MINISIRY OF FINANCE
(Department of Revenue)
NOI'IFlCUlON
New Delhi, the 19th July, 2006
(INCOME-TAX)
S.O. 1I36(E).-Whereas the annexed Protocol amending the Convention between the Government of the Republic
of India and the Government of Japan for the Avoidance of DouMe Taxation and the Prevention of Fiscal Evasion with
respect to Taxes on Income shall enter into force on the 28th day of June, 2006 in accordance with paragraph 1 of Article V
of the Protocol amending the Convention for giving effect to the provisions of the said Protocol;
Now, therefore, in exercise of the powers conferred by Section 90 of the Income·tax Act, 1961 (43 of 1961), the
Central Government hereby directs that all the provisions of the said Protocol amending the Convention between the
Government of the Republic of India and the Government of Japan for the Avoidance of Double Taxation and the Prevention
of Fiscal Evasion with respect to Taxes on Income shall be given effect to in the Union ofIndia with effect from the 28th day
of June, 2006.
[Notification No. I86/Z006/F.No. S06/69/81-FTD-I J
D.P. SENGUPTA, JI. Secy.
ANNEXURE
Protocol Amending the Convention between the Government of the Republic of India and the Government ofJapan for
the A viodance of Double Thxation and the Prevention of Fiscal Evasion with Respect to Thxes on Income
The Government ofthe Republic ofIndia and the Government ofJapan,
Desiring to amend the Convention between the Government of the Republic of India and the Government of
Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on
Income signed at New Delhi on 7th March, 1989 (hereinafier referred to as "the Convention"),
Have agreed as follows:
ARTICLE I
Paragraph 2 of Article 10 of the Convention shall be deleted and replaced by the following:
"Z. However, such dividends may also be taxed in the Contracting State of which the company paying the
dividends is a resident, and according to the laws of that Contracting State, but if the recipient is the
beneficial owner of the dividends the tax so charged shall not exceed 10 per cent of the gross amount of the
dividends.
The provisions of this paragraph shall not affect the taxation of the company in respect of the profits out of
which the dividends are paid."
4
THE GAZETTE OF INDIA: EXTRAORDINARY __ , ~
[P~TIl-::~Ec 3(ii)1
ARI1crnn
Paragraph 2 of Article 11 of the Convention shall be deleted and replaced by the following:
"2. However, such interest may also be taxed in the Contracting State in which it arises, and according to the
laws of the Contracting State, but if the recipient is the beneficial owner of the interest the tax so charged
shall not exceed 10 per cent of the gross amount of the interest."
ARI1crnm
Paragraph 2 of Article 12 of the Convention shall be deleted and replaced by the following:
"2, However, such royalties and fees for technical services may also be taxed in the Contracting State in
which they arise and according to the laws of that Contracting State, but if the recipient is the beneficial
owner of the royalties or fees for technical services, the tax so charged shall not exce~d 10 per cent ur lhe
gross amount of the royalties or fees for technical services."
ARTICLE IV
Sub-paragraph (c) of paragraph 3 of Article 23 of the Convention shall be deleted.
ARI1CLEV
1.
This Protocol shall be approved in accordance with the legal procedures of each of the Contractin~
States and shall enter into force on the thirtieth day after the date of exchange of diplomatic note,
indicating such approval.
2
This Protocol shall be applicable :
(a) in Japan :
(i) with respect to taxes withheld at source:
(aa) for amounts taxable on or after ]st luly of the ·calendar year in which the Protocol ent~r~ intu
force, if the Protocol enters into force before 1st July of a calendar year;
or
(bb) for amounts taxable on or after 1st January of the calendar year next following the year in which
the Protocol enters into force, iftbe Protocol enters into force after 30th June of a calendar year; and
(ii) with respect to taxes on income which are not withheld at source, as regards income for any laxahle
year beginning on or after 1st January of the calendar year next following that in which the Protocol
enters into force; and
(b) in India:
(i) with respect to taxes withheld at source, for amounts paid or credited on or after lot April of the
calendar year next following that in which the Protocol enters into force;
and
(ii) with respect to taxes on income for any previous year beginning on or after 1st April of the calendar
year next following that in which the Protocol enters into force.
3. This Protocol shall remain in effect as long as the Convention remains in force.
In witness whereof the undersigned, duly authorized thereto by their respective Governrnent~, have :-.igncu
thls Protocol.
Done in duplicate at Tokyo on this 24th day of February, 2006 in the Hindi. Japanese and English lanh'1Jagc"
each text heing equally authentic. In case of any divergence of interpretations, the English text shall prevail.
For the Government of the Republic of India:
For the Government of Japan:
Sd./-
Sd.:-
(M. L TRIPAIRI)
(TAROASO)
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and Published by the Controller of Publicalions, Delhi-llOOS4.
