The Government of the Republic of India signed a revised Double Taxation Avoidance Agreement (DTAA) with the Government of the Republic of Indonesia on 27JUL12 at Hyderabad House, New Delhi. Shri. S. M. Krishna, Minister for External Affairs signed the revised DTAA on behalf of India and Dr. R. M. Marty M. Natalegawa, Indonesian Foreign Minister signed on behalf of Indonesia.
Details of the DTAA include:
1) giving taxation rights in respect to capital gains of a company to the source State
2) providing for rationalisation of the tax rates on dividend income, royalties, and fees for technical services in the source State up to 10%.
3) incorporating provisions for effective exchange of information as well as assistance in collection of taxes between tax authorities.
More generally, the agreement aims to provide tax stability to the residents of India and Indonesia and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between the two countries.