF THE TWO COUNTRIES
TAXES AND DUTIES COVERED
This Agreement shall apply to taxes on income imposed on behalf of each Contracting State irrespective of the manner in which they are levied.
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 property and taxes on the total amounts of wages or salaries paid by enterprises.
The existing taxes to which the Agreement shall apply are in particular:
(a) in the case of the Republic of Indonesia (i) Corporate income tax; (ii) Individual income tax and other taxes on income imposed under the Law No. 7 of 1983;
(hereinafter referred to as "Indonesian tax");
(b) in the case of the Kingdom of Saudi Arabia (i) Corporate income tax; (ii) Individual income tax and other taxes on income
(hereinafter referred to as "Saudi Tax");
This Agreement shall also apply to any identical or substantially similar taxes as are subsequently imposed in addition to, or in place of the existing taxes covered by this Agreement.
The two Contracting States undertake to extend exemption on all equipments mentioned in the schedule A and B annexed hereto imported in or exported from a Contracting State for the own use of the air transport enterprises of the other Contracting State from customs duties and charges. This list may be modified in writing by mutual consent.
In this Agreement, unless the context otherwise requires:
the terms "a Contracting State" and "the other Contracting State" mean the Republic of Indonesia or the Kingdom of Saudi Arabia, as the context requires;
the terms "air transport enterprise of a Contracting State" and the "air transport enterprise of the other Contracting State" mean:
in the case of Saudi Arabia, the Saudi Arabian Airlines Corporation or its successors;
in the case of the Republic of Indonesia, Garuda Indonesia or its successors;
the term "exercise of air transport" means the operational activity of transportation by air of persons, animals, goods and mail conducted by an enterprise of a Contracting State including sale of tickets and similar documents used for the purpose of transport;
the term "international traffic" means any transport by aircraft, owned, leased or chartered, operated by an enterprise of a Contracting State, except when such transport is made solely between places in the other Contracting State;
the term "competent authority" means:
in the case of the Republic of Indonesia, the Minister of Finance or his authorized representative;
in the case of the Kingdom of Saudi Arabia, the Ministry of Finance and National Economy; or its authorized representative;
the term "resident of a Contracting State" means any person, who under the law of that State, is liable to taxation therein by reason of his domicile, residence, or any other criterion of a similar nature;
the term "person" includes an individual, a corporation, a company or any other body or persons;
the term "other payments" means social security insurance, old age annuity or pension, sickness or medical insurance, unemployment insurance or any other payments measured by income levied on the salaries and allowances of the employees by the law of the Contracting State.
Income and profits derived by the air transport enterprise of a Contracting State from the exercise of air transport in international traffic shall be exempted from taxes in the other Contracting State.
The provisions of paragraph 1 shall also apply to income and profits derived by the air transport enterprise of a Contracting State from its participation in a pool or a joint business with the designated airline of the other State as referred to in Article 2 paragraph (b).
For the purposes of this Article, income and profits derived by air transport enterprise of a Contracting State, from the exercise of air transport in international traffic also include income and profits derived from:
the rental, lease or maintenance of aircraft;
training schemes, management and other services rendered by an air transport enterprise of one Contracting State to the air transport enterprise of the other Contracting State.
REMUNERATION FOR PERSONAL SERVICES
Remuneration derived in respect of an employment exercised on board of an aircraft operated in international traffic by the air transport enterprise of a Contracting State, shall be taxable only in that State.
Remuneration derived by an employee of an air transport enterprise of a Contracting State in respect of employment exercised in the other Contracting State shall, in accordance with the laws and regulations in force of each Contracting State, be exempted from the taxes and the other payments in that other State unless he is a national of that other Contracting State.
MUTUAL AGREEMENT PROCEDURE
ENTRY INTO FORCE
This Agreement shall be ratified and the instruments of ratification shall be exchanged in due course of time.
The Agreement shall enter into force upon the exchange of instruments of ratification and its provisions shall have effect, in a Contracting State, on any income arising on or after the first day of January 1989.
The Protocol shall form an integral part of this Agreement.
FOR THE GOVERNMENT OF THE
FOR THE GOVERNMENT OF
FOR THE GOVERNMENT OF THE
FOR THE GOVERNMENT OF
Ground Equipment and Material to be exempted from Customs Duties:
CARS AND EQUIPMENT
ADVERTISING AND SALES PROMOTION MATERIALS
ALL SHOULD BEAR AIRLINE'S MOTTO/SYMBOL