(December 19, 2014)

On December 17, 2014 the Japanese Ministry of Finance issued a press release announcing that the Government of Japan and the Government of the State of Qatar agreed in principle on the Agreement between the Government of Japan and the Government of the State of Qatar for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income.

Based on the press release the key points of the DTA to be concluded are:

 

  1. The draft Agreement provides that, in principle, profits resulting from the business activities of enterprises may be taxed in the source country to the extent that the profits are attributable to a permanent establishment situated therein.
  2. Taxation on investment income (dividends, interest and royalties) in the source country will be reduced as follows.
    1. Dividend payments made from a subsidiary to its parent company residing in the other State are limited to 5% if the shareholder requirement of 10% is met, and 10% in all other cases.
    2. On interest payments made to the Government and certain governmental organizations of the other jurisdiction no withholding taxes are allowed to be withheld. In all other cases the DTA limits the withholding taxes to be withheld over interest payments to 10%;
    3. The DTA limits the withholding taxes over royalty payments to 5%.
  3. A framework of mutual agreement for dispute resolution for tax matters between the tax authorities of the two countries will be put in place.
  4. Provisions for the exchange of information regarding tax matters between the tax authorities of the two countries will be put in place.

For further information click here to be forwarded to the press release as issued by the Japanese Ministry of Finance in this respect.

 

 


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