The treaty updates business and investment taxation, reduces withholding rates, and strengthens measures against tax evasion.
Japan and Kyrgyzstan signed a new tax treaty on 19 December 2025 to eliminate double taxation on income and strengthen measures against tax evasion and avoidance.
The treaty updates rules on the taxation of business profits and investment income, introduces anti-abuse provisions, and reinforces the exchange of information between tax authorities. Both governments said the agreement is expected to reduce double taxation, curb international tax evasion, and promote bilateral investment and economic cooperation.
Under the treaty, business profits of an enterprise will be taxable in the other contracting state only if the enterprise operates there through a permanent establishment, and only to the extent of the profits attributable to that establishment.
The treaty also revises withholding tax rates on investment income:
- Dividends: taxed at a maximum of 5% if the beneficial owner holds at least 10% of voting power or capital for six months or more; otherwise, 10%.
- Interest: exempt when received by governments or related entities; the general maximum rate is reduced to 8%.
- Royalties: subject to a maximum withholding tax rate of 8%.
These changes reduce the rates under the previous convention and align the bilateral tax framework with modern international standards.
Earlier, Kyrgyzstan and Japan agreed in principle on a new income tax treaty on 14 October 2025.
