dtc agreement between japan and kazakhstan

8/2/2019 DTC agreement between Japan and Kazakhstan

1/27

CONVENTION BETWEENJAPAN AND THE REPUBLIC OF KAZAKHSTAN

FOR THE AVOIDANCE OF DOUBLE TAXATIONAND THE PREVENTION OF FISCAL EVASIONWITH RESPECT TO TAXES ON INCOME

Japan and the Republic of Kazakhstan,

Desiring to conclude a Convention for the avoidance ofdouble taxation and the prevention of fiscal evasion withrespect to taxes on income,

Have agreed as follows:

Article 1

This Convention shall apply to persons who areresidents of one or both of the Contracting States.

Article 2

1. This Convention shall apply to the following taxes:

(a) in the case of Kazakhstan:

(i) the corporate income tax; and

(ii) the individual income tax

(hereinafter referred to as Kazakhstan tax);

(b) in the case of Japan:

(i) the income tax;

(ii) the corporation tax; and

(iii) the local inhabitant taxes

(hereinafter referred to as Japanese tax).

2. This Convention shall apply also to any identical orsubstantially similar taxes that are imposed after the dateof signature of the Convention in addition to, or in placeof, those referred to in paragraph 1. The competentauthorities of the Contracting States shall notify eachother of any significant changes that have been made intheir respective taxation laws, within a reasonable periodof time after such changes.


2/27

Article 3

1. For the purposes of this Convention, unless thecontext otherwise requires:

(a) the term Kazakhstan means the Republic ofKazakhstan, when used in a geographical sense,including the state territory of the Republic ofKazakhstan and areas where Kazakhstan exercisesits sovereign rights and jurisdiction accordingto its legislation and international agreementsof which it is a participant;

(b) the term Japan, when used in a geographicalsense, means all the territory of Japan,

including its territorial sea, in which the lawsrelating to Japanese tax are in force, and allthe area beyond its territorial sea, includingthe seabed and subsoil thereof, over which Japanhas sovereign rights in accordance withinternational law and in which the laws relatingto Japanese tax are in force;

(c) the terms a Contracting State and the otherContracting State mean Japan or Kazakhstan, asthe context requires;

(d) the term tax means Japanese tax or Kazakhstantax, as the context requires;

(e) the term person includes an individual, acompany and any other body of persons;

(f) the term company means any body corporate orany entity that is treated as a body corporatefor tax purposes;

(g) the term enterprise applies to the carrying onof any business;

(h) the terms enterprise of a Contracting State andenterprise of the other Contracting State meanrespectively an enterprise carried on by aresident of a Contracting State and an enterprisecarried on by a resident of the other ContractingState;

(i) the term international traffic means anytransport by a ship or aircraft operated by anenterprise of a Contracting State, except whenthe ship or aircraft is operated solely betweenplaces in the other Contracting State;


3/27

(j) the term national means:

(i) in the case of Kazakhstan, any individualpossessing the nationality of Kazakhstan andany legal person, partnership or associationderiving its status as such from the laws inforce in Kazakhstan; and

(ii) in the case of Japan, any individualpossessing the nationality of Japan, anyjuridical person created or organised underthe laws of Japan and any organisationwithout juridical personality treated forthe purposes of Japanese tax as a juridicalperson created or organised under the laws

of Japan;

(k) the term competent authority means:

(i) in the case of Kazakhstan, the Ministry ofFinance or its authorised representative;and

(ii) in the case of Japan, the Minister ofFinance or his authorised representative;and

(l) the term business includes the performance ofprofessional services and of other activities ofan independent character.

2. As regards the application of this Convention at anytime by a Contracting State, any term not defined thereinshall, unless the context otherwise requires, have themeaning that it has at that time under the laws of thatContracting State for the purposes of the taxes to whichthe Convention applies, any meaning under the applicabletax laws of that Contracting State prevailing over ameaning given to the term under other laws of thatContracting State.


4/27


5/27

3. Where by reason of the provisions of paragraph 1 aperson other than an individual is a resident of both

Contracting States, then the competent authorities of theContracting States shall determine by mutual agreement theContracting State of which that person shall be deemed tobe a resident for the purposes of this Convention. In theabsence of a mutual agreement by the competent authoritiesof the Contracting States, the person shall not beconsidered a resident of either Contracting State for thepurposes of claiming any benefits provided by theConvention, except those provided by Articles 23 and 24.

