ARTICLE 14 　　　　　　　　　　　　　Capital Gains 　　(1) Gains derived by a resident of a Contracting State from the alienation of property described in Article 6 (Income from Immovable (Real) Property) and situated in the other Contracting State may be taxed in that other State. The term "property described in Article 6 (Income from Immovable (Real) Property) situated within the other Contracting State" includes- 　　(a) Where Indonesia is the other Contracting State, an interest in real property situated in Indonesia; and 　　(c) Where the United States is the other Contracting State, a United States real property interest. 　　(2) A resident of one of the Contracting States shall be except from tax by the other Contracting State of gains derived from the sale, exchange, or other disposition of capital assets other than assets described in paragraph (1) unless- 　　(a) The recipient of the gain has a permanent establishment or fixed base in the other Contracting State and the property giving rise to the gain is effectively connected with such permanent establishment or fixed base, in which case the provisions of Article 8 (Business Profits) or Article 15 (Independent Personal Services) shall apply; or (b) The recipient of the gain is an individual and is present in the other Contracting State for a period or periods aggregating 120 days or more during the taxable year. 　　(3) Notwithstanding paragraph (2), gains derived by a resident of a Contracting State from the deemed alienation of assets described in paragraph 2 (i) of Article 5 (Permanent Establishment) and used for the exploration for or exploitation of oil and gas resources shall be taxable only in that State. ARTICLE 15 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 except in the following circumstances, when such income may also be taxed in the other Contracting State: 　　(a) If he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other Contracting State; or 　　(b) If his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 120 days in any consecutive 12-month period; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State. 　　(2) The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants. ARTICLE 16 Dependent Personal Services 　　(1) Wages, salaries, and similar remuneration derived by an individual who is a resident of one of the Contracting States from labor or personal services performed as an employee, including income from services performed by an officer of a corporation or company, may be taxed by that Contracting State. Except as provided by paragraph (2), such remuneration derived from sources within the other Contracting State may also be taxed by that other Contracting State. 　　(2) Remuneration described in paragraph (1) derived by an individual who is a resident of one of the Contracting States shall be exempt from tax by the other Contracting State if- 　　(a) he is present in that other Contracting State for a period or periods aggregating less than 120 days in any consecutive 12-month period; and 　　(b) the remuneration is paid by or on behalf of an employer who is not a resident of the other State; and 　　(c) the remuneration is not borne as such or reimbursed by a permanent establishment which the employer has in that other Contracting State. 　　(3) Notwithstanding paragraph (2), remuneration derived by an individual from the performance of labor or personal services as an employee aboard ships or aircraft operated by a resident of one of the Contracting States in international traffic shall be exempt from tax by the other Contracting State if such individual is a member of the regular complement of the ship or aircraft. ARTICLE 17 Artistes and Athletes 　　(1) Notwithstanding Articles 15 (Independent Personal Services) and 16 (Dependent Personal Services), income derived by public entertainers, such as theatre, motion picture, radio or television artistes, and musicians, and by athletes, from their personal activities as such may be taxed in the Contracting State in which those activities are exercised if the gross amount of such remuneration, including expenses reimbursed to him or borne on his behalf, exceeds in the aggregate 2,000 United States dollars or its equivalent in Indonesian rupiahs in any consecutive 12-month period. 　　(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 is diverted to another person, that income may, notwithstanding the provisions of Articles 8 (Business Profits) and 15 (Independent Personal Services), be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised. 　　(3) The provisions of paragraph (1) and (2) shall not apply to remuneration or profits derived from activities exercised in a Contracting State if the visit to that State is substantially supported or sponsored by the other Contracting State and is certified by the competent authority of the sending State to qualify under this provision. ARTICLE 18 Government Service 　　(1) (a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to any individual in respect to services rendered to that State or political subdivision or local authority thereof 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 State and the recipient 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 performing the services. 　　(2) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to any individual in respect of services rendered to that State or political subdivision or local authority thereof shall be taxable only in that State. 　　(3) The provisions of Articles 15 (Independent Personal Services), 16 (Dependent Personal Services), and 21 (Private Pensions and Annuities) shall apply to remuneration or pensions in respect of services rendered in connection with any trade or business carried on by a Contracting State or a political subdivision or a local authority thereof. ARTICLE 19 Students and Trainees 　　(1) (a) An individual who is a resident of a Contracting State immediately before making a visit to the other Contracting State and is temporarily present in the other State solely: 　　(i) as a student at a recognized university, college, school or other similar recognized educational institution in that other State; or 　　(ii) as a recipient of a grant, allowance or award for the primary purpose of study, research or training from the Government of either state or from a scientific, educational, religious or charitable organization or under a technical assistance program entered into by the Government of either State;shall be exempt from tax in that other State for a period not exceeding five years from his date of arrival in that other State on amounts described in subparagraph (b). 　　