Key Points of the Tax Convention between Japan and the Portuguese Republic

[Provisional translation]

1. Provisions concerning business profits resulting from business activities
   In the sole event that an enterprise establishes a permanent establishment (branch, etc.) in the partner country and conducts business activities, only business profits resulting from the business activities carried out through said permanent establishment is to be subject to tax in the said country.
2. Provisions to reduce taxation on investment income in the source country
   Taxation on investment income (dividends, interest and royalties) in the source country is reduced as follows.

   Dividends		Interest	Royalties
   Between parent and subsidiary (shareholding requirement)	Other
   5% (at least 10%)	10%	Tax exemption (government, etc.) 5% (banks) 10% (others)	5%

3. Provisions concerning dispute resolution between the tax authorities of the two countries
   If a taxpayer considers that any tax imposed on him/her was not in accordance with the provisions of the Convention, he/she may request for dispute resolution between the tax authorities (mutual agreement procedure).
   If a case subject to transfer pricing taxation is not resolved between the tax authorities within two years, the relevant taxpayer may request to go to arbitration.
4. Provisions concerning exchange of information between the tax authorities of the two countries
   The Convention enables the tax authorities of the two countries to exchange information regarding tax matters.
5. Other
   In addition to the above, the following provisions are also included.

   • (1) Provisions concerning the time limit for transfer pricing taxation (seven years from the end of the relevant taxable year)

   • (2) Provisions to prevent abuse of the Convention

   • (3) Provisions concerning taxation on income derived by a silent partner in respect of a silent partnership contract