Ukraine and Japan signed the Convention on Elimination of Double Taxation

 

Today, February 19, 2024, the Minister of Finance of Ukraine, Serhiy Marchenko, signed the Convention between the Government of Ukraine and the Government of Japan on the Elimination of Double Taxation Regarding Income Taxes and the Prevention of Tax Evasion and Avoidance and the Protocol thereto. The document was signed in Tokyo, during the Japan-Ukraine conference on economic growth and reconstruction, where the Minister of Finance of Ukraine is part of the delegation of the Prime Minister of Ukraine Denys Shmyhal.

"The signing of this agreement opens up new opportunities for our countries, contributes to the creation of favorable conditions for investments and the strengthening of economic relations between Ukraine and Japan," - noted Minister of Finance Serhiy Marchenko.

In particular, the Convention with the Protocol for the purpose of avoiding double taxation establishes rules for the distribution between Ukraine and Japan of the rights to tax certain types of income received by residents of one Contracting State from sources in the other Contracting State, in particular, the right of the country that is the source of the income to tax dividends is limited (5% - for dividends received by a company of a Contracting State that owns at least 25% of the capital of a company of another Contracting State that pays such dividends), interest (10% and 5%, if the beneficial owner of the interest is a bank, insurance company or merchant of valuables securities, or a recognized pension fund, or if interest is paid on debt claims arising from the sale of equipment or goods or the provision of services on credit) and royalties (5%). 

In addition, the Convention defines the methods of elimination of double taxation by the Contracting States, establishes agreements on the exchange of tax information between the tax authorities of Ukraine and Japan and conducts a mutual agreement procedure, which is carried out by the competent authorities in the event that a resident of one of the Contracting States believes that as a result of actions in one or both of the Contracting States he is or will be subjected to taxation inconsistent with the provisions of this Convention.

The subjects of the implementation of the Convention and the Protocol are the Ministry of Finance of Ukraine and the State Tax Service of Ukraine.