MINISTRY OF FINANCE OF THE REPUBLIC OF INDONESIA DIRECTOR GENERAL OF TAXES REGULATION NUMBER PER-10/PJ/2017 CONCERNING

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1 MINISTRY OF FINANCE OF THE REPUBLIC OF INDONESIA DIRECTOR GENERAL OF TAXES REGULATION NUMBER PER-10/PJ/2017 CONCERNING THE APPLICATION PROCEDURE OF DOUBLE TAXATION CONVENTION DIRECTOR GENERAL OF TAXES, Considering : a. that the provision concerning the application procedure of double taxation convention was previously regulated on Director General of Taxes Regulation Number PER- 61/PJ/2009 concerning the Application Procedure of Double Taxation convention as amended by Director General of Taxes Regulation Number PER-24/PJ/2010; b. that the provision concerning the prevention of abuse on the double taxation convention was previously regulated in Director General of Taxes Regulation Number PER- 62/PJ/2009 concerning the Prevention of Abuse of Double Taxation convention as amended by Director General of Taxes Regulation Number PER-25/PJ/2010; c. that based on Article 32A of Law Number 7 year 1983 concerning Income Tax as lastly amended by Law Number 36 year 2008, it is stipulated that Government is authorized to conclude an agreement with the government of foreign countries in the context of avoidance of double taxation and prevention of tax evasion; d. that based on Article 24 paragraph (2) of Government Regulation Number 94 year 2010 concerning the Calculation of Taxable Income and the Settlement of Income Tax Payables in the Current Year, it is necessary to amend the provision concerning the application procedure of double taxation convention;

2 - 2 - Application Procedure of Double Taxation Convention as amended by Director General of Taxes Regulation Number PER-24/PJ/2010 and Director General of Taxes Regulation Number PER-62/PJ/2009 concerning the Prevention of Abuse of Double Taxation Convention as amended by Director General of Taxes Regulation Number PER-25/PJ/2010 shall be amended; f. that based on consideration set forth at point a, point b, point c, point d, and point e, it is necessary to decree the Director General of Taxes Regulation concerning the Application Procedure of Double Taxation Convention; In view of : 1. Law Number 6 year 1983 concerning General Provisions and Taxation Procedures (State Gazette of the Republic of Indonesia Number 49 year 1983, Supplementary to State Gazette of the Republic of Indonesia Number 3262) as lastly amended by Law Number 16 year 2009 (State Gazette of the Republic of Indonesia Number 62 year 2009, Supplementary to State Gazette of the Republic of Indonesia Number 4999); 2. Law Number 7 year 1983 concerning Income Tax (State Gazette of the Republic of Indonesia Number 50 year 1983, Supplementary to State Gazette of the Republic of Indonesia Number 3263) as lastly amended by Law Number 36 year 2008 (State Gazette of the Republic of Indonesia Number 133 year 2008, Supplementary to State Gazette of the Republic of Indonesia Number 4893); 3. Government Regulation Number 94 year 2010 concerning the Calculation of Taxable Income and the Settlement of Tax Payables in the Current Year (Supplementary to State Gazette of the Republic of Indonesia Number 5183); 4. Minister of Finance Regulation Number 12/PMK.03/2017 concerning Income Tax Withholding and/or Collecting Slip (State News of the Republic of Indonesia Number 248 year

