Times of Oman
Nov 27, 2015 LAST UPDATED AT 02:24 PM GMT
Oman, Japan sign fiscal agreement
August 25, 2014 | 12:00 AM

Muscat: The agreement between the governments of Japan and the Sultanate of Oman regarding avoidance of double taxation is expected to further strengthen economic relations and human exchanges between the two countries, and contribute towards preventing fiscal evasion, the Japanese Embassy said in a press release.

The agreement adjusts the taxation rights between Japan and Oman to avoid international double taxation arising from economic and human exchanges. Reflecting the strengthened economic relations between the two countries, and to promote mutual investment, this agreement clarifies the limit of withholding tax rates imposed by the source state on dividends, interest and royalties.

Key points of the agreement include the clarification of taxable scope in the source country regarding business profit resulting from business activities of enterprises. It also includes reduction of taxation on investment income in the source country to five per cent dividends (10 per cent shareholding requirement) and 10 per cent others; interest exemption for the government, and 10 per cent others, and 10 per cent royalties. the agreement involves a framework for ensuring smooth dispute resolution on tax matters between the tax authorities of the two countries, and provisions to implement the exchange of information regarding tax matters between tax authorities of Japan and Oman.

Substantial agreement has also been reached on Bilateral Investment Agreement negotiations between the two countries which continue to nurture a robust economic relationship.

In 2013, the volume of exports from Oman to Japan was around $5.63 billion. Japan is one of Oman's largest importers of oil & gas, and aluminium and fishery products. Imports from Japan to Oman were around $3.13 billion. More than 90 per cent is accounted for by automobile and auto parts sector. Japanese machinery and electronics are also in demand.

Last week Japan's Official Gazette announced that the agreement between the two governments for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed on January 9, 2014 ahead of Japanese Prime Minister Shinzo Abe's official visit to Oman, will enter into force on  September 1.

Japan sent a notification through diplomatic channels about the completion of Japan's internal procedures for the entry into force of the Agreement to the Sultanate of Oman on August 17, 2014.

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