Signing of the Protocol Amending Tax Convention with Sweden
December 6, 2013
1. On December 5, the Protocol Amending the Convention between Japan and Sweden for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income was signed in Stockholm between Mr. Seiji Morimoto, Ambassador of Japan to the Kingdom of Sweden and Mr. Mikael Lundholm, State Secretary to the Minister for Finance of the kingdom of Sweden.
2. The Protocol amends part of the current Convention, which entered into force in 1983 (partial amendment entered into force in 1999). The Protocol expands the scope of exemption of taxes withheld at source on investment income (dividends, interest and royalties) to further promote mutual investments between the two countries, as well as introduces provisions for preventing tax avoidance regarding with the above mentioned expansion of the scope of exemption. The Protocol also introduces the arbitration system to the mutual agreement procedure to promote settlement of tax related disputes with respect to the Convention. Furthermore, the Protocol reinforces mutual cooperation between the tax authorities of the two countries by strengthening mutual assistance for tax collection.
[Reference 1] Future Procedures
Each of the countries shall send to the other the notification confirming the completion of its internal procedures necessary for the entry into force of the Protocol (in the case of Japan, the approval of the National Diet is required). This Protocol shall enter into force on the thirtieth day after the date of receipt of the latter notification, and shall in principle have effect:
(1) in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January of the year next following the date on which the Protocol enters into force;
(2) in respect of other taxes on income, as regards income for taxable years beginning on or after the first day of January of the year next following the date on which the Protocol enters into force.
[Reference 2] Provisions and Key Points of the Protocol