Pajak Internasional

DDTC Academy
AGENDA
1 Introduction to tax treaty interpretation

2 Business profits (Art. 7)

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Definition and interpretation

Art. 3 Para. 2 OECD Model

Interpretation Issues?

Art 3 Para. 2 OECD Model: “…, any term not defined therein shall,
unless the context otherwise requires, have the meaning that it
has at that time under the law of that State…”

If no definition -> refer back to domestic law

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Definition and interpretation

Art 3 Para. 2 OECD Model: “…, any term not defined therein shall,
unless the context otherwise requires, have the meaning that it
has at that time under the law of that State…”

Domestic law at the Domestic law at the

time of concluding the or time of dispute?
tax treaties? (at any time)
(at that time)
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General Rule of Interpretation

Art 31 Vienna Convention on Law of Treaties (VCLT):

“A treaty shall be interpreted in good faith in accordance with the ordinary

meaning to be given to the terms of the treaty in their context and in the light of
its object and purpose.”
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General Rule of Interpretation

Art 31 Vienna Convention on Law of Treaties (VCLT):

• Context: mutual protocols, side letters, MoU’s, unilateral instruments

by the other party
• Subsequent agreements on application or interpretation
• Subsequent practice
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Example of interpretation issue

A Corp

US

INA
Pinjaman Rp 120 M
Pada tanggal 1/10/2000
Bunga dibayar per 6 bln SPT Tahun 2000
Rate 10%/tahun
Akru Biaya Bunga Rp 3M
(Rp 120 M x 3/12 x 10%)
Mana PPh
Psl 26 nya ???
PT INA Belum dipotong
PPh Psl 26 nya
Oleh PT INA
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Arguments

• Berdasarkan ketentuan Perjanjian Penghindaran Pajak Berganda (selanjutnya disebut sebagai

P3B) antara Indonesia-US, Indonesia baru mempunyai hak pemajakan atas bunga yang bersumber
dari Indonesia kepada resident USA pada saat bunga tersebut dibayarkan.

• Dasar yang dipakai oleh PT INA adalah Pasal 11 ayat (1) dari OECD Model (yang menjadi salah satu
model dari P3B) sebagai berikut ini:

“Interest arising in Contracting State and paid to a resident of the other Contracting State may be taxed
in that other State.”

• PT INA mengartikan kata ”paid” dalam OECD Model tersebut sebagai ”dibayar” atau ”cash basis”,
sehingga berkesimpulan bahwa pemajakan atas bunga kepada resident USA tersebut baru
terutang pada saat dibayarkan (cash basis).
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Analysis

• The term “paid” has a very wide meaning, since the concept of payment means the fulfilment of
the obligation to put funds at the disposal of the creditor in the manner required by contract or
by custom. (OECD MC art 11 note 5)
• The term ‘payment’ should be given a broad interpretation (para 5 MC Comm. Art. 11 (…)); the
description in the MC Comm., loc. cit. (‘the fulfilment of the obligation to put funds at the
disposal of the creditor in the manner required by contract or custom’), is still too narrow,
however, and should only be seen as an example. There is no reason not to apply Art. 11 if an
obligation to pay interest is settled, for example, by performance in kind or by the off-set of
amounts owed, whether according to the contract or not, as long as the creditor has agreed to
this type of compensation. ‘Payment’ is therefore the fulfilment of the claim to receive interest in
whatever form it may actually occur. (Vogel)
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Case law from India

• CIT v Vijay Breaking Corporation 261 ITR 331

▪ As per the OECD Commentary, the term “paid” in paragraph 1 of the article
concerning taxation of interest

▪ Article 11(2) of the Model Convention lays down nothing about the mode of taxation
in the State of source. This article does not deal with procedural aspects of tax
collection. It therefore leaves that State free to apply its own laws and, in particular,
to levy tax either by deduction at source or by individual assessment
Case Law: Interpretation of Income from International Shipping

PB menggunakan jasa pelayaran

berupa pengangkutan batubara dari
perusahaan pelayaran LN di Singapura
(Sing Ltd.). Sing Ltd turut menyediakan
awak kapal (fully equipped basis).
PB telah melakukan pemotongan PPh
Final Pasal 15 dengan tarif 2,64%
karena kegiatan pemberian jasa Sing
Ltd. di Indonesia berlangsung melebihi
90 hari dalam 12 bulan.

Namun, oleh Terbanding dilakukan koreksi objek PPh Pasal 26, karena keterlambatan
penerbitan SKD.