Article 5

1. For the purposes of this Convention, the term

permanent establishment means a fixed place of businessthrough which the business of an enterprise is wholly orpartly carried on.

2. The term permanent establishment includesespecially:

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, an oil or gas well or a quarry; and

(g) an installation or structure used for, or anyplace of, the exploration or extraction ofnatural resources.

3. A building site or construction or installationproject constitutes a permanent establishment only if itlasts more than twelve months.

4. Notwithstanding the preceding provisions of thisArticle, the term permanent establishment shall be deemednot to include:

(a) the use of facilities solely for the purpose ofstorage, display or delivery of goods ormerchandise belonging to the enterprise;

(b) the maintenance of a stock of goods ormerchandise belonging to the enterprise solely

for the purpose of storage, display or delivery;


6/27

(c) the maintenance of a stock of goods ormerchandise belonging to the enterprise solely

for the purpose of processing by anotherenterprise;

(d) the maintenance of a fixed place of businesssolely for the purpose of purchasing goods ormerchandise or of collecting information, for theenterprise;

(e) the maintenance of a fixed place of businesssolely for the purpose of carrying on, for theenterprise, any other activity of a preparatoryor auxiliary character;

(f) the maintenance of a fixed place of businesssolely for any combination of activitiesmentioned in subparagraphs (a) to (e), providedthat the overall activity of the fixed place ofbusiness resulting from this combination is of apreparatory or auxiliary character.

5. Notwithstanding the provisions of paragraphs 1 and 2,where a person - other than an agent of an independentstatus to whom the provisions of paragraph 6 apply - isacting on behalf of an enterprise and has, and habituallyexercises, in a Contracting State an authority to conclude

contracts in the name of the enterprise, that enterpriseshall be deemed to have a permanent establishment in thatContracting State in respect of any activities which thatperson undertakes for the enterprise, unless the activitiesof such person are limited to those mentioned in paragraph4 which, if exercised through a fixed place of business,would not make this fixed place of business a permanentestablishment under the provisions of that paragraph.

6. An enterprise shall not be deemed to have a permanentestablishment in a Contracting State merely because itcarries on business in that Contracting State through abroker, general commission agent or any other agent of anindependent status, provided that such persons are actingin the ordinary course of their business.

7. The fact that a company which is a resident of aContracting State controls or is controlled by a companywhich is a resident of the other Contracting State, orwhich carries on business in that other Contracting State(whether through a permanent establishment or otherwise),shall not of itself constitute either company a permanentestablishment of the other.


7/27

Article 6

1. Income derived by a resident of a Contracting Statefrom immovable property (including income from agricultureor forestry) situated in the other Contracting State may betaxed in that other Contracting State.

2. The term immovable property shall have the meaningwhich it has under the laws of the Contracting State inwhich the property in question is situated. The term shallin any case include property accessory to immovableproperty, livestock and equipment used in agriculture andforestry, rights to which the provisions of general lawrespecting landed property apply, usufruct of immovableproperty and rights to variable or fixed payments as

consideration for the working of, or the right to work,mineral deposits, sources and other natural resources;ships and aircraft shall not be regarded as immovableproperty.

3. The provisions of paragraph 1 shall apply to incomederived from the direct use, letting, or use in any otherform of immovable property.

4. The provisions of paragraphs 1 and 3 shall also applyto the income from immovable property of an enterprise.

Article 7

1. The profits of an enterprise of a Contracting Stateshall be taxable only in that Contracting State unless theenterprise carries on business in the other ContractingState through a permanent establishment situated therein.If the enterprise carries on business as aforesaid, theprofits of the enterprise may be taxed in that otherContracting State but only so much of them as isattributable to that permanent establishment.

2. Subject to the provisions of paragraph 3, where anenterprise of a Contracting State carries on business inthe other Contracting State through a permanentestablishment situated therein, there shall in eachContracting State be attributed to that permanentestablishment the profits which it might be expected tomake if it were a distinct and separate enterprise engagedin the same or similar activities under the same or similarconditions and dealing wholly independently with theenterprise of which it is a permanent establishment.


8/27

3. In determining the profits of a permanentestablishment, there shall be allowed as deductions

expenses which are incurred for the purposes of thepermanent establishment, including executive and generaladministrative expenses so incurred, whether in theContracting State in which the permanent establishment issituated or elsewhere.

