Key Points of New Tax Agreement with the Kyrgyz Republic

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 maximum rates or exempted as follows:

	Existing Convention	New Agreement
Dividends	15%	5％　(holding for 6 months at least 10% of:            where paid by a company of Japan, voting power;            where paid by a company of the Kyrgyz Republic, capital) 10%  (others)
Interest	Exempted         (received by the Governments, etc.) 10% (others)	Exempted         (received by the Governments, etc.) 8%   (others)
Royalties	Exempted (copyright) 10% (others)	8%

3. Mutual Agreement Procedure

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

4. Exchange of Information

In order to effectively prevent international tax evasion and tax avoidance, the exchange of information concerning tax matters between the two countries are introduced.

5. Prevention of Abuse of the Agreement

In order to prevent abuse of benefits under the Agreement, any benefit under the Agreement will not be granted if it is reasonable to conclude that obtaining such a benefit was one of the principal purposes of any transaction.