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Application of the MLI to the Tax Treaty between Japan and Saudi Arabia

The MLI enters into force for Japan on January 1, 2019, and for Saudi Arabia on May 1, 2020.
 Based on the reservations and notifications submitted by Japan on September 26, 2018 and by Saudi Arabia on January 23, 2020, the MLI applies to the tax treaty between Japan and Saudi Arabia as described below.

1. Tax treaty covered by the MLI
  -“Convention between the Government of Japan and the Government of the Kingdom of Saudi Arabia for the 
    Avoidance of Double Taxation and the Prevention of Tax Evasion with respect to Taxes on Income”
    Date of signature: November 15, 2010 
    Date of entry into force: September 1, 2011
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 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 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)

3. Entry into effect
(a) The provisions of the MLI shall have effect in each Contracting Jurisdiction with respect to the tax treaty between
     Japan and Saudi Arabia: 
    (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 November 1, 2020.   
(b) Notwithstanding (a), Article 16 (Mutual Agreement Procedure) shall have effect with respect to the tax treaty 
     between Japan and Saudi Arabia for a case presented to the competent authority of a Contracting Jurisdiction
     on or after May 1, 2020, except for cases that were not eligible to be presented as of that date under the tax treaty
     between Japan and Saudi Arabia prior to its modification by the MLI, without regard to the taxable period to which
     the case relates.