4. No profits shall be attributed to a permanentestablishment by reason of the mere purchase by thatpermanent establishment of goods or merchandise for theenterprise.

5. For the purposes of the preceding paragraphs of thisArticle, the profits to be attributed to the permanent

establishment shall be determined by the same method yearby year unless there is good and sufficient reason to thecontrary.

6. Where profits include items of income which are dealtwith separately in other Articles of this Convention, thenthe provisions of those Articles shall not be affected bythe provisions of this Article.

Article 8

1. Profits from the operation of ships or aircraft in

international traffic carried on by an enterprise of aContracting State shall be taxable only in that ContractingState.

2. Notwithstanding the provisions of Article 2, where anenterprise of a Contracting State carries on the operationof ships or aircraft in international traffic, thatenterprise, if an enterprise of Kazakhstan, shall be exemptfrom the enterprise tax of Japan, and, if an enterprise ofJapan, shall be exempt from any tax similar to theenterprise tax of Japan which may hereafter be imposed inKazakhstan.

3. The provisions of the preceding paragraphs of thisArticle shall also apply to profits from the participationin a pool, a joint business or an international operatingagency.

Article 9

1. Where

(a) an enterprise of a Contracting State participatesdirectly or indirectly in the management, controlor capital of an enterprise of the other

Contracting State, or


9/27

(b) the same persons participate directly orindirectly in the management, control or capital

of an enterprise of a Contracting State and anenterprise of the other Contracting State,

and in either case conditions are made or imposed betweenthe two enterprises in their commercial or financialrelations which differ from those which would be madebetween independent enterprises, then any profits whichwould, but for those conditions, have accrued to one of theenterprises, but, by reason of those conditions, have notso accrued, may be included in the profits of thatenterprise and taxed accordingly.

2. Where a Contracting State includes, in accordance with

the provisions of paragraph 1, in the profits of anenterprise of that Contracting State - and taxesaccordingly - profits on which an enterprise of the otherContracting State has been charged to tax in that otherContracting State and where the competent authorities ofthe Contracting States agree, upon consultation, that allor part of the profits so included are profits which wouldhave accrued to the enterprise of the first-mentionedContracting State if the conditions made between the twoenterprises had been those which would have been madebetween independent enterprises, then that otherContracting State shall make an appropriate adjustment to

the amount of the tax charged therein on those agreedprofits. In determining such adjustment, due regard shallbe had to the other provisions of this Convention.

3. Notwithstanding the provisions of paragraph 1, aContracting State shall not change the profits of anenterprise of that Contracting State in the circumstancesreferred to in that paragraph after seven years from theend of the taxable year in which the profits that would besubjected to such change would, but for the conditionsreferred to in that paragraph, have accrued to thatenterprise. The provisions of this paragraph shall notapply in the case of fraud or wilful default.

Article 10

1. Dividends paid by a company which is a resident of aContracting State to a resident of the other ContractingState may be taxed in that other Contracting State.

2. However, such dividends may also be taxed in theContracting State of which the company paying the dividendsis a resident and according to the laws of that ContractingState, but if the beneficial owner of the dividends is aresident of the other Contracting State, the tax so charged

shall not exceed:


10/27

(a) 5 per cent of the gross amount of the dividendsif the beneficial owner is a company that has

owned directly or indirectly, for the period ofsix months ending on the date on whichentitlement to the dividends is determined, atleast 10 per cent of the voting shares of thecompany paying the dividends;

(b) 15 per cent of the gross amount of the dividendsin all other cases.

This paragraph shall not affect the taxation of thecompany in respect of the profits out of which thedividends are paid.

3. The provisions of subparagraph (a) of paragraph 2shall not apply in the case of dividends paid by a companywhich is entitled to a deduction for dividends paid to itsbeneficiaries in computing its taxable income in theContracting State of which the company is a resident.

4. The term dividends as used in this Article meansincome from shares or other rights, not being debt-claims,participating in profits, as well as income which issubjected to the same taxation treatment as income fromshares by the tax laws of the Contracting State of whichthe company making the distribution is a resident.

5. The provisions of paragraphs 1 and 2 shall not applyif the beneficial owner of the dividends, being a residentof a Contracting State, carries on business in the otherContracting State of which the company paying the dividendsis a resident through a permanent establishment situatedtherein and the holding in respect of which the dividendsare paid is effectively connected with such permanentestablishment. In such case the provisions of Article 7shall apply.

