CONVENTION BETWEENJAPAN AND THE UNITED ARAB EMIRATESFOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME

CONVENTION BETWEENJAPAN AND THE UNITED ARAB EMIRATESFOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME

Japan and the United Arab Emirates,
Desiring to conclude a Convention for the avoidance of
double taxation and the prevention of fiscal evasion withrespect to taxes on income,Have agreed as follows:
Article 1
This Convention shall apply to persons who areresidents of one or both of the Contracting States.
Article 2
1.

This Convention shall apply to the following taxes:(a)in the case of Japan:(i)

the income tax;(ii)

the corporation tax;(iii)

the special income tax for reconstruction;(iv)

the special corporation tax forreconstruction; and(v)

the local inhabitant taxes(hereinafter referred to as “Japanese tax”);(b)in the case of the United Arab Emirates:(i)

the income tax; and(ii)

the corporation tax(hereinafter referred to as “U.A.E. tax”).

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2.
This Convention shall apply also to any identical or
substantially similar taxes that are imposed after the dateof signature of the Convention in addition to, or in placeof, those referred to in paragraph 1. The competentauthorities of the Contracting States shall notify eachother of any significant changes that have been made in
their respective taxation laws, within a reasonable periodof time after such changes.
Article 31.
For the purposes of this Convention, unless thecontext otherwise requires:(a)the term “Japan”, when used in a geographicalsense, means all the territory of Japan,
including its territorial sea, in which the laws
relating to Japanese tax are in force, and all
the area beyond its territorial sea, including
the seabed and subsoil thereof, over which Japan
has sovereign rights in accordance withinternational law and in which the laws relating
to Japanese tax are in force;(b)

the term “United Arab Emirates”, when used in ageographical sense, means the territory of theUnited Arab Emirates which is under its
sovereignty including the territorial sea andairspace, as well as submarine areas over which
the United Arab Emirates exercises, in conformity
with international law and the laws of the United
Arab Emirates, sovereign rights in respect of any
activity carried on in connection with the
exploration for or the exploitation of thenatural resources;(c)the terms “a Contracting State” and “the other
Contracting State” mean Japan or the United ArabEmirates, as the context requires;(d)the term “tax” means Japanese tax or U.A.E. tax,
as the context requires;(e)the term “person” includes an individual, acompany and any other body of persons;(f)the term “company” means any body corporate or
any entity that is treated as a body corporate
for tax purposes;

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(g)

the term “enterprise” applies to the carrying onof any business;(h)the terms “enterprise of a Contracting State” and“enterprise of the other Contracting State” mean
respectively an enterprise carried on by aresident of a Contracting State and an enterprise
carried on by a resident of the other Contracting
State;(i)the term “international traffic” means any
transport by a ship or aircraft operated by anenterprise of a Contracting State, except when
the ship or aircraft is operated solely between
places in the other Contracting State;(j)the term “national” of a Contracting State means:

(k)

(l)

(i)

in the case of Japan, any individual
possessing the nationality of Japan and any
juridical person created or organised under
the laws of Japan and any organisation
without juridical personality treated forthe purposes of Japanese tax as a juridical
person created or organised under the lawsof Japan; and(ii)

in the case of the United Arab Emirates, allindividuals possessing the nationality of
the United Arab Emirates and all legal
persons and partnerships deriving theirstatus as such from the laws in force in the
United Arab Emirates;

the term “competent authority” means:(i)in the case of Japan, the Minister ofFinance or his authorised representative;
and

(ii)

in the case of the United Arab Emirates, theMinister of Finance or his authorised
representative; andthe term “business” includes the performance ofprofessional services and of other activities ofan independent character.

