Entry into Force of the Convention between the Government of Japan and the Government of the Kingdom of Saudi Arabia for the Avoidance of Double Taxation and the Prevention of Tax Evasion with respect to Taxes on Income

July 19, 2011
Japanese

  1. On July 16, with regard to the Convention between the Government of Japan and the Government of the Kingdom of Saudi Arabia for the Avoidance of Double Taxation and the Prevention of Tax Evasion with Respect to Taxes on Income (signed on November 15, 2010), the Embassy of Japan in the Kingdom of Saudi Arabia sent a notification on the completion of internal procedures of Japan for the entry into force of the Convention to the Ministry of Foreign Affairs of the Kingdom of Saudi Arabia. Thus, all necessary procedures for the entry into force of the Convention have been completed.

  2. This Convention will enter into force on September 1, 2011 and shall be applicable:
    (1)  in the case of Japan:
    (i)  with respect to taxes withheld at source, for amounts taxable on or after January 1, 2012;
    (ii)  with respect to taxes on income which are not withheld at source, as regards income for any taxable year beginning on or after January 1, 2012;
    (iii)  with respect to other taxes, as regards taxes for any taxable year beginning on or after January 1, 2012; and

    (2)  in the case of the Kingdom of Saudi Arabia:
    (i)  with regard to taxes withheld at source, in respect of amounts paid on or after January 1, 2012; and
    (ii)  with regard to other taxes, in respect of taxable years beginning on or after January 1, 2012.

  3. This Convention will be the first tax treaty concluded between Japan and a Gulf Cooperation Council member. Similar to the Conventions already concluded between Japan and other countries, this Convention adjusts the double taxation between Japan and the Kingdom of Saudi Arabia arising from human and economic exchanges. Reflecting the strengthened economic relations between Japan and the Kingdom of Saudi Arabia, and to promote mutual investments, this Convention clarifies the limit of withholding tax rates imposed on dividends, income from debt-claims (interest) and royalties, as well as prescribes the provisions for the exchange of information based on the international standard regarding taxes. It is expected that this Convention will further strengthen the economic relations between the two countries, and contribute to the prevention of tax evasion.

[Reference]
1.  Saudi Arabia is the top oil supplier to Japan, who is shipping 30 percent of Japan's import.
2.  Number of Japanese Nationals in the Kingdom of Saudi Arabia : approximately 850
 Number of Japanese Companies in the Kingdom of Saudi Arabia: 82
(as of October 1, 2009)

    • (*This is a provisional translation. The above date denotes the date of the issue of the original press release in Japanese.)
(END)


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