The MLI enters into force for Japan on January 1, 2019, and for Kazakhstan on October 1, 2020.
Based on the reservations and notifications submitted by Japan on September 26, 2018 and by Kazakhstan on June 24, 2020 and November 26, 2020, the MLI applies to the tax treaty between Japan and Kazakhstan as described below.
1. Tax treaty covered by the MLI
-“Convention between Japan and the Republic of Kazakhstan for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income;
Date of signature: December 19, 2008
Date of entry into force: December 30, 2009
2. Provisions of the MLI applicable to the tax treaty
- 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 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 10(1) to (3) (Provisions that deny the benefits under the tax treaty with respect to a certain income attributable to a permanent establishment situated in a third jurisdiction)
- Article 12(1) and (2) (Provisions regarding an agent that is deemed to constitute a permeant establishment)
- Article 13(2) (Provisions regarding an activity that is deemed not to constitute a permanent establishment even if the activity is carried on through a fixed place of business)
- Article 13(4) (Provisions for combining business activities carried on by closely related persons for the purpose of determining whether a permanent establishment exists)
- Article 15 (Provisions for the definition of a person closely related to an enterprise)
- 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 17(1) (Provisions regarding corresponding adjustments to taxation in accordance with arm’s length principle)
* Based on the notification submitted by Kazakhstan on November 26, 2020, the Synthesised Text of Kazakhstan has
been revised with respect to the provisions of the first sentence of paragraph 1 of Article 16 of the MLI. For details,
see the Synthesised Text (2) of Kazakhstan. 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 Kazakhstan:
(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 January 1, 2021; 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 April 1, 2021.
(b) Notwithstanding (a), Article 16 (Mutual Agreement Procedure) shall have effect with respect to the tax treaty
between Japan and Kazakhstan for a case presented to the competent authority of a Contracting Jurisdiction
on or after October 1, 2021, except for cases that were not eligible to be presented as of that date under the
tax treaty between Japan and Kazakhstan prior to its modification by the MLI, without regard to the taxable
period to which the case relates.
2. The notification submitted by Kazakhstan on November 26, 2020 shall take effect:
(a) for 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, 2022; and
(b) for notifications in respect of all other provisions, for taxes levied with respect to taxable periods beginning on
or after January 1, 2022.