The governments of Japan and Estonia today signed a tax treaty, Japan’s Ministry of Finance has reported.
The new treaty would reduce the withholding tax on dividends to zero when paid to the owner of at least 10 percent of the company’s voting power.
The treaty would exempt interest paid to governments from withholding tax and sets the maximum withholding tax rate in other cases at 10 percent.
Withholding tax on royalties is set at a maximum of 5 percent.
The treaty includes provisions on exchange of information and assistance in the collection of taxes. It also provides for arbitration of tax disputes.
The treaty would be the first tax treaty between the two nations. It must be ratified by both governments before it enters into force.
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