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Case Law: Interpretation of Income from International Shipping

Menurut Majelis Hakim:

▪ Majelis memperhitungkan SKD yang diterbitkan IRAS (walaupun terlambat) sehingga

P3B Indonesia-Singapura dapat digunakan;
▪ Sesuai Pasal 2 ayat (2) KMK No. 417/KMK.04/1996 juncto angka 2 SE Dirjen Pajak No. SE-
32/PJ.4/1996 diatur bahwa besarnya PPh Final bagi Wajib Pajak perusahaan pelayaran
luar negeri adalah sebesar 2,64% dari peredaran bruto yang melakukan usaha melalui
BUT di Indonesia;
▪ Kemudian, sesuai dengan Pasal 8 ayat (2) P3B Indonesia-Singapura diatur bahwa
penghasilan yang diperoleh perusahaan pelayaran luar negeri dari operasi pelayaran
jalur internasional, hak pemajakannya diberikan kepada negara sumber, tetapi pajaknya
diberikan pengurangan sebesar 50%;

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Case Law: Interpretation of Income from International Shipping

Menurut Majelis Hakim (lanjutan):

▪ Dalam menentukan ada atau tidak adanya BUT di Indonesia, Majelis berpendapat
bahwa tidak tepat hanya berpatokan pada time test yang telah melebihi 90 hari.
Dikarenakan dalam menentukan ada tidaknya BUT juga harus dibuktikan pula bahwa
jasa yang diberikan harus melalui suatu perusahaan yang bukan agen independen
sebagaimana diatur dalam Pasal 5 Ayat (7) P3B Indonesia-Singapura. Hal ini mengacu
pula pada kebijakan yang diterbitkan oleh Dirjen Perhubungan Laut Kementerian
Perhubungan RI bahwa perusahaan pelayaran asing yang mengadakan perjanjian
charter dengan perusahaan di Indonesia harus menunjuk agennya di Indonesia,
sehingga pelayaran asing tersebut mempunyai BUT di Indonesia dan terdaftar sebagai
Wajib Pajak.

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Case Law: Interpretation of Income from International Shipping

Komentar:

Keterlambatan penerbitan SKD tidak menghalangi pemberlakuan

ketentuan P3B, karena:

▪ P3B perangkat hukum yang lex specialis;

▪ Pasal 1 dan Pasal 3(1) P3B Ind-Singapur, yang berhak menerapkan
P3B adalah individual, company atau any other body of persons
yang terkena dampak pajak ganda;
▪ Menentukan subjek pajak: proven by taxpayer (SKD) atau proven
by tax authorities (melalui exchange of information);
▪ Prinsip effectiveness dan proportionality.

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Case Law: Interpretation of Income from International Shipping

Komentar:

Penentuan keberadaan BUT mengacu pada Pasal 5 P3B Ind-Singapura dan bukan
mengacu pada peraturan perundang-undangan pelayaran Indonesia:

▪ Dalam menentukan tarif pemotongan PPh (Pasal 15 atau 26), harus

menentukan kembali apakah terdapat BUT Sing Ltd. di Indonesia atau tidak
(Pasal 5 P3B Indonesia-Singapura).
▪ Persyaratan atau tes mengenai adanya BUT yang harus dipenuhi, sebelum
Indonesia selaku Negara Sumber Penghasilan dapat mengenakan pajak, adalah
untuk jenis penghasilan berupa “business profit” (Pasal 7 Ayat (1) P3B
Indonesia-Singapura).
▪ Sedangkan untuk jenis penghasilan berupa international shipping, Indonesia
selaku negara Sumber Penghasilan memiliki hak pemajakan terlepas dari
apakah Sing Ltd. memiliki BUT di Indonesia atau tidak.

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Case Law: Interpretation of Income from International Shipping

Komentar (lanjutan):

Penentuan keberadaan BUT mengacu pada Pasal 5 P3B Ind-Singapura dan bukan
mengacu pada peraturan perundang-undangan pelayaran Indonesia:

▪ Persyaratan pengujian BUT merupakan batasan minimum (bukan akumulasi)

yang harus dipenuhi, sebelum negara sumber penghasilan mengenakan pajak.
▪ Penunjukkan agen bagi perusahaan pelayaran asing tidak ditujukan untuk
tujuan perpajakan, sehingga PB tidak perlu membuktikan apakah BUT Sing Ltd.
memiliki agen yang bersifat dependend atau tidak, selama PB dapat
membuktikan pemberian jasa Sing Ltd. di Indonesia melebihi jangka waktu 90
hari dalam 12 bulan.

