07.04.06

Seychelles Double Taxation Agreement with Indonesia

Posted in Double Taxation Agreements at 3:23 pm by Robert Klien

In March, 2006, Indonesia threatened to abrogate its Double Tax Avoidance Agreement (DTAA) with the Seychelles because of round-tripping * Indonesian companies do. In response, the Seychelles Association of Offshore Practitioners and Registered Agents (SAOPRA) claimed Indonesia had no legal grounds to act in such a way at least until 2010 as far as Article 29 of the Indonesia/ Seychelles DTA is legally valid and cannot be ended until at least 2010. Accordingly, DTA is still in force.

If persons using Seychelles tax resident companies hold shares in Indonesian companies , conduct no activities in Indonesia and have a permanent establishment in Seychelles, these Seychelles companies can lawfully access and rely on the DTA benefits.

* round-tripping – a phenomenon of moving funds to & from – funds are brought out of the country and then brought back from offshore in the form of FDI.

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