3 - 3 - Stipulating : DIRECTOR GENERAL OF TAXES REGULATION CONCERNING THE APPLICATION PROCEDURE OF DOUBLE TAXATION CONVENTION. CHAPTER I GENERAL PROVISIONS Article 1 In this Director General Regulation, the meaning of: 1. Income Tax Law, hereinafter referred to ITL, is Law Number 7 year 1983 concerning Income Tax as lastly amended by Law Number 36 year Double Taxation Convention, hereinafter referred to DTC, is the agreement between Indonesian Government and other Contracting Government or Contracting Jurisdiction for the avoidance of double taxation and the prevention of tax evasion. 3. Treaty Benefit is any benefit inside the DTC, which can be the tax rate lower than the rate as prevailed in the ITL or the tax exemption in the source country. 4. Non-Resident Taxpayer, hereinafter referred to NRT, is a nonresident tax subject as referred to in the ITL that receive and/or earn income sourced from Indonesia through or other than through the permanent establishment in Indonesia. 5. Withholding Agent is a governmental body, resident tax subject, event organizer, permanent establishment, or other representative office of foreign company, which is obliged to withhold tax on income received and/or earned by NRT. 6. Certificate of Domicile of Non-Resident Taxpayer, hereinafter referred to CoD NRT, is a DGT-1 Form or DGT-2 Form, filled by Non-Resident Taxpayer, and certified by the Competent Authority from Contracting Country or Contracting Jurisdiction in order to implement the DTC. 7. Certificate of Residence is a certificate in any name and any

4 - 4 - Authority from Contracting Country or Contracting Jurisdiction. 8. The Officer who have the authority to certify CoD NRT or Competent Authority, hereinafter referred to the Authorized Officer is the officer who has the authority to certify the CoD NRT and/or Certificate of Residence under the domestic law of Contracting Country or Contracting Jurisdiction. 9. Custodian is an institution that has received approval from the competent authority in Indonesia to provide custodial services for securities and other securities-related assets and other services, including receiving dividend, interests, and other rights, conducting the settlement of securities transactions, and representing account holders who become their clients. 10. Agent is an individual or an entity acted as an intermediary and acted for or on behalf of another party. 11. Nominee is an individual or an entity that legally owns assets and/or income (legal owner) for the benefit of or under on the mandate of the party who actually owns the assets and/or the party who actually enjoy the benefit of income. 12. Conduit is a company who entitles the Treaty Benefit from income arise in Indonesia, while economic benefit from that income is owned by an individual or an entity in other country who will not entitle the Treaty Benefit if that income is received directly. CHAPTER II WITHHOLDING TAX OBLIGATION Article 2 (1) Withholding Agent shall withhold tax in accordance with the provisions stipulated in the ITL on income received or earned by NRT. (2) There shall be excluded from the provision as referred to in

5 - 5 - a. there is a difference between the provisions stipulated in the ITL and the provisions stipulated in the DTC; b. income recipient is not an Indonesian resident tax subject; c. income recipient is an individual or an entity, which is a resident tax subject of Contracting Country or Contracting Jurisdiction; d. NRT submit the CoD NRT that have qualified the administrative requirements and other specific requirements; e. there is no treaty abuse; and f. income recipient is a beneficial owner, in case stipulated in the DTC. CHAPTER III THE PROCEDURE OF WITHOLDING AND/OR COLLECTING AND REPORTING TAX Article 3 (1) Withholding Agent shall make a withholding tax slip in accordance with the regulation concerning the tax withholding and/or collecting slip. (2) In case there is an income received or earned by NRT however there is no withholding tax for income received or earned in accordance with the provisions stipulated in the DTC, Withholding Agent still shall make a withholding tax slip. Article 4 (1) Withholding Agent shall file the CoD NRT that have qualified the administrative requirements and other specific requirements as referred to in Article 2 paragraph (2) point d as an annex of a Monthly Tax Return for the period of an income tax is payable. (2) In case of Withholding Agent fail to file the CoD NRT as