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2.
As regards the application of this Convention at any
time by a Contracting State, any term not defined thereinshall, unless the context otherwise requires, have themeaning that it has at that time under the laws of thatContracting State for the purposes of the taxes to which
the Convention applies, any meaning under the applicable
tax laws of that Contracting State prevailing over ameaning given to the term under other laws of thatContracting State.
Article 41.
For the purposes of this Convention, the term
“resident of a Contracting State” means any person who,
under the laws of that Contracting State, is liable to tax
therein by reason of his domicile, residence, place of heador main office, place of management or any other criterionof a similar nature, and also includes that Contracting
State and any political subdivision or local authority
thereof. This term, however, does not include any person
who is liable to tax in that Contracting State in respect
only of income from sources in that Contracting State.
2.
Where by reason of the provisions of paragraph 1 an
individual is a resident of both Contracting States, thenhis status shall be determined as follows:(a)he shall be deemed to be a resident only of theContracting State in which he has a permanent
home available to him; if he has a permanent homeavailable to him in both Contracting States, heshall be deemed to be a resident only of theContracting State with which his personal andeconomic relations are closer (centre of vitalinterests);(b)

if the Contracting State in which he has his
centre of vital interests cannot be determined,
or if he has not a permanent home available tohim in either Contracting State, he shall bedeemed to be a resident only of the Contracting
State in which he has an habitual abode;(c)

if he has an habitual abode in both Contracting
States or in neither of them, he shall be deemed
to be a resident only of the Contracting State ofwhich he is a national;(d)

if he is a national of both Contracting States orof neither of them, the competent authorities of
the Contracting States shall settle the question
by mutual agreement.

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3.
Where by reason of the provisions of paragraph 1 aperson other than an individual is a resident of bothContracting States, then the competent authorities of theContracting States shall determine by mutual agreement theContracting State of which that person shall be deemed to
be a resident for the purposes of this Convention.
Article 51.
For the purposes of this Convention, the term
“permanent establishment” means a fixed place of businessthrough which the business of an enterprise is wholly or
partly carried on.
2.
The term “permanent establishment” includes
especially:(a)a place of management;(b)a branch;(c)an office;(d)a factory;(e)a workshop; and(f)a mine, an oil or gas well, a quarry or any otherplace of extraction of natural resources.

3.
A building site or construction or installation
project constitutes a permanent establishment only if it
lasts more than twelve months.
4.
Notwithstanding the preceding provisions of this
Article, the term “permanent establishment” shall be deemed
not to include:(a)the use of facilities solely for the purpose ofstorage, display or delivery of goods ormerchandise belonging to the enterprise;(b)

the maintenance of a stock of goods ormerchandise belonging to the enterprise solely
for the purpose of storage, display or delivery;(c)the maintenance of a stock of goods ormerchandise belonging to the enterprise solely
for the purpose of processing by anotherenterprise;

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(d)

the maintenance of a fixed place of businesssolely for the purpose of purchasing goods ormerchandise or of collecting information, for theenterprise;(e)the maintenance of a fixed place of businesssolely for the purpose of carrying on, for theenterprise, any other activity of a preparatory
or auxiliary character;(f)the maintenance of a fixed place of businesssolely for any combination of activities
mentioned in subparagraphs (a) to (e), provided
that the overall activity of the fixed place ofbusiness resulting from this combination is of apreparatory or auxiliary character.

5.
Notwithstanding the provisions of paragraphs 1 and 2,
where a person - other than an agent of an independent
status to whom the provisions of paragraph 6 apply - isacting on behalf of an enterprise and has, and habitually
exercises, in a Contracting State an authority to conclude
contracts in the name of the enterprise, that enterpriseshall be deemed to have a permanent establishment in thatContracting State in respect of any activities which that
person undertakes for the enterprise, unless the activities
of such person are limited to those mentioned in paragraph
4 which, if exercised through a fixed place of business,would not make this fixed place of business a permanentestablishment under the provisions of that paragraph.
6.
An enterprise shall not be deemed to have a permanentestablishment in a Contracting State merely because it
carries on business in that Contracting State through a
broker, general commission agent or any other agent of an
independent status, provided that such persons are acting
in the ordinary course of their business.
7.
The fact that a company which is a resident of aContracting State controls or is controlled by a company
which is a resident of the other Contracting State, or
which carries on business in that other Contracting State(whether through a permanent establishment or otherwise),shall not of itself constitute either company a permanentestablishment of the other.
Article 6
1.
Income derived by a resident of a Contracting State
from immovable property (including income from agriculture
or forestry) situated in the other Contracting State may betaxed in that other Contracting State.

