Australia And Japan Agree To Update Tax Treaty

by Mary Swire, Tax-News.com, Hong Kong

20 November 2006

Australian Treasurer Peter Costello has announced that officials from the Australian and Japanese governments will meet to discuss new amendments to the bilateral double tax avoidance agreement in place between the two countries.

The existing tax treaty between Australia and Japan has been in place since 1969, and Costello stated that it is time the treaty was updated to reflect 21st century business practices, especially given growing volumes of trade and investment flowing between the two countries.

“Japan is Australia’s largest export market, with exports of goods and services worth A$34.2 billion (US$26.2 billion) in 2005-06. Japan is Australia’s third-largest source of foreign investment, with direct, portfolio and other investments worth A$53.3 billion at the end of 2005. Australian investment in Japan was worth A$31.5 billion at the end of 2005,” the Treasurer observed on Friday.

The Department of the Treasury is seeking comments from taxpayers that have transactions with Japan that could be affected by changes to the existing treaty.

"The consultation process is designed to ensure that the renegotiated treaty recognises the day to day needs and experiences of all those who have dealings between Australia and Japan," the department explained.

This consultation will close on 22 December, 2006.

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