6 - 6 - b. Withholding Agent shall withhold tax in accordance with the provisions stipulated in the ITL. (3) CoD NRT as referred to in paragraph (1) may be filed electronically in accordance with the applicable regulations. CHAPTER IV WITHHOLDING TAX REFUND Article 5 (1) In case: a. there is a mistake in the implementation of the DTC; or b. CoD NRT is filed after Withholding Agent filed a Monthly Tax Return for the period a tax is payable, Treaty Benefit still shall be entitled to NRT through refund mechanism of excessive tax payment that should not payable. (2) Treaty Benefit as referred to in paragraph (1) shall not be entitled in case there is a treaty abuse. (3) CoD NRT as referred to in paragraph (1) point b shall fulfill the administrative requirements as referred to in Article 6 paragraph (1) point a, point b, point c, point d, and point e and shall fulfill other specific requirements as referred to in Article 8. (4) In case NRT receiving or earning income sourced from Indonesia: a. does not obtain Treaty Benefit; and b. Withholding Agent fail to file a Monthly Tax Return for the period an income tax is payable, Treaty Benefit still can be entitled to NRT through Mutual Agreement Procedure (MAP) mechanism. CHAPTER V CERTIFICATE OF RESIDENCE OF NON-RESIDENT TAXPAYER THAT FULFILL ADMINISTRATIVE REQUIREMENTS

7 - 7 - a. using DGT-1 Form or DGT-2 Form; b. being filled out correctly, completely; and clearly; c. being signed or given an equal mark as a signature according to the prevalence in the Contracting Country or Contracting Jurisdiction; d. being authorized with a signature or an equal mark as a signature by the Competent Authority according to the prevalence in the Contracting Country or Contracting Jurisdiction; e. being used in the period as stated in the CoD NRT; and f. being filed by Withholding Agent concurrently with the filing time of a Monthly Tax Return, no later than the due date of a Monthly Tax Return submission for the tax period a tax is payable. (2) The signature mark given by the Competent Authority as referred to in paragraph (1) point d is filled out in Part III DGT- 1 Form or Part III DGT-2 Form. (3) The signature mark as referred to in paragraph (2) could be replaced by Certificate of Residence that shall fulfill these following requirements: a. written in English; b. in the form of original or copied document legalized by the Tax Office in which one of the Withholding Agent is registered as a Taxpayer; c. at least stating information of NRT s name, the issuance date, and the taxable year the Certificate of Residence shall come into force; and d. stating the name of the Authorized Officer and being signed or given an equal mark as a signature according to the prevalence in the Contracting Country or Contracting Jurisdiction. (4) In case NRT uses the Certificate of Residence as referred to in paragraph (3), NRT shall fill out DGT-1 Form other than Part III or DGT-2 Form other than Part III.

8 - 8 - (6) DGT-1 Form or DGT-2 Form is in the form as stipulated in annex of this Director General Regulation. Article 7 (1) DGT-1 Form shall be used by NRT who shall not use DGT-2 Form. (2) DGT-2 Form shall be used by: a. NRT receiving and/or earning income through the Custodian in respect of income from transfer of shares or bonds traded or reported in the Indonesian stock exchange, other than interest and dividend; b. Bank NRT; or c. NRT in the form of pension funds. CHAPTER VI CERTIFICATE OF DOMICILE OF NON-RESIDENT TAXPAYER THAT FULFILL OTHER SPECIFIC REQUIREMENTS Article 8 CoD NRT fulfill the other specific requirements as referred to in Article 2 paragraph (2) point d in case: a. for NRT using DGT-1 Form, stating in the second page of the form that he has: 1. relevant economic motives related to the establishment of the entity; 2. business activities managed by its own management and has sufficient authority to carry out the transactions; 3. fixed assets and non-fixed assets, sufficiently enough to carry out business activities in the Contracting Country or Contracting Jurisdiction other than assets that generate income from Indonesia; 4. sufficient employees with enough expertise in line with the business sector; and 5. activities or other active business other than only

