December 17, 2015
Ministry of Finance
New Tax Agreement with Germany was Signed
[Provisional translation]
1. Today, the Government of Japan and the Government of the Federal Republic of Germany signed the Agreement between Japan and the Federal Republic of Germany for the Elimination of Double Taxation with respect to Taxes on Income and to certain other Taxes and the Prevention of Tax Evasion and Avoidance in Tokyo.
2. This Agreement wholly amends the prior Agreement, which entered into force in 1967 and was partly amended in 1980 and in 1984, in particular, by modifying the provisions on business profits, expanding the extent of reduction and exemption of taxation on investment income, introducing the provisions for the prevention of abuse of the Agreement, for arbitration proceedings in mutual agreement procedures and for assistance in the collection of taxes, and reinforcing the provisions for the exchange of information concerning tax matters. It is expected to promote further mutual investments and economic exchanges between the two countries while avoiding double taxation and preventing international tax evasion and tax avoidance.
【Reference 1】 Next Steps
After the completion of the necessary domestic procedures in each of the two countries (in the case of Japan, approval by the Diet is necessary), each of the two countries shall send in writing and through diplomatic channels to the other country the notification confirming that its internal procedures necessary for the entry into force of this Agreement have been completed. The Agreement shall enter into force on the thirtieth day after the date of receipt of the latter notification.
(a) in the case of Japan:
(i) in the case of taxes levied on the basis of a taxable year, for taxes for any taxable years beginning on or after the first day of January in the calendar year next following that in which the Agreement enters into force; and
(ii) in the case of taxes not levied on the basis of a taxable year, for taxes levied on or after the first day of January in the calendar year next following that in which the Agreement enters into force; and
(b) in the case of the Federal Republic of Germany :
(i) in the case of taxes withheld at source, in respect of amounts paid on or after the first day of January in the calendar year next following that in which the Agreement enters into force; and
(ii) in the case of other taxes, in respect of taxes levied for periods beginning on or after the first day of January in the calendar year next following that in which the Agreement enters into force.
【Reference 2】 Texts and Key Points of the Agreement
- “Agreement between Japan and the Federal Republic of Germany for the Elimination of Double Taxation with respect to Taxes on Income and to certain other Taxes and the Prevention of Tax Evasion and Avoidance” (Japanese • English (329KB/188KB)
) - Key Points of New Tax Agreement with Germany