On November 5, 2021, the Japanese Ministry of Finance issued a press release announcing that on that same date, the Government of Japan and the Government of Kingdom of Denmark exchanged diplomatic notes concerning the entry into force of Article 24, Paragraph 5 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 entered into force in 2018 (Herafter: the Convention).

The exchange of notes in combination with Article 30 (“ENTRY INTO FORCE”), Paragraph 3 of the Convention arranges that Article 24 (“MUTUAL AGREEMENT PROCEDURE”), Paragraph 5 of the Convention shall have effect:

(a)   with respect to cases presented pursuant to paragraph 1 of that Article (Mutual Agreement Procedure) on or after November 5, 2021; and

(b)   with respect to cases presented pursuant to paragraph 1 of that Article (Mutual Agreement Procedure) before November 5, 2021. In this case, no unresolved issues of such case shall be submitted to arbitration before two years have elapsed from November 5, 2021.

Article 24, Paragrap 5 of the Convention provides for arbitration proceedings in which, where taxation not in accordance with the provisions of the Convention has not been resolved through the consultation between the tax authorities of the two countries within two years, the unresolved issue will be resolved pursuant to a decision of an arbitration panel composed of third parties.

Click here to be forwarded to the diplomatic notes that were exchanged concerning the entry into force of Article 24, Paragraph 5 of the Convention as available on the website of the Japanese Ministry of Finance.

Click here to be forwarded to the text of the Convention as available on the website of the Japanese Ministry of Finance.

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