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Application of the MLI to the Tax Treaty between Japan and Romania

   The MLI enters into force for Japan on January 1, 2019, and for Romania on June 1, 2022.
 Based on the reservations and notifications submitted by Japan on September 26, 2018 and by Romania on February 28, 2022, the MLI applies to the tax treaty between Japan and Romania as described below.

1. Tax treaty covered by the MLI
- “Convention between Japan and the Socialist Republic of Romania for the Avoidance of Double Taxation with respect to Taxes on Income”
       Date of signature: February 12, 1976
       Date of entry into force: April 9, 1978

2. Provisions of the MLI applicable to the tax treaty
    - Article 3(1) (Provisions regarding income derived by or through an entity or arrangement that is treated as fiscally transparent)
    - Article 4(1) (Provisions that provide rules for determining whether a person other than an individual shall be treated as a resident of one of the Contracting Jurisdictions for the purposes of 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 6(3) (Preamble language referring to a desire of the Contracting Jurisdictions to develop their economic relationship and to enhance their co-operation in tax matters)
    - 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 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)

3. Entry into effect
    The provisions of the MLI shall have effect in each Contracting Jurisdiction with respect to the tax treaty between Japan and Romania:
(a) in Japan:
(i) 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 the first day of the next calendar year that begins on or after 30 days after the date of receipt by the Depositary of the notification by Romania that it has completed its internal procedures for the entry into effect of the provisions of the MLI with respect to the tax treaty with Japan; and
(ii) with respect to all other taxes levied by that Contracting Jurisdiction, for taxes levied with respect to taxable periods beginning on or after the expiration of a period of six calendar months from 30 days after the date of receipt by the Depositary of the notification by Romania that it has completed its internal procedures for the entry into effect of the provisions of the MLI with respect to the tax treaty with Japan; and
(b) in Romania:
(i) 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 the first day of the next calendar year that begins on or after 30 days after the date of receipt by the Depositary of the notification by Romania that it has completed its internal procedures for the entry into effect of the provisions of the MLI with respect to the tax treaty with Japan; and
(ii) with respect to all other taxes levied by that Contracting Jurisdiction, for taxes levied with respect to taxable periods beginning on or after 1 January of the next year beginning on or after the expiration of a period of six calendar months from 30 days after the date of receipt by the Depositary of the notification by Romania that it has completed its internal procedures for the entry into effect of the provisions of the MLI with respect to the tax treaty with Japan.

* A new press release will be issued once Romania makes the above-mentioned notification.