9 - 9 - b. for NRT using DGT-1 Form and acting as beneficial owner based on the DTC, in addition to the fulfillment of the provisions as referred to in point a, he shall also state in the third page of the form that: 1. for an Individual NRT, NRT shall not act as an agent or nominee; or 2. for an entity NRT, NRT shall not act as an agent, nominee, or conduit and shall fulfill these requirements: a) have control to use or to enjoy the funds, assets, or rights that generate income from Indonesia; b) no more than 50% of income is used to fulfill the obligations to the other party; c) assume risks from its own assets, capitals, and/or obligations; and d) do not have written or unwritten obligations to provide a part or all of the income from Indonesia to other party; and c. for NRT using DGT-2 Form, NRT shall state in Part II of the form that NRT: 1. is a tax subject in the Contracting Country or Contracting Jurisdiction based on the tax law in that Country; and 2. shall not act as an agent, nominee, or conduit for the income received, in case NRT is required by DTC as the beneficial owner. CHAPTER VII TREATY ABUSE Article 9 (1) Treaty Abuse as referred to in Article 2 paragraph (2) point e occurs in case one or all of the main purpose of the transaction arrangement is to obtain the Treaty Benefit and contrary to the object and purpose of the DTC. (2) Treaty Abuse as referred to in paragraph (1) shall not occur in

10 b. legal form is similar to economic substance in the establishment of the entity or implementation of the transaction; c. business activities managed by its own management and has sufficient authority to carry out the transactions; d. fixed assets and non-fixed assets, sufficiently enough to carry out business activities in the Contracting Country or Contracting Jurisdiction other than assets that generate income from Indonesia; e. sufficient employees with enough expertise in line with the business sector; and f. activities or other active business other than only receiving income from dividend, interest, and/or royalty from Indonesia. (3) Activities or other active business as referred to in paragraph (2) point f is the activities or active business undertaken by NRT in actual circumstances indicated by costs incurred, efforts made, or sacrifices incurred that related directly with the business or activity in order to obtain, collect, and maintain income, including significant activities undertaken by NRT to maintain the continuity of the entity. (4) In case there is a difference between the legal form and the economic substance in the structure/scheme of a transaction, the tax treatment is applied according to the applicable regulations based on its economic substance (substance over form) as referred to in Article 9 paragraph (2) point a. CHAPTER VIII BENEFICIAL OWNER Article 10 (1) NRT that fulfill the requirements as Beneficial Owner as referred to in Article 2 paragraph (2) point f in case: a. for an Individual NRT, NRT shall not act as an agent or

11 have control to use or to entitle the funds, assets, or rights that generate income from Indonesia; 2. no more than 50% of the income of the entity is used to fulfill the obligations to the other party; 3. assume risks from its own assets, capitals, and/or obligations; and 4. do not have written or unwritten obligations to provide a part or all of the income from Indonesia to other party. (2) The income of the entity as referred to in paragraph (1) point b number 2 is all of NRT income in any names, any forms, and any sources in accordance with NRT s non-consolidated financial statements. (3) To determine the value of 50% of income used to fulfill the obligations as referred to in paragraph (1) point b number 2, there shall not include: a. compensation to employees fairly provided in the employment; b. other expenses commonly incurred in carrying out NRT business; and c. profit sharing in the form of dividend to the shareholders. CHAPTER IX OTHER PROVISIONS Article 11 (1) In case an income recipient is a Government of Contracting Country or Contracting Jurisdiction, a Central Bank, or certain Institution whose names are explicitly stated in the DTC or are agreed by Indonesian Tax Authorities and Tax Authorities in the Contracting Country or Contracting Jurisdiction, the DTC could be applied without using the DGT-1 Form or DGT-2 Form. (2) The income recipient as referred to in paragraph (1) shall file