(b) The amounts referred to in subparagraph (a) are: 　　(i) all remittances from abroad for the purposes of his maintenance, education, study, research, or training; 　(ii) the amount of such grant, allowance or award; and 　　(iii) any remuneration not exceeding two thousand United States dollars or its equivalent in Indonesian rupiahs per year in respect of services in that other State, provided the services are performed in connection with his study, research or training or are necessary for the purposes of his maintenance. 　　(2) An individual who is a resident of a Contracting State immediately before making a visit to the other Contracting State and is temporarily present in the other State solely as a business or technical apprentice shall be exempt from tax in that other State for a period not exceeding twelve consecutive months on his income from personal services in an aggregate amount not in excess of 7,500 United States dollars or its equivalent in Indonesian rupiahs. ARTICLE 20 Teachers and Researchers 　　(1) An individual who is a resident of a Contracting State immediately before making a visit to the other Contracting State, and who, at the invitation of a university, college, school or other similar educational institution, visits that other State solely for the purpose of teaching or research or both at such educational institution shall be exempt from tax in that other State on any remuneration for such teaching or research for a period not exceeding two years from his date of arrival in that other State. An individual shall be entitled to the benefits of this paragraph only once. 　　(2) This Article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons. ARTICLE 21 Private Pensions and Annuities 　　(1) Except as provided in Article 18 (Government Service), pensions and other similar remuneration in consideration of past employment derived from sources within one of the Contracting States by a resident of the other Contracting State may be taxed by both Contracting States. If the beneficial owner of pensions and other similar remuneration is a resident of the other Contracting State, the tax so charged may not exceed 15 percent of the gross amount thereof. 　　(2) Annuities paid to an individual who is a resident of one of the Contracting States shall be taxable only in that Contracting State. 　　(3) Alimony and child support payments made by an individual who is a resident of one of the Contracting States to an individual who is a resident of the other Contracting State shall be exempt from tax in that other Contracting State. 　　(4) The term "pensions and other similar remuneration", as used in this Article, means payments made by reason of retirement or death in consideration for services rendered, or by way of compensation for injuries received in connection with past employment. 　　(5) The term "annuities", as used in this Article, means a stated sum paid periodically at stated times during life, or during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). 　　(6) The term "alimony", as used in this Article, means periodic payments made pursuant to a decree of divorce, separate maintenance agreement, or support or separation agreement. ARTICLE 22 Social Security Payments 　　Social security payments and similar benefits paid out of public funds by one of the Contracting States to an individual who is a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned Contracting State. This Article shall not apply to payments described in Article 18 (Government Service). ARTICLE 23 Relief from Double Taxation 　　Double taxation of income shall be avoided in the following manner: 　　(1) In accordance with the provisions and subject to the limitations of the law of the United States, as in force from time to time, the United States shall allow to a citizen or resident of the United States as a credit against the United States tax the appropriate amount of Indonesian tax. 　　Such appropriate amount shall be based upon the amount of tax paid to Indonesia, but the credit shall not exceed the limitations provided by United States law for the taxable year. For the purpose of applying the United States credit in relation to taxes paid to Indonesia, the rules set forth in Article 7 (Source of Income) shall be applied to determine the source of income, subject to such source rules in domestic law as apply solely for the purposes of limiting the foreign tax credit. 　　(2) In accordance with the provisions and subject to the limitations of the law of Indonesia, as in force from time to time, Indonesia shall allow to a resident of Indonesia as a credit against Indonesian tax the appropriate amount of income taxes paid to the United States. Such appropriate amount shall be based upon the amount of tax paid to the United States but shall not exceed the limitations provided by Indonesian law for the taxable year. For the purpose of applying the Indonesian credit in relation to taxes paid to the United States, the rules set forth in Article 7 (Source of Income) shall be applied to determine the source of income. ARTICLE 24 Non-discrimination 　　(1) A citizen of one of the Contracting States who is a resident of the other Contracting State shall not be subjected in that other Contracting State to more burdensome taxes or connected requirements than a citizen of that other Contracting State who is a resident therefore under the same conditions or circumstances. 　　