By Gela Barshovi, International and Georgian tax adviser and managing partner, TPsolution
Georgia and Japan competent authorities on 22 October announced that they renegotiated the current tax treaty between Georgian and Japan.
As the negotiating parties revealed, the new convention is based on the OECD model tax convention 2017.
Notably, the current Georgia-Japan tax treaty is a successor to the tax treaty signed between USSR and Japan in 1986 according to which a 15% tax was applicable at source on the interest payment and 0%/10% withholding tax was applicable in case of interest and royalty payments.
In addition, the threshold for creating construction site permanent establishment is 12 months according to the old version of the treaty.
If, as stated, the new treaty is based on OECD 2017 mode, we expect more exemptions to source taxation.
Georgia currently has signed international tax treaties with 56 countries, the 57th with Hong Kong will be ratified soon.
Georgian tax treaties are available on the official website of the Georgian Ministry of Finance.
Gela Barshovi
Gela Barshovi is Tax Advisor and Managing Partner at TPsolutions, Tbilisi, Georgia.
Gela was Chief Tax Auditor and Group Leader of the Georgian Tax Administration's international tax division from 2010--2017. He represented Georgia as a member of Working Party 6 during the OECD/G20 BEPS project negotiations. He has taught taxation at different academies since 2015.
Gela also worked as a transfer pricing consultant with BDO in Vienna, Austria, and as a senior associate in the tax group of Comparex AG, in Leipzig, Germany.
He holds a master’s degree in international tax law from Vienna University of Economics and Business (WU).
Latest posts by Gela Barshovi (see all)
- Georgia amends transfer pricing rules for APAs, reduces thresholds - March 23, 2021
- Tax treaty between Georgia and Japan has been renegotiated - October 29, 2020
- Georgia offers new tax incentives for foreign IT and shipping companies - October 15, 2020
- Georgia publishes amended text of tax treaties with Iceland, Ireland, Finland, Luxembourg, Slovenia - August 10, 2020
- Georgia transfer pricing: what multinational groups need to know - March 5, 2020
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