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Japan Tax Convention Update

Japan:Inbound Tax Alert November 2016, No.17

Japan has been active in negotiating tax treaties in the latter half of 2016 and has recently concluded amendments to its convention with Belgium and a newly signed agreement with Slovenia. In addition, a revised treaty signed with Germany and a protocol to the existing Japan-India treaty both entered into force this October. (Japan:Inbound Tax Alert November 2016, No.17)

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Japan has been actively engaged in revising/negotiating tax treaties in the latter half of 2016 and recently has amended its treaty with Belgium and a signed a new agreement with Slovenia. In addition, a revised treaty signed with Germany and a protocol to the existing treaty with India treaty entered into force in October 2016. Japan also has agreed, in principle, on a new convention with Austria, and is engaged in active negotiations with Kenya and Kyrgyzstan. Japan’s new treaties evidence a similar pattern of reduced withholding tax rates to encourage cross-border investment, strengthened anti-avoidance measures in line with the OECD BEPS initiative, and recognition of internal dealings between a corporation’s head office and its permanent establishment (PE) using the arms length principle in accordance with the Authorized OECD Approach (AOA) to attribution of income.

This alert highlighhts a summary of Japan's recently signed tax treaties with some of the key updates and some notable provisions. 

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