12 Jurisdiction that stated the income recipient is a party that could be exempted from tax in source country on certain income based on the DTC. (3) Certificate of Residence or notification letter as referred to in paragraph (2) could be used for the tax year stated in that Certificate of Residence. Article 12 To be able to implement the provisions stipulated in the DTC other than the provision of income withholding tax, NRT shall file Certificate of Residence that fulfill the requirements as referred to in Article 6 paragraph (3) to the Tax Office whose working area covers the residence, the place of business, or the place of domicile of NRT in Indonesia. CHAPTER X TRANSITIONAL PROVISIONS Article 13 At the time of this Director General Regulation come into force: 1. while the authorized Certificate of Residence based on Director General of Taxes Regulation Number PER-61/PJ/2009 concerning the Application Procedure of Double Taxation Convention as amended by Director General of Taxes Regulation number PER-24/PJ/2010 has not been expired, it still could be used until the expiration date; 2. Director General of Taxes Regulation Number PER- 61/PJ/2009 concerning the Application Procedure of Double Taxation Convention as amended by Director General of Taxes Regulation number PER-24/PJ/2010 shall be revoked and declared no longer valid; and 3. Director General of Taxes Regulation number PER- 62/PJ/2009 concerning the Prevention of Abuses on Double Taxation Convention as amended by Director General of Taxes

13 CHAPTER XI CLOSING PROVISIONS Article 14 This Director General Regulation shall come into force on 1 August Approved in Jakarta On 19 June 2017 DIRECTOR GENERAL OF TAXES, Signed KEN DWIJUGIASTEADI NIP

14 ANNEX OF DIRECTOR GENERAL OF TAXES REGULATION NUMBER PER-10/PJ/2017 CONCERNING THE APPLICATION PROCEDURE OF DOUBLE TAXATION CONVENTION A. Provisions for Withholding Agent and Custodian. 1. Withholding Agent shall withhold taxes on any income received or earned by NRT in accordance with the provisions stipulated in the ITL. 2. Withholding Agent shall make withholding tax slip in accordance with prevailing provisions and procedures and shall be filed to the NRT. 3. Withholding Agent still shall make withholding tax slip even if there is no tax withheld by stating the amount of gross income and stating NIHIL in the column of income tax withheld. The withholding tax slip shall not be filed to the NRT. 4. Withholding Agent shall file a Monthly Tax Return with an attachment of a copy of legalized CoD NRT and withholding tax slip to the Tax Office. 5. Withholding Agent shall ensure that NRT has fulfilled the requirements as referred to in Article 2 paragraph (2) of this Director General of Taxes Regulation to be able to implement the provisions in the DTC. Withholding Agent shall ensure the fulfillment of the requirements by verifying the CoD NRT submitted by NRT. 6. Verification on the CoD NRT (DGT-1 Form or DGT-2 Form) to ensure that the income recipient is not Indonesian resident tax subject shall be performed by Withholding Agent. In case that the income recipient is an Indonesian resident tax subject, Withholding Agent shall withhold tax payables in accordance with the provisions stipulated in the ITL. The existence of Indonesian resident tax subject for DGT-1 Form is determined by: 1) in Part V point 3 stating that NRT s address is in Indonesia; or 2) in Part V point 6 stating that NRT has a permanent residency in Indonesia; or 3) in Part V point 7 stating that NRT s residence is in Indonesia; or

15 Withholding Agent shall verify whether one or all of the main purposes of the transaction or the arrangement of transaction s scheme (arrangement) is to obtain Treaty Benefit and contrary to the object and purpose of the DTC by ensuring whether CoD NRT DGT-1 Form stating the answer: 1) Yes in Part V Point 4; or 2) Yes in Part VI Point 5. DTC shall not be applied in case one of the answers from NRT receiving the income is as in the point 1) or 2) above. 8. Withholding Agent shall verify whether or not there is an abuse of the DTC by ensuring whether CoD NRT stating the answer No for one or all of the questions from Point 7 to Point 10 in Part VI. The DTC shall not be applied in case one or all of the answers from NRT receiving income is No. 9. Withholding Agent shall verify whether NRT is beneficial owner as required in the DTC by ensuring whether CoD NRT DGT-1 Form stating the answer: 1) Yes in Part V Point 5; or 2) Yes in Part VII Point 1; or 3) No for one or all of the questions in Part VII Point 2 to Point 4; or 4) Yes in Part VII Point 5. DTC shall not be applied in case one or all of the answer from NRT receiving income is as in the point 1), 2), 3), or 4) above. 10. In case NRT receiving income is a Government of Contracting Country or Contracting Jurisdiction, a Central Bank, or certain Institution whose names are explicitly stated in the DTC or are agreed by Indonesian Tax Authorities and Tax Authorities in the Contracting Country or Contracting Jurisdiction, Withholding Agent shall ensure that the institution is the institution referred in the DTC by verifying the CoD NRT and/or Certificate of Residence and/or notification letter with the requirements as referred to in Article 11 of this Director General Regulation. 11. For tax withheld in respect of income from transfer of shares or bonds traded or reported in the Indonesian stock exchange, other than interest and dividend received or earned by NRT through the Custodian: a. DGT-2 Form shall be completely filled and signed or given an equal mark as a signature according to the prevalence in the Contracting Country or Contracting Jurisdiction, and shall be certified with a signature or an

