The MLI enters into force for Japan on January 1, 2019, and for Finland on June 1, 2019.
Based on the reservations and notifications submitted by Japan on September 26, 2018 and by Finland on February 25, 2019 and June 27, 2023, the MLI applies to the tax treaty between Japan and Finland as described below.
1. Tax treaty covered by the MLI
- “Convention between Japan and the Republic of Finland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income”
Date of signature: February 29, 1972
Date of entry into force: December 30, 1972
- “Protocol Amending the Convention between Japan and the Republic of Finland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income”
Date of signature: March 4, 1991
Date of entry into force: December 28, 1991
2. Provisions of the MLI applicable to the tax treaty
- Article 6(1) (Preamble language describing the intent of the Contracting Jurisdictions that the tax treaty will not create opportunities for non-taxation or reduced taxation)
- Article 7(1) (Provisions that deny the benefits under the tax treaty where the principal purpose or one of the principal purposes of any arrangement or transaction was to obtain those benefits)
- Article 9(4) (Provisions for taxation on capital gains from alienation of shares or interests of entities deriving their value principally from immovable property)
- Article 16(1), 1st sentence (Provisions for presentation of a case of taxation not in accordance with the provisions of the tax treaty for a mutual agreement procedure)
- Article 16(1), 2nd sentence (Provisions that provide that a case must be presented for a mutual agreement procedure within three years)
- Article 16(2), 2nd sentence (Provisions that provide that any agreement reached under a mutual agreement procedure shall be implemented)
- Article 17(1) (Provisions regarding corresponding adjustments to taxation in accordance with arm’s length principle)
- Part VI (Provisions regarding arbitration for resolving a case of taxation not in accordance with the provisions of the tax treaty)
- Article 19(12) (Provisions that provide that an unresolved issue arising from the case on which a decision has already been rendered by a court or administrative tribunal shall not be submitted to arbitration)
- Article 23(2) (Provisions regarding the arbitration process in which the arbitration panel shall make its own decision on the issues submitted to arbitration based on information provided by the competent authorities)
- Article 23(5) (Provisions regarding non-disclosure obligation on the presenters of the case for any information received during the course of arbitration proceedings)
- Article 28(2)(a) (Provisions regarding the scope of cases eligible for arbitration)
* Based on the notification submitted by Finland on June 27, 2023, the provisions of paragraph 4 of Article 9 of the MLI applies to the tax treaty between Japan and Finland. For details, see the Synthesised Text (2) of Finland. For the timing of entry into effect of the notification, see below.
3. Entry into effect
1. (a) The provisions of the MLI shall have effect in each Contracting Jurisdiction with respect to the tax treaty between Japan and Finland:
(i) in Japan:
(aa) with respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving rise to such taxes occurs on or after January 1, 2020; and
(bb) with respect to all other taxes levied by that Contracting Jurisdiction, for taxes levied with respect to taxable periods beginning on or after December 1, 2019; and
(ii) in Finland:
(aa) with respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving rise to such taxes occurs on or after January 1, 2020; and
(bb) with respect to all other taxes levied by that Contracting Jurisdiction, for taxes levied with respect to taxable periods beginning on or after January 1, 2020.
(b) Notwithstanding (a), the provisions of Part VI (Arbitration) shall have effect:
(i) with respect to cases presented to the competent authority of a Contracting Jurisdiction (as described in subparagraph a) of paragraph 1 of Article 19 (Mandatory Binding Arbitration)), on or after June 1, 2019; and
(ii) with respect to cases presented to the competent authority of a Contracting Jurisdiction prior to June 1, 2019, on the date when both Contracting Jurisdictions have notified the Depositary that they have reached mutual agreement pursuant to paragraph 10 of Article 19 (Mandatory Binding Arbitration), along with information regarding the date or dates on which such cases shall be considered to have been presented to the competent authority of a Contracting Jurisdiction (as described in subparagraph a) of paragraph 1 of Article 19 (Mandatory Binding Arbitration)) according to the terms of that mutual agreement.
2. The notification submitted by Finland on June 27, 2023 shall take effect:
(a) for reservations and notifications in respect of provisions relating to taxes withheld at source, where the event giving rise to such taxes occurs on or after January 1, 2024; and
(b) for reservations and notifications in respect of all other provisions, for taxes levied with respect to taxable periods beginning on or after January 1, 2024.