On November 27, 2018 the exchange of diplomatic notes between the Government of Japan and the Government of the Kingdom of Denmark for entry into force of the Convention between Japan and the Kingdom of Denmark for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance (which was signed on October 11, 2017) (Hereafter: the DTA) took place in Copenhagen.

 

Based on Article 30, Paragraph 1 of the DTA (“ENTRY INTO FORCE”) the fact that the exchange of diplomatic notes took place on November 27, 2018 means that the DTA entered into force on December 27, 2018.

 

Based on Article 30, Paragraph 2 of the DTA the fact that the DTA entered into force on December 27, 2018 means that the provisions of the DTA shall have effect:

(a)  with respect to taxes levied on the basis of a taxable period, for taxes for any taxable periods beginning on or after January 1, 2019; and

(b)  with respect to taxes levied not on the basis of a taxable period, for taxes levied on or after January 1, 2019.

 

With respect to mutual agreement procedures, Article 30, Paragraph 3 of the DTA arranges that the provisions of paragraph 2 and paragraph 5 of Article 24 (“MUTUAL AGREEMENT PROCEDURE”) shall have effect:

(i)   with respect to cases presented pursuant to paragraph 1 of that Article on or after the date to be agreed between the Governments of the Contracting States through an exchange of diplomatic notes; and

(ii)  with respect to cases presented pursuant to paragraph 1 of that Article before that date. In this case, no unresolved issues of such case shall be submitted to arbitration before two years have elapsed from that date.

 

With respect to the exchange of information (Article 25 of the DTA) and the assistance in the collection of taxes (Article 26 of the DTA) Article 30, Paragraph 4 of the DTA arranges that the provisions of Articles 25 and 26 of the DTA shall have effect from December 27, 2018 without regard to the date on which the taxes are levied or the taxable period to which the taxes relate.

 

Article 30, Paragraph 5 of the DTA arranges that the Convention between Japan and the Kingdom of Denmark for the Avoidance of Double Taxation with respect to Taxes on Income signed at Tokyo on February 3, 1968 (hereinafter referred to as “the prior Convention”) shall cease to be applicable from the date upon which this Convention applies in respect of the taxes to which this Convention applies in accordance with the provisions of paragraph 2.

 

Article 30, Paragraph 6 arranges that notwithstanding the entry into force of the new DTA, an individual who is entitled to the benefits of Article 20 of the prior Convention at the time of the entry into force of the new DTA shall continue to be entitled to such benefits until such time as the individual would have ceased to be entitled to such benefits if the prior Convention had remained in force.

 

An analysis of a further selection of provisions included in the DTA can be found in our article from October 12, 2017. In this article you can also find links to the text of the DTA as available on the website of the Japanese Ministry of Finance.

 

 

Copyright – internationaltaxplaza.info

 

 

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