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Press Release

Japanese

December 6, 2013

Ministry of Finance

Protocol Amending Tax Convention with Sweden was Signed

[Provisional translation]

On December 5(Thu.), the Government of Japan and the Government of Sweden signed the Protocol Amending the Convention between Japan and Sweden for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income at Stockholm.

The Protocol amends part of the current Convention, which entered into force in 1983 (partial amendment entered into force in 1999). The Protocol expands the scope of exemption of taxes withheld at source on investment income (dividends, interest and royalties) to further promote the investment exchanges between the two countries and accordingly, introduces provisions for preventing tax avoidance. The Protocol also introduces the arbitration proceeding to the mutual agreement procedure to promote settlement of tax related disputes with respect to the Convention. Furthermore, the Protocol reinforces cooperation between the tax authorities of the two countries by strengthening assistance in the collection of taxes.

[Reference 1] Next Steps

After the necessary domestic procedures are carried out by each of the two countries (in case of Japan, approval by the Diet will be necessary), each country will notify the other about the completion of respective procedures. The Protocol will enter into force on the 30th day after the date of receipt of the latter notification, and will be applied as follows in principle:

  • (1) in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January of the year next following the date on which the Protocol enters into force;

  • (2) in respect of other taxes on income, as regards income for taxable years beginning on or after the first day of January of the year next following the date on which the Protocol enters into force.

[Reference 2] Provisions and Key Points of the Protocol