Skip to Content

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

 The MLI enters into force for Japan and Slovakia on January 1, 2019.
 Based on the reservations and notifications submitted by Japan on September 26, 2018 and by Slovakia
on September 20, 2018, the MLI applies to the tax treaty between Japan and Slovakia as described below.

1. Tax treaty covered by the MLI
 -“Convention between Japan and the Czechoslovak Socialist Republic for the Avoidance of Double Taxation
    with respect to Taxes on Income” 
    Date of signature: October 11, 1977
    Date of entry into force: November 25, 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 5(6) (Provisions for application of credit method for elimination of double taxation)
  * These provisions are applicable only to a resident of Slovakia.
  - Article 6(1) (Preamble language describing the intent of the Contracting Jurisdictions that the tax treaty wil 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 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), 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
 (a) The provisions of the MLI shall have effect in each Contracting Jurisdiction with respect to the
   tax treaty between Japan and Slovakia:
  (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, 2019; 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 July 1, 2019.
 (b) Notwithstanding (a), Article 16 (Mutual Agreement Procedure) shall have effect with respect to
   the tax treaty between Japan and Slovakia for a case presented to the competent authority of a
   Contracting Jurisdiction on or after January 1, 2019, except for cases that were not eligible to be
   presented as of that date under the tax treaty between Japan and Slovakia prior to its modification
   by the MLI, without regard to the taxable period to which the case relates.