In July-August 2019, the agreement amending the U.S.– Japan Tax Treaty (' Protocol ') came into force on the transfer of instruments of ratification between Japan and the United States in Tokyo on 30 August 2019.
The Protocol will apply to:
- taxes postponed on or after 1 November 2019 on amounts paid; and
- all taxes for fiscal years commencing on or after 1 January 2020.
The agreement would expand the benefits available under the arrangement, including an expansion of the dividend tax waiver (i.e. the minimum shareholding percentage will be adjusted from ' more than 50 percent ' to ' at least 50 percent ' and the requisite holding duration will be reduced to ' six months ' from the existing ' twelve months ') as well as an exclusion from withholding tax on interest payments.
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