6. Where a company which is a resident of a ContractingState derives profits or income from the other ContractingState, that other Contracting State may not impose any taxon the dividends paid by the company, except insofar assuch dividends are paid to a resident of that otherContracting State or insofar as the holding in respect ofwhich the dividends are paid is effectively connected witha permanent establishment situated in that otherContracting State, nor subject the companys undistributedprofits to a tax on the companys undistributed profits,even if the dividends paid or the undistributed profitsconsist wholly or partly of profits or income arising insuch other Contracting State.


11/27

Article 11

1. Interest arising in a Contracting State and paid to aresident of the other Contracting State may be taxed inthat other Contracting State.

2. However, such interest may also be taxed in theContracting State in which it arises and according to thelaws of that Contracting State, but if the beneficial ownerof the interest is a resident of the other ContractingState, the tax so charged shall not exceed 10 per cent ofthe gross amount of the interest.

3. Notwithstanding the provisions of paragraph 2,interest arising in a Contracting State shall be taxable

only in the other Contracting State if:

(a) the interest is beneficially owned by theGovernment of that other Contracting State, apolitical subdivision or local authority thereof,or the central bank of that other ContractingState or any institution wholly owned by thatGovernment; or

(b) the interest is beneficially owned by a residentof that other Contracting State with respect todebt-claims guaranteed, insured or indirectly

financed by the Government of that otherContracting State, a political subdivision orlocal authority thereof, or the central bank ofthat other Contracting State or any institutionwholly owned by that Government.

4. For the purposes of paragraph 3, the terms thecentral bank and institution wholly owned by thatGovernment mean:

(a) in the case of Kazakhstan:

(i) the National Bank of the Republic ofKazakhstan;

(ii) Joint Stock Company Development Bank ofKazakhstan;

(iii) Joint Stock Company Kazakhstan StateInsurance Corporation for insurance ofexport credit and investment; and


12/27


13/27

7. Interest shall be deemed to arise in a ContractingState when the payer is a resident of that Contracting

State. Where, however, the person paying the interest,whether he is a resident of a Contracting State or not, hasin a Contracting State a permanent establishment inconnection with which the indebtedness on which theinterest is paid was incurred, and such interest is borneby such permanent establishment, then such interest shallbe deemed to arise in the Contracting State in which thepermanent establishment is situated.

8. Where, by reason of a special relationship between thepayer and the beneficial owner or between both of them andsome other person, the amount of the interest, havingregard to the debt-claim for which it is paid, exceeds the

amount which would have been agreed upon by the payer andthe beneficial owner in the absence of such relationship,the provisions of this Article shall apply only to thelast-mentioned amount. In such case, the excess part ofthe payments shall remain taxable according to the laws ofeach Contracting State, due regard being had to the otherprovisions of this Convention.

Article 12

1. Royalties arising in a Contracting State and paid to aresident of the other Contracting State may be taxed in

that other Contracting State.

2. However, such royalties may also be taxed in theContracting State in which they arise and according to thelaws of that Contracting State, but if the beneficial ownerof the royalties is a resident of the other ContractingState, the tax so charged shall not exceed 10 per cent ofthe amount of the royalties.

3. The term royalties as used in this Article meanspayments of any kind received as a consideration for theuse of, or the right to use, any copyright of literary,artistic or scientific work including cinematograph filmsand films or tapes for radio or television broadcasting,any patent, trademark, design or model, plan, secretformula or process, or for the use of, or the right to use,industrial, commercial or scientific equipment, or forinformation concerning industrial, commercial or scientificexperience.


14/27

4. The provisions of paragraphs 1 and 2 shall not applyif the beneficial owner of the royalties, being a resident

of a Contracting State, carries on business in the otherContracting State in which the royalties arise through apermanent establishment situated therein and the right orproperty in respect of which the royalties are paid iseffectively connected with such permanent establishment.In such case the provisions of Article 7 shall apply.

5. Royalties shall be deemed to arise in a ContractingState when the payer is a resident of that ContractingState. Where, however, the person paying the royalties,whether he is a resident of a Contracting State or not, hasin a Contracting State a permanent establishment inconnection with which the liability to pay the royalties

was incurred, and such royalties are borne by suchpermanent establishment, then such royalties shall bedeemed to arise in the Contracting State in which thepermanent establishment is situated.