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Profits of an enterprise &
Permanent Establishment
Art 7(1) OECD MC: Business Profits

• The profits of an enterprise of a Contracting

State shall be taxable only in that State (…)

SECTION 1
• unless the enterprise carries on business in the
other Contracting State through a permanent
establishment situated therein.

SECTION 2
• If the enterprise carries on business as aforesaid,
the profits of the enterprise may be taxed in the
other State but only so much of them is
attributable to that permanent establishment
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Structure

• Meaning of ‘profits’

• Who is ‘Contracting State’ and ‘other Contracting State’

• Allocation rule (Section 1 of Art 7(1))

• Attribution of profits (Section 2 of Art 7(1))

• Role of PE

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Meaning of “Profits”

Interpretation
No definition in according to
Meaning of
the Model domestic laws
“profits”
Convention
Art 3 (2)

• Ketentuan perpajakan domestik setiap Negara yang mengadakan P3B dapat

mempunyai definisi yang berbeda

• Beberapa Negara mengatur bahwa setiap penambahan kemampuan

ekonomis merupakan penghasilan kena pajak (profits)

• Sedangkan di beberapa Negara lain, ‘profits’ merupakan salah satu jenis

penghasilan yang dikenakan pajak.

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Meaning of ‘profits’

• Commentary on art 7 (OECD MC 2010)

• 71. Although it has not been found necessary in the Convention to define the
term “profits”, it should nevertheless be understood that the term when used
in this Article and elsewhere in the Convention has a broad meaning
including all income derived in carrying on an enterprise.

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Meaning of ‘profits’

PT Indonesia

Indonesia • Profits has a broad meaning

Australia • Give rise to uncertainty…

• Dividends Art 10 or Art 7?

• Interest Art 11 or Art 7?

Dividend
Interest • Royalties Art 12 or Art 7?
Royalties

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Meaning of ‘profits’

• Art 7 (4) OECD MC

• Where profits include items of income which are dealt with
separately in other Articles of this Convention, then the
provisions of those Articles shall not be affected by the
provisions of this Article.

Lex specialis [other Articles] derogat legi

generali [Art 7:Business profits]

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Meaning of ‘profits’

Article 7

Article 7(4)

Article 10, 11, 12

Reference back to
Art 7

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What is Contracting State and other Contracting State?

• Contracting State = shall be

PT Indonesia taxable only
• Who is Contracting State?

Indonesia
• Other Contracting State =
Australia may be taxed
• Who is other Contracting
State?

Carries on
business

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What is Contracting State and other Contracting State?

• The profits of an enterprise of a Contracting State [INDONESIA] shall

be taxable only in that State (…)

• unless the enterprise carries on business in the other Contracting

State [AUSTRALIA] through a permanent establishment situated
therein.

• If the enterprise carries on business as aforesaid, the profits of the

enterprise may be taxed in the other State [AUSTRALIA] but only so
much of them is attributable to that permanent establishment

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Art 7(1) Section 1 – Allocation rule

Residence State Source State

(INDONESIA) (AUSTRALIA)

PE
Enterprise
(Carries on
(PT INDONESIA)
business)

MAIN RULE: EXCEPTION:

Taxation only in the Unless PE

Residence State
Threshold that must be passed before
Source State is allowed to tax a foreign
enterprise on profits from activities in
its territory

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Art 7(1) Section 2 – Attributable profits

Residence State Source State

(INDONESIA) (AUSTRALIA)

PE
Enterprise
(Carries on
(PT INDONESIA)
business)

PE Profits may be taxed

Article 23
Double Taxation Relief Only as much attributable
to PE

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Art 7(1) Section 2 – Attributable profits

OECD MODEL UN MODEL : Force of attraction

ENTERPRISE ENTERPRISE

STATE A

STATE B Profits
attributable
to sales of
Similar activities products in Sales of
State B
products

Profits
PE
attributable Profits
PE Profits
to attributable
attributable
to similar
to
activities

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Art 7(1) Role of PE

Residence State Source State

(INDONESIA) (AUSTRALIA)

PE
Enterprise
(Carries on
(PT INDONESIA)
business)

Art 7 (1): Source

Art 5: Definition
State May Tax if Art 7: Allocation
of permanent
business activity rule
establishment
constitute a PE

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