The Indonesian government has officially ratified the new tax treaty (Perjanjian Penghindaran Pajak Berganda/P3B) between Indonesia and the United Arab Emirates.
The ratification of the new tax treaty between Indonesia and the United Arab Emirates is outlined in the Presidential Regulation of the Republic of Indonesia No. 34 of 2021 concerning Ratification of the Agreement between the Government of the Republic of Indonesia and the Government of the United Arab Emirates for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (Pres. Reg. 34/2021).
The tax treaty has been renewed to improve bilateral relations between Indonesia and the United Arab Emirates, specifically, cooperation in the economic sector. On another note, the tax treaty has also been updated to adapt to the latest developments in international tax standards.
The Indonesian and United Arab Emirates governments reached an agreement in a negotiation for the renewal of the Tax Treaty on 24 July 2020 in Bogor. The new tax treaty will replace the tax treaty between Indonesia and the United Arab Emirates signed on 30 November 1995.
The changes listed in the new tax treaty include the addition of Article 12A which stipulates fees for technical services.
A copy of the original text of the tax treaty between the Governments of Indonesia and the United Arab Emirates, both in Indonesian and in English, is attached in Pres. Reg. 34/2021.