(2) Except as provided in paragraph (4) of Article 11 (Dividends), a permanent establishment which a resident of one of the Contracting States has in the other Contracting State shall not be subject in that other Contracting State to more burdensome taxes or connected requirements than a resident of that other Contracting State carrying on the same activities. This paragraph shall not be construed as obliging a Contracting State to grant to individual residents of the other Contracting State any personal allowances, reliefs, or deductions for taxation purposes on account of civil status or family responsibilities which it grants to its own individual residents. 　　(3) A corporation of one of the Contracting States, the capital of which is wholly or partly owned or controlled by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which a corporation of the first-mentioned Contracting State carrying on the same activities, the capital of which is wholly owned or controlled by one or more residents of the first-mentioned Contracting State, is or may be subjected. 　　(4) Except where the provisions of paragraph (1) of Article 10 (Related Persons), paragraph 　　(5) of Article 12 (Interest), or paragraph (5) of Article 13 (Royalties) apply, interest, royalties, and other disbursements paid by a resident of a Contracting State to a resident of the other Contracting State shall, for the purposes of determining the taxable profits of the first-mentioned resident, be deductible under the same conditions (including rules governing the allowable debt to equity ratio) as if they had been paid to a resident of the first-mentioned State. Similarly, any debts of a resident of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of the first-mentioned resident, be deductible under the same conditions (including rules governing the allowable debt to equity ratio) as if they had been contracted to a resident of the first-mentioned State. 　　(5) For the purposes of this Article, the Convention shall apply, notwithstanding the provisions of Article 2 (Taxes Covered), to taxes of every kind imposed by a Contracting State. ARTICLE 25 Mutual Agreement Procedure 　　(1) Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Convention, he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph (1) of Article 24 (Non-discrimination), to that of the Contracting State of which he is a national. The case must be presented within three years of the first notification of that action. Where a combination of decisions or actions taken in both Contracting States results in taxation not in accordance with the provisions of the Convention, the three years begins to run only from the first notification of the most recent action or decision. 　　(2) The competent authority shall endeavor, if the objection appears to it to be justified and it is not itself able to arrive at an appropriate 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 not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits or other procedural limitations in the domestic law of the Contracting States. 　　(3) The competent authorities of the Contracting States shall endeavor to resolve by mutual agreement any difficulties arising as to the application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention. 　　(4) The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of this Article. When it seems advisable for the purpose of reaching agreement, the competent authorities may meet together for an oral exchange of opinions. ARTICLE 26 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 Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Article 1 (Personal Scope). 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 and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment, collection, or administration of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Convention. Such persons or authorities shall use the information only for such purposes. They 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 no t 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. 　　(3) If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall obtain the information to which the request relates in the same manner and to the same extent as if the tax of the first-mentioned State were the tax of that other State and were being imposed by that other State. If specifically requested by the competent authority of a Contracting State, the competent authority of the other Contracting State shall provide information under this Article in the form of depositions of witnesses and authenticated copies of unedited original documents (including books, papers, statements, records, accounts, and writings), to the same extent such depositions and documents can be obtained under the laws and administrative practices of that other State with respect to its own taxes. 　　(4) The exchange of information shall be either on a routine basis or on request with reference to particular case. The competent authorities of the Contracting States may agree on the list of information which shall be furnished on a routine basis. 　　(5) The competent authorities of the Contracting States shall notify each other of the publication by their respective Contracting States of any material concerning the application of this Convention, whether in the form of legislation, regulations, rulings, or judicial decisions by transmitting in the ensuing calendar year the texts of any such materials adopted in the course of any given calendar year. 　　(6) For the purposes of this Article, the Convention shall apply, notwithstanding the provisions of Article 2 (Taxes Covered), to taxes of every kind imposed by a Contracting State. ARTICLE 27 Diplomatic and Consular Officers 　　Nothing in this Convention shall affect the fiscal privileges of diplomatic and consular officials under the general rules of international law or under the provisions of special agreements. ARTICLE 28 General Rules of Taxation 　　(1) A resident of one of the Contracting States may be taxed by the other Contracting State on any income from sources within that other Contracting State and only on such income, subject to any limitations set forth in this Convention. For this purpose, the rules set forth in Article 7 (Source of Income) shall be applied to determine the source of income. 　　