16 b. The original DGT-2 Form shall be submitted to the Custodian by NRT receiving income; c. The Custodian shall file the valid original DGT-2 Form received from the NRT to the Withholding Agent; d. In case NRT receiving the income receive income from many sources, the Custodian could make a copy of the first page of DGT-2 Form and request a legalization to the Head of the Tax Office in which the Custodian is registered as a Taxpayer; e. The Head of the Tax Office legalizing the copy of the first page of DGT-2 Form shall administer 1 (one) sheet of that legalization in the Tax Office, and the original DGT-2 Form shall be returned to the Custodian; f. In case there is a necessity for the implementation of Taxpayer compliance supervision, tax audit, preliminary tax investigation, tax investigation, tax objection, tax correction, tax deduction or annulment of administrative penalties, deduction or annulment of incorrect notice of tax assessment, or deduction or annulment of incorrect notice of tax collection, the Custodian shall file the original DGT-2 Form in accordance with the applicable tax laws; g. Withholding Agent shall withhold taxes in accordance with the provisions stipulated in the DTC based on the valid DGT-2 Form or the legalized copy of the GDT-2 Form filed by the Custodian and the Custodian shall keep the copy of the DGT-2 Form; h. Withholding Agent shall make withholding tax slip and shall file it to NRT through the Custodian. 12. For tax withheld from income received or earned by bank NRT and NRT in the form of pension fund: a. DGT-2 Form shall be completely filled and signed or given an equal mark as a signature by NRT according to the prevalence in the Contracting Country or Contracting Jurisdiction, and also shall be certified with a signature or an equal mark as a signature by the Competent Authority according to the prevalence in the Contracting Country or Contracting Jurisdiction; and b. The original DGT-2 Form shall be submitted by NRT to the Withholding Agent.

17 Withholding Agent shall withhold tax payables in accordance with the provisions stipulated in the ITL. 14. CoD NRT and Certificate of Residence shall be kept by Withholding Agent in accordance with the applicable tax laws. B. The administration of CoD NRT by the Tax Office. 1. The officer receiving the Monthly Tax Return shall verify the completeness of the Monthly Tax Return of Withholding Agent that at least shall be annexed with withholding tax slip and a copy of legalized CoD NRT. 2. The Head of Tax Office verify the correctness of the amount of tax withheld by matching the copy of legalized CoD NRT with the name of NRT stated in the withholding tax slip. 3. In case Withholding Agent does not fulfilled its obligations pursuant to the provisions stipulated in this Director General Regulation, the Head of the Tax Office shall follow up in accordance with the applicable regulations. 4. In case there is an information in the CoD NRT indicating the existence of NRT s permanent establishment in Indonesia, the Tax Office shall send the information to the authorized Tax Office to verify the correctness of the information or to follow up the information in accordance with the applicable regulations. 5. The CoD NRT and withholding tax slip filed by Withholding Agent shall be recorded and administrated in accordance with the applicable regulations.