Japan and Oman Income Tax Treaty (2014) has been signed on 9 January 2014 and details of the treaty available now. The treaty generally follows the OECD Model (2010).
The maximum rates of withholding tax are:
- 10% on dividends (5% if the beneficial owner is a company that has owned directly or indirectly, for the period of 6 months ending on the date on which entitlement to the dividends is determined, at least 10% of the voting shares of the company paying the dividends);
- 10% on interest, subject to exceptions and 10% on royalties.
Deviations found from the OECD Model that:
– Article 5 (Permanent establishments) of the treaty includes a building site, a construction, assembly or installation project or supervisory activities in connection therewith, but only if such site, project or activities last more than 9 months;
– Article 6 (Income from immovable property) of the treaty, which follows the UN Model (2011), also applies to income from immovable property used for the performance of independent personal services; and
– The treaty contains a separate article on taxation of independent personal services (article 14), which follows the UN Model (2011).
The treaty was concluded in the English and Japanese languages. In the case of deviation, however, the English text prevails. Also, Japan generally provides for the credit method to avoid double taxation, whereas Oman provides for the exemption method.
