Japan : A new Tax Agreement reached its final stage of conclusion between Japan Government and the Government of the Federal Republic of Germany in the month of July. Levying of tax by two or more jurisdictions with respect to Taxes on Income reached an amicable agreeable status when the representatives of the Government of Japan and the Government of the Federal Republic of Germany penned a new agreement on 16th of this month.
This new agreement is an amendment to the existing double taxation obligations. The new Agreement reduces taxes withheld at source on investment income (dividends, interest and royalties) to further promote the investment exchanges between the two countries. Additionally, this new amendment introduces the arbitration proceeding to mutual agreement procedure to ensure the settlement of disputes concerning taxation on business profits. The new Agreement also expands the cooperation between the tax authorities of the two countries by introducing an Article concerning assistance in the collection of taxes.
This agreement will be signed after the necessary internal procedures have been completed by each of the two Governments and will become effective as soon as approval process on both sides is completed.