Entry into force of the Protocol Amending Tax Convention between the Government of Japan and the Government of the United States of America
1. On August 30, Mr. Kiyoto Tsuji, Parliamentary Vice-Minister for Foreign Affairs, and Mr. Joseph M. Young, Chargé d'Affaires ad interim of the United States of America to Japan, exchanged instruments of ratification for the entry into force of the Protocol Amending the Convention between the Government of Japan and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (hereinafter referred to as “the Protocol”) in Tokyo. With this, the Protocol entered into force on the same date.
2. The Protocol will expand the coverage of withholding tax exemption on dividend and interest, introduce arbitration procedures, and also further promote expand the coverage of mutual assistance in the collection of taxes between the tax authorities of both countries.
3. t is expected that the entry into force of the Protocol will further promote mutual investment between Japan and the United States and cooperation of the tax authorities of both countries to prevent international tax evasion and tax avoidance in an effective manner.
- The Protocol will have effect:
- (1) in respect of taxes withheld at source, for amounts paid or credited on or after 1 November 2019; and
- (2) in respect of other taxes, for taxable years beginning on or after 1 January, 2020.
- The provisions concerning arbitration will have effect with respect to:
- (1) cases that are under consideration by the tax authorities of both countries as of August 30; and
- (2) cases that come under consideration after August 30.
- The provisions concerning exchange of information and assistance in the collection of taxes will have effect from August 30, without regard to the taxable year to which the matter or revenue claim relates.