Entry into force of the new Tax Convention between Japan and the Kingdom of Denmark
1. On November 27, the exchange of diplomatic notes for the entry into force of the Convention between Japan and the Kingdom of Denmark for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance (PDF) (signed on October 11, 2017) took place in Copenhagen, Denmark.
2. The Convention, therefore, will enter into force on December 27, 2018, on the thirtieth day after the date of exchange of diplomatic notes and will have effect:
(a) with respect to taxes levied on the basis of a taxable period, for taxes of any taxable periods beginning on or after January 1, 2019; and
(b) with respect to taxes levied not on the basis of a taxable period, for taxes levied on or after January 1, 2019.
(c) The provisions concerning the arbitration proceedings will have effect:
(i) with respect to cases presented pursuant to the provisions concerning the mutual agreement procedure on or after the date to be agreed between the Governments of the Contracting States through an exchange of diplomatic notes; and
(ii) with respect to cases presented pursuant to the provisions concerning the mutual agreement procedure before that date. In this case, no unresolved issues of such case shall be submitted to arbitration before two years have elapsed from that date.
3. The provisions concerning the assistance in the collection of taxes will have effect from November 27, 2018, the date of entry into force of this Convention, without regard to the date on which the taxes are levied or the taxable period to which the taxes relate.
4. The new Convention will replace the Convention between Japan and the Kingdom of Denmark for the Avoidance of Double Taxation with respect to Taxes on Income, which entered into force in 1968. It expands the extent of reduction of taxation on investment income by the source country and introduces arbitration proceedings to the mutual agreement procedure, with a view to further promoting investment and economic exchanges between the two countries.