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Key Points of Tax Convention with Lithuania

Japanese

[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 is subjected to the maximum rates or exempted as follows:

DividendsInterestRoyalties
Exempted (beneficially owned by a person other than an individual)
10% (others)
Exempted (beneficially owned by a person other than an individual)
10%(others)
Exempted

 

3. Prevention of Abuse of the Convention

In order to prevent abuse of benefits under this Convention, it is provided that only residents who satisfy specified conditions, such as qualified persons, may be entitled to the exemption from tax on investment income. In addition, any benefit under this Convention shall 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 and Arbitration Proceedings

Taxation not in accordance with the provisions of this Convention may be resolved by mutual agreement between the tax authorities of the two countries. In addition, where taxation not in accordance with the provisions of this Convention has not been resolved through the consultation between the tax authorities of the two countries within two years, the unresolved issue shall be submitted to arbitration and resolved pursuant to a decision of an arbitration panel composed of third parties.

 

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

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