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Estonia-Japan double taxation avoidance to enter into force end of September

Staff Writer |
Estonia and Japan on Thursday exchanged diplomatic notes which at the end of September, 2018, will bring into force an agreement to avoid double taxation between the two countries, informs LETA/BNS.

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According to the Estonian Foreign Ministry, the agreement to avoid double taxation between Estonia and Japan will enter into force on September 29, 2018.

The text of the agreement between the two countries was initialed on March 16, 2017 in Tokyo and signed on August 30 of the same year in Tallinn.

Double taxation avoidance agreements are first and foremost signed for sharing tax receipts between two countries, exchanging information and for citizens to not have to pay taxes on the same income in two countries.

The agreement distributes the right of taxation of different types of income, like income from employment, business profit, income from real estate, interest income and dividend income, either in favor of the country in which the person is a resident or in favor of the country with the source of income or between the two countries - part of the income to one country and part of it to the other.

The aim of the double taxation avoidance agreements is to promote investments, for example by limiting the rights of the state to set higher taxer to the residents of the other party, ensure the equal treatment of persons, avoiding the more favorable taxation of its citizens and eliminate double taxation, which may occur as a result of the combined effect of the laws of the two countries.

Estonia has signed a double taxation avoidance agreement with 57 countries. The most recent treaty to have entered into force was signed with Vietnam.

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