Financial Services Tax News Cayman Islands / Japan Tax agreement www.pwc.com/jp/tax

www.pwc.com/jp/tax
Financial Services Tax News
Cayman Islands / Japan
Tax agreement
March 2011
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On February 7, 2011, the Ministry
of Finance (Zaimusho) announced
that the Governments of the
Cayman Islands and Japan signed
an agreement for the exchange of
information for the purpose of the
prevention of fiscal evasion and
the allocation of rights of taxation
with respect to income of
individuals (“Agreement”).
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Cayman Islands / Japan Tax Agreement
On May 26, 2010, the Governments of the Cayman
Islands and Japan reached agreement in principle,
and subsequently on February 7, 2011, the Ministry of
Finance announced that the Agreement was signed by
the Governments of the Cayman Islands and Japan.
Since the G-20 London meeting and declaration on
April 2, 2009 regarding the importance of preventing
tax evasion and tax abuse using so-called tax haven
countries, jointly with the OECD listing jurisdictions
assessed against the international standard for
exchange of information, the number of Tax
Information Exchange Agreements (“TIEAs”)
expanded significantly in the last few years. Recent
TIEAs signed by Japan are summarised in a table at
the end of this Newsletter. Most TIEAs are based on
the OECD exchange of information on tax matters
model published in 2002 and seek to improve
transparency and ensure effectiveness of exchange of
information between Governments.
This Agreement also includes provisions aimed at
exempting tax at source for certain income of
individuals in particular pension entitlements, and so
is more than just a standard TIEA.
This Newsletter provides a general outline of key
provisions of the Agreement.
Financial Services Tax News
Exchange of information
Each competent tax authority shall provide assistance through exchange of information that is foreseeably
relevant for the carrying out of this Agreement.
Such information includes information that is foreseeably relevant to the determination, assessment and
collection of such taxes, the recovery and enforcement of tax claims or the investigation or prosecution of tax
matters.
Information shall be exchanged in accordance with the Agreement and shall be treated as confidential in the
manner provided.
Taxes Covered
The existing taxes of every kind and description imposed shall apply. Moreover, any identical or substantially
similar taxes that are imposed after the date of signature of this Agreement in addition to, or in place of, the
existing taxes shall apply.
Exchange of Information upon request
The competent authority of the requested party shall provide upon request information for the purpose of this
Agreement.
If the information in the possession of the requested party is insufficient to enable it to comply with the request
for information, the requested party shall use all relevant information gathering measures to provide the
requesting party with the information requested notwithstanding that the requested party may not need such
information for its own tax purposes.
Each contracting party shall ensure that its competent authority has the authority to obtain and provide upon
request:
a) information held by banks, other financial institutions, and any person acting in an agency or fiduciary
capacity including nominees and trustees; and
b) information regarding the ownership of companies, partnerships, trusts, foundations and other persons.
The competent authority of the requesting party shall provide certain information when making a request to
demonstrate the foreseeable relevance of the information sought.
Allocation of rights of taxation
Pensions and other similar remuneration beneficially owned by a resident of a Contracting Party shall be taxable
only in that Contracting Party. For example, if beneficiaries to a Japanese pension fund immigrate Cayman
Islands and become residents, Japanese income tax will not apply to distributions made by the pension fund.
Entry into force
The Governments of the Contracting Parties shall notify each other, in writing, of the completion of their
respective internal procedures necessary for the entry into force of this Agreement. The Agreement shall enter
into force on the thirtieth day after the latter of the dates of receipt of the notifications, and shall be applicable
for taxes levied on or after the date on which the Agreement enters into force.
However, the above allocation of rights of taxation shall be applicable:
a) with respect to taxes withheld at source, for amounts taxable on or after 1 January in the calendar year next
following that in which this Agreement enters into force; and
b) with respect to taxes on income which are not withheld at source, as regards income for any taxable year
beginning on or after 1 January in the calendar year next following that in which this Agreement enters into
force.
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Financial Services Tax News
Current status of recent exchange of information agreements (TIEAs) with other
countries/jurisdictions
Country/Jurisdiction
Status of Agreement for exchange information
Relevant Date
Bermuda
Entered into force
August 1, 2010
Guernsey
Agreed in principle
January 27, 2011
Bahamas
Signed
January 28, 2011
Isle of Man
Agreed in principle
March 18, 2011
Jersey
Agreed in principle
March 18, 2011
The full text is available electronically on the Ministry of Finance’s website at:
http://www.mof.go.jp/english/tax_policy/others/sy220526eke.htm
http://www.mof.go.jp/tax_policy/summary/international/press_release/sy230207ke_b.pdf
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Financial Services Tax News
For more detailed information, please do not hesitate to contact your financial tax
services representative or any of the following members:
Zeirishi-Hojin PricewaterhouseCoopers
Financial Services
Kasumigaseki Bldg. 15F, 2-5 Kasumigaseki 3-chome, Chiyoda-ku, Tokyo 100-6015
Telephone: 81-3-5251-2400, http://www.pwc.com/jp/tax
Partner
Senior Manager
Manager
Sachihiko Fujimoto
81-3-5251-2423
[email protected]
Katsuyo Oishi
81-3-5251-2565
[email protected]
Yuka Matsuda
81-3-5251-2556
[email protected]
Tetsuo Iimura
81-3-5251-2834
[email protected]
Akemi Kito
81-3-5251-2461
[email protected]
Hiroshi Takagi
81-3-5251-2788
[email protected]
Yoko Kawasaki
81-3-5251-2450
[email protected]
Raymond Kahn
81-3-5251-2909
[email protected]
Stuart Porter
81-3-5251-2944
[email protected]
Marc Lim
81-3-5251-2867
[email protected]
Kenji Nakamura
81-3-5251-2589
[email protected]
Nobuyuki Saiki
81-3-5251-2570
[email protected]
Akiko Hakoda
81-3-5251-2486
[email protected]
Kyoko Imamura
81-3-5251-2855
[email protected]
Soichi Toyama
81-3-5251-6212
[email protected]
Daniel Lutz
81-3-5251-6640
[email protected]
Mami Sasaki
81-80-3592-6111
[email protected]
Takashi Nonaka
81-80-3592-6104
[email protected]
Hiroko Suzuki
81-80-3592-6100
[email protected]
Nobuyoshi Hiruma
81-80-3592-6099
[email protected]
Miyuki Kajiwara
81-80-3592-6028
[email protected]
Naoko Makihira
81-80-3592-6016
[email protected]
Seigo Sugiyama
81-80-3592-6017
[email protected]
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