On December 28, 2016 the Japanese Ministry of Finance issued a press release announcing that on that same day the exchange of diplomatic notes between the Government of Japan and the Government of the Republic of Chile for entry into force of the Convention between Japan and the Republic of Chile for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance, which was signed on January 21, 2016, took place in Tokyo.
Based on Article 29 of the DTA (“ENTRY INTO FORCE”) the fact that the exchange of diplomatic notes between the Government of Japan and the Government of the Republic of Chile took place on December 28, 2016 means that the DTA entered into force on that same day.
Article 29,Paragraph 2 of the DTA subsequently arranges that the provisions of the Convention shall have effect:
(a) in Japan:
(i) with respect to taxes levied on the basis of a taxable year, for taxes for any taxable years beginning on or after January 1, 2017; and
(ii) with respect to taxes not levied on the basis of a taxable year, for taxes levied on or after January 1, 2017; and
(b) in Chile:
with respect to taxes on income obtained and amounts paid, credited to an account, put at the disposal or accounted as an expense, on or after January 1, 2017.
Article 29 Paragraph 3 of the DTA subsequently arranges that notwithstanding the provisions of paragraph 2, the provisions of Article 26 (“EXCHANGE OF INFORMATION”) shall have effect from the date of entry into force of this Convention without regard to the date on which the taxes are withheld at source or the taxable year to which the matter relates.
A further analysis of a selection of provisions as included in the Convention as well as a link to the text of the DTA can be found in our article from January 22, 2016.
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