(2) The provisions of this Convention shall not be construed to restrict in any manner any exclusion, exemption, deduction, credit, or other allowance now or hereafter accorded- 　　(a) by the laws of one of the Contracting States in the determination of the tax imposed by that Contracting State, or 　　(b) by any other agreement between the Contracting States. 　　(3) Notwithstanding any provisions of this Convention except paragraph 　　(4), a Contracting State may tax a citizen or resident of that Contracting State as if this Convention had not come into effect. For this purpose the term "citizen" shall include a former citizen whose loss of citizenship had as one of the principal purposes the avoidance of tax but only for a period of ten years following such loss. 　　(4) The provisions of paragraph (3) shall not affect: 　　(a) the benefits conferred by a Contracting State under paragraph (3) of Article 10 (Related Persons), paragraph (3) of Article 21 (Private Pensions and Annuities), Articles 22 (Social Security Payments), 23 (Relief from Double Taxation), 24 (Nondiscrimination), and 25 (Mutual Agreement Procedure); and 　　(b) The benefits conferred by a Contracting State under Articles 18 (Government Service), 19 (Students and Trainees), 20 (Teachers and Researchers), and 27 (Diplomatic and Consular Officers), upon individuals who are neither citizens of, nor have immigrant status in, that Contracting State. 　　(5) The competent authorities of the Contracting States may each prescribe regulations necessary to carry out the provisions of this Convention. 　　(6) Except as provided in paragraph (7), a person (other than an individual) which is a resident of a Contracting State shall not be entitled under this Convention to relief from taxation in the other Contracting State unless: 　　(a) more than 50 percent of the beneficial interest in such person (or in the case of a company, more than 50 percent of the number of shares of each class of the company's shares) is owned, directly or indirectly, by any combination of one or more of: 　　(i) individuals who are residents of the United States; 　　(ii) citizens of the United States; 　　(iii) individuals who are residents of Indonesia; 　　(iv) companies as described in paragraph 7(a); and 　　(v) the Contracting States; and 　　(b) the income of such person is not used in substantial part, directly or indirectly, to meet liabilities (including liabilities for interest or royalties) to persons other than those enumerated in subparagraphs (a) (i) through (v). 　　(7) The provisions of paragraph (6) shall not apply if: 　　(a) the person is a company in whose principal class of shares there is substantial and regular trading on a recognized stock exchange; or 　　(b) the establishment, acquisition and maintenance of such person and the conduct of its operations did not have as a principal purpose the purpose of obtaining benefits under the Convention. 　　(8) For the purposes of paragraph 7(a), the term "a recognized stock exchange" means: 　　(a) the NASDAQ System owned by the National Association of Securities Dealers, Inc., and any stock exchange registered with the Securities and Exchange Commission as a national securities exchange for the purposes of the Securities Exchange Act of 1934; and 　　(b) the Jakarta stock exchange; and 　　(c) any other stock exchange agreed upon by the competent authorities of the Contracting States. ARTICLE 29 Assistance in Collection 　　(1) Each of the Contracting States shall endeavor to collect on behalf of the other Contracting State such taxes imposed by that other Contracting State as will ensure that any exemption or reduced rate of tax granted under this Convention by that other Contracting State shall not be enjoyed by persons not entitled to such benefits. The competent authorities of the Contracting States may consult together for the purposes of giving effect to this Article. 　　(2) In no case shall this Article be construed so as to impose upon a Contracting State the obligation to carry out administrative measures at variance with the regulations and practices of either Contracting State or which would be contrary to the first-mentioned Contracting State's sovereignty, security, or public policy. ARTICLE 30 Entry into Force 　　This Convention shall be subject to ratification and instruments of ratification shall be exchanged at Washington as soon as possible. It shall enter into force one month after the date of exchange of the instruments of ratification. The provisions shall for the first time have effect with respect to taxes withheld at source in accordance with Articles 11 (Dividends), 12 (Interest), and 13 (Royalties), for amounts paid or credited on or after the first day of the second month next following the date on which the Convention enters into force, and with respect to other taxes for calendar years or taxable years beginning on or after January 1 of the year in which this Convention enters into force. ARTICLE 31 Termination 　　This Convention shall remain in force until terminated by one of the Contracting States. 　　Either Contracting State may terminate the Convention at any time after 5 years from the date on which the Convention enters into force provided that at least 6 months' prior notice of termination has been given through diplomatic channels. In such event, the Convention shall cease to have force and effect as respects income of calendar years or taxable years beginning or, in the case of taxes payable at the source, payment made on or after January 1 next following the expiration of the 6-month period. 　　DONE at Jakarta, in duplicate, in the English language, this 11th day of July, 1988. For the Government of the 　　　　　　　　　　 For the Government of the United States of America:　　　　　　　　　　　Republic of Indonesia: GEORGE P. SHULTZ.　　　　　　　　　　　　　　　ALI ALATAS.