As published on georgiatoday.ge, Thursday 22 October, 2020.
Double taxation avoidance treaty has been reached with Japan.
A meeting was held between the Deputy Minister of Finance of Georgia, Lasha Khutsishvili, and the Deputy Ambassador Extraordinary and Plenipotentiary of Japan to Georgia, Masataka Obata, within the framework of which negotiations were concluded and an agreement was reached on the revised text of the Convention on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion.
It is particularly important that this Convention replaces the 1986 Agreement between Japan and the Soviet Union, and henceforth, the Agreement between Georgia and Japan on the avoidance of double taxation is based on a new legal framework document.
The new agreement will help deepen economic cooperation and attract investments between Georgia and Japan.
The Convention is based on the updated 2017 model of the Organization for Economic Cooperation and Development (OECD) and envisages the standards set by the Base Erosion and Profit Shifting (BEPS) project.
The main purposes of the Treaty on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion are to promote economic cooperation between countries and encourage foreign investments. The text of the treaties concluded by Georgia is based on the OECD Model Tax Convention, based on which taxing rights are distributed between treaty partners.
Particularly, resident of one Contracting State deriving income from the other Contracting State may be taxed whether in the source state of income or in the country of residence. For the avoidance of double taxation, the resident of one Contracting State deriving income from the other Contracting State will be credited against tax in the source state.
Currently, 56 Treaties on the” Avoidance of Double Taxation and the Prevention of Fiscal Evasion” are in force.