December 11, 2015
Ministry of Finance
Protocol Amending Tax Convention with India was Signed
[Provisional translation]
1. On December 11(Fri.), the Government of Japan and the Government of India signed the Protocol Amending the Convention between the Government of Japan and the Government of the Republic of India for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income at New Delhi.
2. The Protocol amends part of the existing Convention, which entered into force in 1989 (partial amendment entered into force in 2006). Specifically, the Protocol amends the provisions for the exchange of information in terms of tax matters in accordance with the international standards as well as introduces new provisions regarding assistance in the collection of taxes. In addition to the above, some financial institutions, e.g. NEXI, are added as those which are qualified for exemption from tax on interest in the source state. While preventing international tax evasion and tax avoidance more effectively by enhanced cooperation between the tax authorities of the two countries, the Protocol is expected to promote further investment and economic exchanges between the both countries.
3. After the approval in accordance with legal procedures of each of the Contracting States (in case of Japan, approval by the Diet will be necessary), each of the Contracting States will notify the other about the completion of respective procedures. The Protocol will enter into force on the thirtieth day after the date of exchange of diplomatic notes indicating such approval. This Protocol shall 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 1st January of the calendar year next following that in which the Protocol enters into force; and
(ii) with respect to taxes not levied on the basis of a taxable year, for taxes levied on or after 1st January of the calendar year next following that in which the Protocol enters into force; and
(b) in India:
(i) with respect to taxes withheld at source, for amounts paid or credited on or after 1st April of the calendar year next following that in which the Protocol enters into force; and
(ii) with respect to taxes on income for any previous year beginning on or after 1st April of the calendar year next following that in which the Protocol enters into force.
[References]Provisions and Key Points of the Protocol
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