Japan And Brunei Ratify Tax Treaty

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

25 November 2009

Japan and Brunei have exchanged diplomatic notes to bring into force the Convention on the Avoidance of Double Taxation and Fiscal Evasion with respect to Taxes on Income, which was signed on January 20, 2009.

The exchange of formal notes took place in Brunei's capital city of Bandar Seri Begawan on November 19. According to a statement from the Japanese government, the agreement will enter into force on December 19, and will be applied in Japan as follows:

• With respect to taxes withheld at source, for amounts taxable on or after January 1, 2010;
• With respect to taxes on income which are not withheld at source, as regards income for any taxable year beginning on or after January 1, 2010;
• With respect to other taxes, as regards taxes for any taxable year beginning on or after January 1, 2010.

The Agreement is similar to Tax Conventions that Japan has entered into with other countries, and will adjust taxation rights between Japan and Brunei. The Agreement will set limits on the withholding taxes imposed on dividends, interest, and royalties (copyrights, patents, etc.) in the country of origin.

It is expected that economic relations between Japan and Brunei will become stronger as a result of the agreement.

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