India-Japan DTAA
Treaty signed: March 7, 2006 | Effective from: December 29, 2006
● Live · Rates served from /api/tax-rules/dtaa/JP
Dividends
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Interest
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Royalties
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Capital Gains
Fees for Technical Services
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Key Treaty Provisions
- Modern treaty (2006) - covers all income types including specific provisions for aircraft/shipping operations
- Important for India-Japan manufacturing corridor (automobiles: Suzuki-Maruti, Honda; electronics: Sony, Panasonic)
- Japan has also ratified MLI; PPT applies to India-Japan treaty
- Construction PE: 12 months (longer than most treaties)
- Associate enterprise adjustments: transfer pricing aligned with OECD guidelines
Frequently Asked Questions
What withholding rate applies on dividends paid by an Indian company to a Japanese company?▾
Under the India-Japan DTAA, dividends are taxable at 10% in India. This applies to both portfolio investors and companies with significant shareholding. The Japanese company must provide TRC from the National Tax Agency of Japan to claim the 10% rate.
Is PE created if a Japanese company sends engineers to India for an installation project?▾
If the engineers are present in India for more than 12 months (construction PE threshold), a PE is created and business profits attributable to that PE are taxable in India. Short-term projects under 12 months typically do not create a PE.
Does the India-Japan DTAA cover Japanese working holiday visa holders in India?▾
The Dependent Personal Services article covers individuals employed by Japanese companies sent to India. If the Japanese employee is present in India for less than 183 days and paid by the Japanese employer (not borne by Indian PE), their salary may not be taxable in India.
Browse all articles
20 articlesArticle 1 of the India-Japan DTAA governs persons covered.…
Article 4 of the India-Japan DTAA governs resident.…
Article 5 of the India-Japan DTAA governs permanent establishment.…
Article 7 of the India-Japan DTAA governs business profits.…
Article 8 of the India-Japan DTAA governs shipping, inland waterways, and air transport.…
Article 9 of the India-Japan DTAA governs associated enterprises.…
Dividends paid by a company resident in one State to a resident of the other State may be taxed in the recipie…
Interest arising in one State and paid to a resident of the other may be taxed in the recipient's State, with …
Royalties paid to a resident of the other State may be taxed in the recipient's State; the source State retain…
FTS - payments for managerial, technical, or consultancy services - are taxed at the treaty rate where a speci…
Article 13 allocates taxing rights over capital gains between India and Japan.…
Article 14 of the India-Japan DTAA governs independent personal services.…
Article 15 sets the taxing rights for salaries earned by an employee of one State who works in the other.…
Article 17 of the India-Japan DTAA governs artistes and sportspersons.…
Article 18 of the India-Japan DTAA governs pensions.…
Article 19 of the India-Japan DTAA governs government service.…
Article 23 sets out the mechanism by which double taxation is eliminated - typically through a foreign tax cre…
MAP allows the competent authorities of India and Japan to resolve disputes - particularly transfer pricing di…
Allows the competent authorities to exchange information necessary to apply the treaty or domestic tax laws.…
Treaty benefits are denied where the principal purpose of the transaction was to obtain them.…
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