New tax treaty between the Netherlands and Japan signed in Tokyo

The new tax treaty between the Netherlands and Japan has been signed in Tokyo on 25 August 2010, bringing a step closer the moment when the treaty will actually come into force.

In the new situation, rates of withholding taxes on dividends, interest and royalties will decrease. This will make it more attractive for Dutch companies to do business in Japan. At the same time, it will become more interesting for Japanese companies to invest in the Netherlands.

The official signing follows the substantive agreement that was achieved by the end of 2009. On behalf of Japan the new treaty has been signed by the State Secretary for Foreign Affairs, Mr. Koichi Takemasa. Mr. Philip de Heer, Dutch Ambassador to Japan, signed the treaty in Tokyo on behalf of the Netherlands. Now that the signing is a fact, the new tax treaty will be presented to parliament in both the Netherlands and Japan. Expectations are that parliamentary discussions will run into 2011, so the new treaty will probably come into force as of 2012.

Dutch Minister of Finance, Mr. Jan Kees de Jager, is enthusiastic about the new tax treaty. "Japan has been an important trading partner for the Netherlands for centuries. This treaty with low rates will encourage mutual investments and thus further strengthen the bilateral trade relations. Besides, the new treaty stipulates that should both countries not be able to resolve possible disputes on double taxation issues, an independent committee will give a decisive answer in an arbitration procedure. This is a first for the Japanese."

Photo: Japanese State Secretary for Foreign Affairs, Mr. Koichi Takemasa (right) and Dutch Ambassador to Japan, Mr. Philip de Heer, signed the new tax treaty in Tokyo

Source: Dutch Ministry of Finance, 25 August 2010