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Japan - UK Double Tax Treaty

Updated on Thursday 30th November 2017

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japan-uk-double-tax-treaty.jpgIn 2013, Japan and the UK signed a double tax treaty which amended the existing agreements between the Japan and the UK for the Avoidance of Double Taxation and Prevention of Fiscal Evasion from 2006. In this article, our company formation advisors in Japan make a brief overview of this double taxation agreement and other aspects related to it.
 

New provisions brought by the Japan-UK double tax treaty

 
The new Japan-UK double tax treaty brought several new provisions which completed the old agreement between the two jurisdictions such as:
 
The dividends paid to parent companies which hold between 10 to 50% of the dividend paying subsidiary are not taxed with a withholding tax;
The withholding tax is levied at a zero rate for a wider range of interest payments;
The taxes on capital gains on share sales is more adapted to the OECD (the Organization for Economic Cooperation and Development) policy;
The mutual agreement procedure article requires mandatory binding arbitration;
Other provisions: our Japan company formation consultants can offer more details on what these other provisions consist of.
 

More details on the Japan-UK double tax agreement

 
The Japan-UK double tax agreement from 2013 also provides that:
 
The shareholding requirement in connection to dividends exempt from taxation by the source jurisdiction is reduced from 50% or more to 10% or more;
The interest income is exempt from being taxed in the source jurisdiction;
The capital gains derived from the transfer of shares similar to business transfers by the source jurisdiction are exempt;
the tax authorities of the two countries can help each other in collecting revenue claims, mainly for consumption tax, inheritance tax and gift tax, on which the revised agreement is not applied.
 
Japan is a country which has also signed 51 income tax treaties with 62 countries and 8 tax information exchange agreements with 8 states. It is also a member of the “Convention on Mutual Administrative Assistance in Tax Matters”. Our company registration agents in Japan can provide further details on these agreements, as well as assistance related to setting up a company in Japan.
 
In case you need to know more about the taxation agreement between Japan and the UK, or for help in opening a company in this country, we invite you to get in touch with our Japan company formation representatives.

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