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Key Points of Tax Convention with Georgia

[Provisional translation]

1. Taxation on Business Profits

Where an enterprise of one of the two countries has in the other country a permanent establishment (such as a branch) through which the enterprise carries on business, only the profits attributable to the permanent establishment may be taxed in that other country. 

2. Taxation on Investment Income

Taxation on investment income (dividends, interest and royalties) in the source country will be subjected to the reduced maximum rates or exempted as follows:

投資所得(配当、利子及び使用料)
Existing ConventionNew Convention
Dividends15%5%
InterestExempted (paid on Government bonds, etc.) 10% (others)Exempted (paid on Government bonds, etc.) 5% (others)
RoyaltiesExempted (copyright) 10% (others)Exempted

3. Prevention of Abuse of the Convention

In order to prevent abuse of benefits under the Convention, residents who satisfy specified conditions, such as qualified persons, may exclusively be entitled to the exemption from tax on royalties. In addition, any benefit under the Convention will not be granted if it is reasonable to conclude that obtaining such a benefit was one of the principal purposes of any transaction. 

4. Mutual Agreement Procedure

Taxation not in accordance with the provisions of the Convention may be resolved by mutual agreement between the tax authorities of the two countries. 

5. Exchange of Information and Assistance in Collection of Tax Claims

In order to effectively prevent international tax evasion and tax avoidance, the scope of taxes and cases subject to the exchange of information concerning tax matters is expanded and the mutual assistance in the collection of tax claims between the two countries is introduced.