6. Where, by reason of a special relationship between thepayer and the beneficial owner or between both of them andsome other person, the amount of the royalties, havingregard to the use, right or information for which they arepaid, exceeds the amount which would have been agreed uponby the payer and the beneficial owner in the absence ofsuch relationship, the provisions of this Article shall

apply only to the last-mentioned amount. In such case, theexcess part of the payments shall remain taxable accordingto the laws of each Contracting State, due regard being hadto the other provisions of this Convention.

Article 13

1. Gains derived by a resident of a Contracting Statefrom the alienation of immovable property referred to inArticle 6 and situated in the other Contracting State maybe taxed in that other Contracting State.

2. Gains derived by a resident of a Contracting Statefrom the alienation of shares in a company or of interestsin a partnership or trust may be taxed in the otherContracting State where the shares or the interests deriveat least 50 per cent of their value directly or indirectlyfrom immovable property referred to in Article 6 andsituated in that other Contracting State.


15/27


16/27

(b) the remuneration is paid by, or on behalf of, anemployer who is not a resident of that other

Contracting State; and

(c) the remuneration is not borne by a permanentestablishment which the employer has in thatother Contracting State.

3. Notwithstanding the preceding provisions of thisArticle, remuneration derived in respect of an employmentexercised aboard a ship or aircraft operated ininternational traffic by an enterprise of a ContractingState may be taxed in that Contracting State.

Article 15

Directors fees and other similar payments derived bya resident of a Contracting State in his capacity as amember of the board of directors of a company which is aresident of the other Contracting State may be taxed inthat other Contracting State.

Article 16

1. Notwithstanding the provisions of Articles 7 and 14,income derived by a resident of a Contracting State as anentertainer, such as a theatre, motion picture, radio or

television artiste, or a musician, or as a sportsman, fromhis personal activities as such exercised in the otherContracting State, may be taxed in that other ContractingState.

2. Where income in respect of personal activitiesexercised by an entertainer or a sportsman in his capacityas such accrues not to the entertainer or sportsman himselfbut to another person, that income may, notwithstanding theprovisions of Articles 7 and 14, be taxed in theContracting State in which the activities of theentertainer or sportsman are exercised.

Article 17

Subject to the provisions of paragraph 2 of Article18, pensions and other similar remuneration beneficiallyowned by a resident of a Contracting State shall be taxableonly in that Contracting State.


17/27

Article 18

1. (a) Salaries, wages and other similar remunerationpaid by a Contracting State or a politicalsubdivision or local authority thereof to anindividual in respect of services rendered tothat Contracting State or political subdivisionor local authority, in the discharge of functionsof a governmental nature, shall be taxable onlyin that Contracting State.

(b) However, such salaries, wages and other similarremuneration shall be taxable only in the otherContracting State if the services are rendered inthat other Contracting State and the individual

is a resident of that other Contracting Statewho:

(i) is a national of that other ContractingState; or

(ii) did not become a resident of that otherContracting State solely for the purpose ofrendering the services.

2. (a) Notwithstanding the provisions of paragraph 1,pensions and other similar remuneration paid by,

or out of funds to which contributions are madeor created by, a Contracting State or a politicalsubdivision or local authority thereof to anindividual in respect of services rendered tothat Contracting State or political subdivisionor local authority shall be taxable only in thatContracting State.

(b) However, such pensions and other similarremuneration shall be taxable only in the otherContracting State if the individual is a residentof, and a national of, that other ContractingState.

3. The provisions of Articles 14, 15, 16 and 17 shallapply to salaries, wages, pensions, and other similarremuneration in respect of services rendered in connectionwith a business carried on by a Contracting State or apolitical subdivision or local authority thereof.


18/27

Article 19

Payments which a student or business apprentice who isor was immediately before visiting a Contracting State aresident of the other Contracting State and who is presentin the first-mentioned Contracting State solely for thepurpose of his education or training receives for thepurpose of his maintenance, education or training shall notbe taxed in the first-mentioned Contracting State, providedthat such payments arise from sources outside the first-mentioned Contracting State.

Article 20

Notwithstanding any other provisions of this

Convention, any income and gains derived by a sleepingpartner in respect of a sleeping partnership (TokumeiKumiai) contract or other similar contract may be taxed inthe Contracting State in which such income and gains ariseand according to the laws of that Contracting State.

