Double taxation avoidance agreement: India and Japan - PRESS NOTE - Income Tax

Double taxation avoidance agreement: India and Japan Notification Number: PRESS NOTE Dated 3-07-1989 A Convention for the avoidance of double taxation with respect to taxes on income between the Government of the Republic of India and the Government of Japan has been signed in New Delhi on March 7, 1989. This will replace the existing Agreement entered into in 1960. Shri G. N. Gupta, Chairman, Central Board of Direct Taxes, Ministry of Finance signed the Convention on behalf of India and Mr. Eijiro Noda, Japanese Ambassador, signed on behalf of Japan. 2. The new Convention lays greater emphasis on the principle of source taxation. Under the new Convention, as in the old Agreement, business profits of enterprise of one country will be taxed in the other country only if it carries on business in the other country through a Permanent Establishment. 3. Income from dividends, interest, royalties and fees for technical services will be taxed in the source country at concessional rates under this Convention. In view of this, the Convention will help in the modernisation and growth of Indian industry by encouraging the flow of technology and investment in essential areas. 4. The new Convention will come into force on the thirtieth day after the two countries exchange the Instruments of Ratification. Source: PIB Press Release dated 7-3-1989 .