Recently Directorate General of Taxation Republic Indonesia issued a very important regulatory practices related to taxation of economic transactions between countries (international taxation), which PER-62/PJ./2009 dated 5 November 2009 towards Prevention of Abuse of Avoidance of Double Taxation (Tax Treaty). This provision is very important to know by the taxpayers especially those with economic transactions between countries that have no tax problems on later.

But before discussing more about these conditions, it will be explained a bit about the terminology contained in these provisions in order to obtain the same perception for the reader.
1.	Foreign Taxpayers are foreign tax subjects, receiving and / or obtain income derived from Indonesia via PE / BUT in Indonesia.
2.	Agent (agent) is a person or entity acting as an intermediary reply and take action for and/ or on behalf of other parties.
3.	Nominee is a person or entity has a legally (legal owner) of a property and / or income for the benefit or under the mandate of the truth becomes the property owner and / or parties enjoy the benefits of truthfulness on income.
4.	Beneficial Owner / owner of the truth of the economic benefits of income is the income recipient:
	a.	Acting as no Agent;
	b.	To act not as a nominee; and
	c.	No Conduit Company (some firms benefit from a connection with the earnings P3B rather in other countries, while the economic benefits of such income possessed by the people in other countries will not be able to reply the right to use Tax Treaty/ P3B if such income is received directly).
5.	Domestic taxpayers are:
	a.	An individual residing in Indonesia for more than 183 (one hundred and eighty three) days within a period of 12 (twelve) months, or a private person in a fiscal year in Indonesia and have the intention to place live in Indonesia;
	b.	body established or domiciled in Indonesia, except for certain units of government agencies that meet the criteria:
		1)	formation based on the provisions of legislation;
		2)	funding sourced from the Budget or the State Budget of the Region;
		3)	acceptance included in the budget or the Central Government Local Government; or
		4)	books reviewed by the state functional monitoring .apparatus.
Abuse of Tax Treaty
Imposition of tax rates as stipulated in the tax treaty between Indonesia and partner countries will be ignored / not used in the event of abuse of the provisions of Tax Treaty by a taxpayers. Some abuse of Tax Treaty as mentioned in the new regulations are:
1.	Transaction has no economic substance is done by using structures / schemes in such a way with a view solely to benefit Tax Treaty / P3B;
2.	Transactions with the structure / scheme of legal format (legal form) is different with its economic substance (economic substance) in such a way with the intention solely to obtain benefits Tax Treaty/ P3B; or
3.	Recipients of income is not an owner of the truth of the economic benefits from the income (beneficial owner).