Article 21

1. Items of income beneficially owned by a resident of aContracting State, wherever arising, not dealt with in theforegoing Articles of this Convention (hereinafter referredto as other income in this Article) shall be taxable only

in that Contracting State.

2. The provisions of paragraph 1 shall not apply to otherincome, other than income from immovable property asdefined in paragraph 2 of Article 6, if the beneficialowner of such other income, being a resident of aContracting State, carries on business in the otherContracting State through a permanent establishmentsituated therein and the right or property in respect ofwhich the other income is paid is effectively connectedwith such permanent establishment. In such case theprovisions of Article 7 shall apply.

3. Where, by reason of a special relationship between theresident referred to in paragraph 1 and the payer orbetween both of them and some other person, the amount ofother income exceeds the amount which would have beenagreed upon between them in the absence of suchrelationship, the provisions of this Article shall applyonly to the last-mentioned amount. In such case, theexcess part of the payments shall remain taxable accordingto the laws of each Contracting State, due regard being hadto the other applicable provisions of this Convention.


19/27

Article 22

1. In the case of Kazakhstan:

(a) Where a resident of Kazakhstan derives incomewhich, in accordance with the provisions of thisConvention, may be taxed in Japan, Kazakhstanshall allow as a deduction from the tax on theincome of that resident, an amount equal to theJapanese tax paid in Japan. The amount ofdeduction, however, shall not exceed that part ofthe Kazakhstan tax which is appropriate to thatincome.

(b) Where in accordance with any provision of the

Convention income derived by a resident ofKazakhstan is exempt from tax in Kazakhstan,Kazakhstan may nevertheless, in calculating theamount of tax on the remaining income of suchresident, take into account the exempted income.

2. Subject to the provisions of the laws of Japanregarding the allowance as a credit against Japanese tax oftax payable in any country other than Japan:

(a) Where a resident of Japan derives income fromKazakhstan which may be taxed in Kazakhstan in

accordance with the provisions of thisConvention, the amount of Kazakhstan tax payablein respect of that income shall be allowed as acredit against the Japanese tax imposed on thatresident. The amount of credit, however, shallnot exceed that part of the Japanese tax which isappropriate to that income.

(b) Where the income derived from Kazakhstan isdividends paid by a company which is a residentof Kazakhstan to a company which is a resident ofJapan and which has owned at least 10 per centeither of the voting shares or of the totalissued shares of the company paying the dividendsduring the period of six months immediatelybefore the day when the obligation to paydividends is confirmed, the credit shall takeinto account Kazakhstan tax payable by thecompany paying the dividends in respect of itsincome.


20/27

3. For the purposes of the preceding paragraphs of thisArticle, income beneficially owned by a resident of a

Contracting State which may be taxed in the otherContracting State in accordance with the provisions of thisConvention shall be deemed to arise from sources in thatother Contracting State.

Article 23

1. Nationals of a Contracting State shall not besubjected in the other Contracting State to any taxation orany requirement connected therewith, which is other or moreburdensome than the taxation and connected requirements towhich nationals of that other Contracting State in the samecircumstances, in particular with respect to residence, are

or may be subjected. The provisions of this paragraphshall, notwithstanding the provisions of Article 1, alsoapply to persons who are not residents of one or both ofthe Contracting States.

2. The taxation on a permanent establishment which anenterprise of a Contracting State has in the otherContracting State shall not be less favourably levied inthat other Contracting State than the taxation levied onenterprises of that other Contracting State carrying on thesame activities. The provisions of this paragraph shallnot be construed as obliging a Contracting State to grant

to residents of the other Contracting State any personalallowances, reliefs and reductions for taxation purposes onaccount of civil status or family responsibilities which itgrants to its own residents.

3. Except where the provisions of paragraph 1 of Article9, paragraph 8 of Article 11, paragraph 6 of Article 12 orparagraph 3 of Article 21 apply, interest, royalties andother disbursements paid by an enterprise of a ContractingState to a resident of the other Contracting State shall,for the purposes of determining the taxable profits of suchenterprise, be deductible under the same conditions as ifthey had been paid to a resident of the first-mentionedContracting State.

4. Enterprises of a Contracting State, the capital ofwhich is wholly or partly owned or controlled, directly orindirectly, by one or more residents of the otherContracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or anyrequirement connected therewith which is other or moreburdensome than the taxation and connected requirements towhich other similar enterprises of the first-mentionedContracting State are or may be subjected.


