Press Releases
Signing of the Tax Convention between Japan and the Hellenic Republic
November 1, 2023
On November 1, “Convention between Japan and the Hellenic Republic for the Elimination of Double Taxation with Respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance” (hereinafter referred to as the Convention) (English (PDF)
/ Japanese (PDF)) was signed in Athens, the capital of the Hellenic Republic by H.E. Mr. Nakayama Yasunori, Ambassador Extraordinary and Plenipotentiary of Japan to the Hellenic Republic and H.E. Mr. Konstantinos Hatzidakis,Minister of National Economy and Finance.
- For the purpose of eliminating double taxation arising between the two countries, this Convention clarifies the scope of taxable income in the two countries. In addition, this Convention will enable the tax authorities of the two countries to consult each other on taxation not in accordance with the provisions of this Convention and to exchange information concerning tax matters and to mutually lend assistance in the collection of tax claims. It is expected that this Convention promotes further mutual investments and economic exchanges between the two countries while eliminating double taxation and preventing international tax evasion and tax avoidance.
- The following are the key points of the Convention.
- Taxation on Business Profits
Where an enterprise of one of the two countries has in the other country a permanent establishment (such as a branch) through which the enterprise carries on business, only the profits attributable to the permanent establishment may be taxed in that other country. - Taxation on Investment Income
Taxation on investment income (dividends, interest and royalties) in the source country will be subjected to the maximum rates or exempted as follows:
(Note) voting power (where paid by a company of Japan), or capital or voting power (where paid by a company of the Hellenic Republic)Dividends 5% (holding at least 10% of shares (Note) for 6 months)
10% (others)Interest Exempted (received by the Governments, etc.)
10% (others)Royalties 5% - Mutual Agreement Procedure and Arbitration Proceedings
Taxation not in accordance with the provisions of the Convention may be resolved by mutual agreement between the tax authorities of the two countries. In addition, where such taxation has not been resolved through the consultation between the tax authorities of the two countries within three years, the unresolved issue will be resolved pursuant to a decision of an arbitration panel composed of third parties. - Exchange of Information and Assistance in Collection of Tax Claims
In order to effectively prevent international tax evasion and tax avoidance, the exchange of information concerning tax matters and the mutual assistance in the collection of tax claims between the two countries are introduced. - Prevention of Abuse of the Convention
In order to abuse of benefits under the Convention, any benefit under the Convention will not be granted if the income is attributable to a permanent establishment in a third country and the tax on the income in the third country is less than a certain amount of tax, or if it is reasonable to conclude that obtaining such a benefit was one of the principal purposes of any transaction.
- Taxation on Business Profits
- After the approval in accordance with the domestic procedures of the two countries (in Japan, approval by the Diet is necessary), this Convention will enter into force on the thirtieth day after the date of exchange of diplomatic notes indicating such approval and will have effect:
- (a) in Japan:
- (i) with respect to taxes levied on the basis of a taxable year, for taxes for any taxable years beginning on or after 1 January of the calendar year next following that in which the Convention enters into force; and
- (ii) with respect to taxes levied not on the basis of a taxable year, for taxes levied on or after 1 January of the calendar year next following that in which the Convention enters into force; and
- (b) in the Hellenic Republic:
- (i) with respect to taxes withheld at source, for amounts paid or credited on or after 1 January of the calendar year next following that in which the Convention enters into force; and
- (ii) with respect to other taxes, for taxes levied for periods beginning on or after 1 January of the calendar year next following that in which the Convention enters into force; and
- (c) The provisions concerning the exchange of information and the assistance in the collection of taxes will have effect from the date of entry into force of this Convention without regard to the date on which the taxes are levied or the taxable year to which the taxes relate.
- (a) in Japan: