Japan, Jamaica sign first tax treaty

Japan’s Ministry of Finance on December 17 announced that Japan and Jamacia have signed a tax treaty.

The treaty, which is not yet in force, would be the first tax treaty between the two nations.

The treaty is designed to eliminate double taxation and counter tax avoidance. It also provides for arbitration of unresolved cross-border tax disputes.

The treaty provides for reduced, five percent, withholding taxes on dividend payments to related companies in some cases. Withholding tax on interest is reduced to zero if received by a government or to 10 percent in other cases. Withholding tax on royalties paid for equipment is reduced to 2 percent and is reduced in other cases to 10 percent.

The treaty also allows for the exchange of information regarding taxation between the two tax administrations and provides mechanisms for the two countries to help one another collect tax.