Indonesia has just signed new Double Tax Treaty Agreement with North Korea and Mexico and has amended an existing DTA with Malaysia.
According to a Citibank Global Securities Services alert, as of January 1, 2005, DTAs with The Democratic People’s of Republic of Korea and Mexico came into effect. With this firmly in place, the rates of withholding for the branch profit tax, dividends, interest and royalties in both nations are set at 10%.
The release said nothing about actually taxing profits in a country that does not support a free market economy.
At the same time, the DTA between Indonesia and Malaysia was amended so that the rates of withholding tax on dividends, interests, and royalties will be reduced to 10% (under the existing DTA the rates are 15%).