21/27

5. The provisions of this Article shall, notwithstandingthe provisions of Article 2, apply to taxes of every kind

and description imposed by a Contracting State or apolitical subdivision or local authority thereof.

Article 24

1. Where a person considers that the actions of one orboth of the Contracting States result or will result forhim in taxation not in accordance with the provisions ofthis Convention, he may, irrespective of the remediesprovided by the domestic law of those Contracting States,present his case to the competent authority of theContracting State of which he is a resident or, if his casecomes under paragraph 1 of Article 23, to that of the

Contracting State of which he is a national. The case mustbe presented within three years from the first notificationof the action resulting in taxation not in accordance withthe provisions of the Convention.

2. The competent authority shall endeavour, if theobjection appears to it to be justified and if it is notitself able to arrive at a satisfactory solution, toresolve the case by mutual agreement with the competentauthority of the other Contracting State, with a view tothe avoidance of taxation which is not in accordance withthe provisions of this Convention. Any agreement reached

shall be implemented notwithstanding any time limits in thedomestic law of the Contracting States.

3. The competent authorities of the Contracting Statesshall endeavour to resolve by mutual agreement anydifficulties or doubts arising as to the interpretation orapplication of this Convention. They may also consulttogether for the elimination of double taxation in casesnot provided for in the Convention.

4. The competent authorities of the Contracting Statesmay communicate with each other directly for the purpose ofreaching an agreement in the sense of the precedingparagraphs of this Article.

Article 25

1. The competent authorities of the Contracting Statesshall exchange such information as is foreseeably relevantfor carrying out the provisions of this Convention or tothe administration or enforcement of the domestic lawconcerning taxes of every kind and description imposed onbehalf of the Contracting States, or of their politicalsubdivisions or local authorities, insofar as the taxationthereunder is not contrary to the Convention. The exchange

of information is not restricted by Articles 1 and 2.


22/27

2. Any information received under paragraph 1 by aContracting State shall be treated as secret in the same

manner as information obtained under the domestic law ofthat Contracting State and shall be disclosed only topersons or authorities (including courts and administrativebodies) concerned with the assessment or collection of, theenforcement or prosecution in respect of, the determinationof appeals in relation to the taxes referred to inparagraph 1, or the oversight of the above. Such personsor authorities shall use the information only for suchpurposes. They may disclose the information in publiccourt proceedings or in judicial decisions.

3. In no case shall the provisions of paragraphs 1 and 2be construed so as to impose on a Contracting State the

obligation:

(a) to carry out administrative measures at variancewith the laws and administrative practice of thator of the other Contracting State;

(b) to supply information which is not obtainableunder the laws or in the normal course of theadministration of that or of the otherContracting State;

(c) to supply information which would disclose any

trade, business, industrial, commercial orprofessional secret or trade process, orinformation the disclosure of which would becontrary to public policy.

4. If information is requested by a Contracting State inaccordance with this Article, the other Contracting Stateshall use its information gathering measures to obtain therequested information, even though that other ContractingState may not need such information for its own taxpurposes. The obligation contained in the precedingsentence is subject to the limitations of paragraph 3 butin no case shall such limitations be construed to permit aContracting State to decline to supply information solelybecause it has no domestic interest in such information.

5. In no case shall the provisions of paragraph 3 beconstrued to permit a Contracting State to decline tosupply information solely because the information is heldby a bank, other financial institution, nominee or personacting in an agency or a fiduciary capacity or because itrelates to ownership interests in a person.


23/27

Article 26

1. The Contracting States shall endeavour to lendassistance to each other in the collection of tax to theextent needed to ensure that any exemption or reduced rateof tax granted under this Convention shall not be enjoyedby persons not entitled to such benefits. The ContractingState making such collections shall be responsible to theother Contracting State for the sums thus collected.

2. In no case shall the provisions of paragraph 1 beconstrued so as to impose on a Contracting State theobligation:

(a) to carry out administrative measures at variance

with the laws and administrative practice of thator of the other Contracting State;

(b) to carry out measures which would be contrary topublic policy.

Article 27

Nothing in this Convention shall affect the fiscalprivileges of members of diplomatic missions or consularposts under the general rules of international law or underthe provisions of special agreements.

