Signing of the Convention between Japan and the United Arab Emirates for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income
May 2, 2013
- The Convention between Japan and the United Arab Emirates for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income was signed on Thursday, May 2, 2013, in Dubai, between H.E. Mr. Yoshihiko Kamo, Ambassador Extraordinary and Plenipotentiary of Japan to the United Arab Emirates and H.E. Obaid Humaid Al Tayer, Minister of State for Financial Affairs of the United Arab Emirates. The signing was witnessed by H.E. Mr. Shinzo Abe, Prime Minister of Japan and H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates.
- The United Arab Emirates is an important energy supplier to Japan, including oil and natural gas. This Convention will clarify the taxes imposed on the investments and economic activities of the enterprises invested in each country and will improve the environment to further promote mutual investment and economic exchanges.
Major points of the Convention
(1) The Convention clarifies taxable scope in the source country on business profit resulting from the business activities of the enterprises.
(2) Taxation on investment income in the source country is reduced as follows:
Dividends Interest Royalties 5% (10% shareholding requirement)
Exemption (government, etc.)
(3) The Convention provides for a framework for smooth and ensuring dispute resolution on tax matters between the tax authorities of the two countries.
(4) The Convention provides for provisions to implement the exchange of information regarding tax matters between the tax authorities of the two countries.
- This Convention will be approved in accordance with the legal procedures of each of the Contracting States (in case of Japan, the approval of the National Diet is required) and it will enter into force on the thirtieth day after the date of exchange of the diplomatic notes indicating such approval.