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Application of the MLI to the Tax Treaty between Japan and Indonesia

The MLI enters into force for Japan on January 1, 2019, and for Indonesia on August 1, 2020.
 Based on the reservations and notifications submitted by Japan on September 26, 2018 and by Indonesia on April 28, 2020 and November 26, 2020 the MLI applies to the tax treaty between Japan and Indonesia as described below. 

1. Tax treaty covered by the MLI
  -“Agreement between Japan and the Republic of Indonesia for the Avoidance of Double Taxation and the Prevention
    of Fiscal Evasion with respect to Taxes on Income”
    Date of signature: March 3, 1982
    Date of entry into force: December 31, 1982

2. Provisions of the MLI applicable to the tax treaty
  - Article 4(1) (Provisions that provide rules for determining whether a person other than an individual shall be treated
    as a resident of one of the Contracting Jurisdictions for the purposes of the tax treaty)
  - Article 6(1) (Preamble language describing the intent of the Contracting Jurisdictions that the tax treaty will not
    create opportunities for non-taxation or reduced taxation)
  - Article 7(1) (Provisions that deny the benefits under the tax treaty where the principal purpose or one of the principal
    purposes of any arrangement or transaction was to obtain those benefits)
  - Article 9(4) (Provisions for taxation on capital gains from alienation of shares or interests of entities deriving their
    value principally from immovable property)
  - Article 12(1) and (2) (Provisions regarding an agent that is deemed to constitute a permeant establishment)
  - Article 13(2) (Provisions regarding an activity that is deemed not to constitute a permanent establishment even if the
    activity is carried on through a fixed place of business)
  - Article 13(4) (Provisions for combining business activities carried on by closely related persons for the purpose of
    determining whether a permanent establishment exists)
  - Article 15 (Provisions for the definition of a person closely related to an enterprise)
  - Article 17(1) (Provisions regarding corresponding adjustments to taxation in accordance with arm’s length principle)

3. Entry into effect
 The provisions of the MLI shall have effect in each Contracting Jurisdiction with respect to the tax treaty between Japan and Indonesia: 
(a) in Japan:
   (i) with respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving rise 
      to such taxes occurs on or after January 1, 2021; and
   (ii) with respect to all other taxes levied by that Contracting Jurisdiction, for taxes levied with respect to taxable
      periods beginning on or after June 26, 2021; and
(b) in Indonesia:
   (i) with respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving rise
      to such taxes occurs on or after January 1, 2021; and
   (ii) with respect to all other taxes levied by that Contracting Jurisdiction, for taxes levied with respect to taxable 
      periods beginning on or after January 1, 2022.