Article 28

1. Each of the Contracting States shall send throughdiplomatic channel to the other the notification confirmingthat its internal procedures necessary for the entry intoforce of this Convention have been completed. TheConvention shall enter into force on the thirtieth dayafter the date of receipt of the latter notification.

2. This Convention shall apply:

(a) with respect to taxes withheld at source, foramounts taxable on or after 1 January in thecalendar year next following that in which theConvention enters into force;

(b) with respect to taxes on income which are notwithheld at source, as regards income for anytaxable year beginning on or after 1 January inthe calendar year next following that in whichthe Convention enters into force; and


24/27

(c) with respect to other taxes, as regards taxes forany taxable year beginning on or after 1 January

in the calendar year next following that in whichthe Convention enters into force.

Article 29

This Convention shall remain in force until terminatedby a Contracting State. Either Contracting State mayterminate the Convention, through diplomatic channels, bygiving notice of termination at least six months before theend of any calendar year beginning after the expiry of fiveyears from the date on which the Convention enters intoforce. In such event, the Convention shall cease to haveeffect:

(a) with respect to taxes withheld at source, foramounts taxable on or after 1 January in thecalendar year next following that in which thenotice is given;

(b) with respect to taxes on income which are notwithheld at source, as regards income for anytaxable year beginning on or after 1 January inthe calendar year next following that in whichthe notice is given; and

(c) with respect to other taxes, as regards taxes forany taxable year beginning on or after 1 Januaryin the calendar year next following that in whichthe notice is given.

IN WITNESS WHEREOF the undersigned, being dulyauthorised thereto by their respective Governments, havesigned this Convention.


25/27

DONE in duplicate at Tokyo this nineteenth day ofDecember, 2008, in the English language.

For Japan: For the Republic ofKazakhstan:

Hirofumi Nakasone Akylbek A. Kamaldinov


26/27

Protocol

At the signing of the Convention between Japan and theRepublic of Kazakhstan for the Avoidance of Double Taxationand the Prevention of Fiscal Evasion with respect to Taxeson Income (hereinafter referred to as the Convention),Japan and the Republic of Kazakhstan have agreed upon thefollowing provisions, which shall form an integral part ofthe Convention.

1. With reference to paragraph 2 of Article 9 of theConvention:

In case where Kazakhstan makes adjustment referred toin that paragraph, nothing in the provisions of thatparagraph shall be construed as imposing on Kazakhstan theobligation to agree to the profits to be adjusted.


Nothing in the paragraph shall be construed aspreventing Kazakhstan from changing the profits of anenterprise of Kazakhstan derived from the use of subsurfaceunder a contract thereon in accordance with the provisions

of paragraph 1 of the Article before the end of the fiveyear period from the date on which the period of thecontract is completed.


(a) in the case of royalties arising in Kazakhstan,the term the amount of the royalties means theamount equal to 50 per cent of the gross amountof the royalties;

(b) in the case of royalties arising in Japan, theterm 10 per cent of the amount of the royaltiesmeans 5 per cent of the gross amount of theroyalties.



27/27

A Contracting State may decline to supply informationrelating to confidential communications between attorneys,

solicitors or other admitted legal representatives in theirrole as such and their clients to the extent that thecommunications are protected from disclosure under thedomestic law of that Contracting State.

5. Nothing in the Convention shall be construed aspreventing a Contracting State from imposing an additionaltax on the profits (other than those derived from theoperation of ships or aircraft in international traffic) ofa company, being a resident of the other Contracting State,attributable to a permanent establishment of the companysituated in the first-mentioned Contracting State, inaddition to the tax which would be chargeable on the

profits of a company, being a resident of the first-mentioned Contracting State, provided that any additionaltax so charged shall not exceed 5 per cent of the amount ofsuch profits. For the purpose of this paragraph, theprofits subjected to the additional tax shall be determinedafter deducting from the profits attributable to thepermanent establishment during the taxable year concernedall taxes, other than the additional tax, imposed in thefirst-mentioned Contracting State during the taxable yearconcerned.

IN WITNESS WHEREOF the undersigned, being duly

authorised thereto by their respective Governments, havesigned this Protocol.

DONE in duplicate at Tokyo this nineteenth day ofDecember, 2008, in the English language.

For Japan: For the Republic ofKazakhstan:

Hirofumi Nakasone Akylbek A. Kamaldinov

dtc agreement between japan and kazakhstan

Documents