Signing of the Protocol Amending Tax Convention with the United Kingdom

December 18, 2013
Japanese

  1. 1. On December 17, the Protocol Amending the Convention between Japan and the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains was signed in London between Mr. Keiichii Hayashi, Ambassador of Japan to the United Kingdom and Mr. David Gauke MP, Exchequer Secretary to the Treasury of the United Kingdom.

    2. The Protocol amends part of the current Convention, which entered into force in 2006.  The Protocol expands the scope of exemption of taxes withheld at source on investment income (dividends and interest) to further promote the mutual investments between the two countries and introduces a new article concerning taxation on business profits, as well as introduces the arbitration system to the mutual agreement procedure to promote settlement of tax related disputes with respect to the Convention. The Protocol also reinforces mutual cooperation between the tax authorities of the two countries by introducing provisions regarding mutual assistance for tax collection.

    [Reference 1] Future Procedures

    After the necessary domestic procedures are carried out by each of the two countries (in the case of Japan, approval by the Diet will be necessary), diplomatic notes indicating the completion of respective legal procedures are to be exchanged. The Protocol will enter into force on the 30th day after the date of exchange of the diplomatic notes. In Japan, the Protocol will be applied as follows in principle:

    (1) with respect to taxes withheld at source, for amounts taxable on or after 1January in the calendar year next following that in which the Protocol enters into force;

    (2) with respect to taxes on income which are not withheld at source, as regards income for taxable year beginning on or after 1 January in the calendar year next following that in which the Protocol enters into force.

    [Reference 2] Provisions and Key Points of the Protocol

    • "Protocol Amending the Convention between Japan and the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains” (English (PDF) PDF/ Japanese (PDF)PDF )
    • "Exchanged Notes concerning the Convention to be Amended by the Protocol Amending the Convention between Japan and the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains” (English (PDF)PDF / Japanese (PDF)PDF )
    • Key Points of the Protocol Amending the Tax Convention with the United Kingdom (PDF)PDF

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