Kazakhstan Ratifies Double Tax Treaty With Japan

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

04 November 2009

Kazakhstan’s Parliament has approved a law ratifying the double tax convention signed with Japan in June 2008.

According to the text of the agreement:

• Tax on dividends will not exceed 5% of the gross amount of the dividends if the beneficial owner is a company that has owned directly or indirectly, for the period of six months ending on the date on which entitlement to the dividends is determined, at least 10% of the voting shares of the company paying the dividends;
• Tax on dividends shall not exceed 15% of the gross amount of the dividends in all other cases;
• Tax on royalties shall not exceed 10%;
• Tax on interest shall not exceed 10%;
• A building site or construction or installation project constitutes a permanent establishment only if it lasts more than twelve months.

The agreement, upon entry into force, will remove double taxation on taxpayers in the two countries, removing barriers to bilateral trade and investment.

Trade in 2008 amounted to JPY109.4bn (USD1.22bn), with JPY87.9bn exported to Japan, mainly ferroalloy, while JPY21.5bn was exported from Japan, mainly cars, steel pipes, tubes and construction machines.

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