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2.
The term “immovable property” shall have the meaning
which it has under the laws of the Contracting State inwhich the property in question is situated. The term shallin any case include property accessory to immovable
property, livestock and equipment used in agriculture andforestry, rights to which the provisions of general law
respecting landed property apply, usufruct of immovable
property and rights to variable or fixed payments as
consideration for the working of, or the right to work,
mineral deposits, sources and other natural resources;
ships and aircraft shall not be regarded as immovable
property.
3.
The provisions of paragraph 1 shall apply to income
derived from the direct use, letting, or use in any otherform of immovable property.
4.
The provisions of paragraphs 1 and 3 shall also apply
to the income from immovable property of an enterprise.
Article 7
1.
The profits of an enterprise of a Contracting State
shall be taxable only in that Contracting State unless theenterprise carries on business in the other Contracting
State through a permanent establishment situated therein.
If the enterprise carries on business as aforesaid, theprofits of the enterprise may be taxed in that other
Contracting State but only so much of them as is
attributable to that permanent establishment.
2.
Subject to the provisions of paragraph 3, where an
enterprise of a Contracting State carries on business inthe other Contracting State through a permanentestablishment situated therein, there shall in eachContracting State be attributed to that permanentestablishment the profits which it might be expected tomake if it were a distinct and separate enterprise engaged
in the same or similar activities under the same or similar
conditions and dealing wholly independently with theenterprise of which it is a permanent establishment.
3.
In determining the profits of a permanentestablishment, there shall be allowed as deductions
expenses which are incurred for the purposes of thepermanent establishment, including executive and generaladministrative expenses so incurred, whether in theContracting State in which the permanent establishment issituated or elsewhere.

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4.
Insofar as it has been customary in a Contracting
State to determine the profits to be attributed to apermanent establishment on the basis of an apportionment of
the total profits of the enterprise to its various parts,
nothing in paragraph 2 shall preclude that Contracting
State from determining the profits to be taxed by such anapportionment as may be customary; the method ofapportionment adopted shall, however, be such that theresult shall be in accordance with the principles containedin this Article.
5.
No profits shall be attributed to a permanentestablishment by reason of the mere purchase by thatpermanent establishment of goods or merchandise for theenterprise.
6.
For the purposes of the preceding paragraphs of this
Article, the profits to be attributed to the permanentestablishment shall be determined by the same method year
by year unless there is good and sufficient reason to thecontrary.
7.
Where profits include items of income which are dealt
with separately in other Articles of this Convention, thenthe provisions of those Articles shall not be affected by
the provisions of this Article.
Article 81.
Profits from the operation of ships or aircraft ininternational traffic carried on by an enterprise of aContracting State shall be taxable only in that Contracting
State.
2.
Notwithstanding the provisions of Article 2, where an
enterprise of a Contracting State carries on the operationof ships or aircraft in international traffic, thatenterprise, if an enterprise of the United Arab Emirates,
shall be exempt from the enterprise tax in Japan, and, if
an enterprise of Japan, shall be exempt from any tax
similar to the enterprise tax in Japan which may hereafter
be imposed in the United Arab Emirates.
3.
The provisions of the preceding paragraphs of this
Article shall also apply to profits from the participation
in a pool, a joint business or an international operating
agency.

- 8 -Article 9
1.

Where
(a)

an enterprise of a Contracting State participates
directly or indirectly in the management, control
or capital of an enterprise of the other
Contracting State, or(b)

the same persons participate directly or
indirectly in the management, control or capitalof an enterprise of a Contracting State and an
enterprise of the other Contracting State,

and in either case conditions are made or imposed between
the two enterprises in their commercial or financial
relations which differ from those which would be madebetween independent enterprises, then any profits which
would, but for those conditions, have accrued to one of theenterprises, but, by reason of those conditions, have notso accrued, may be included in the profits of thatenterprise and taxed accordingly.
2.
Where a Contracting State includes, in accordance withthe provisions of paragraph 1, in the profits of anenterprise of that Contracting State - and taxes
accordingly - profits on which an enterprise of the other
Contracting State has been charged to tax in that other
Contracting State and where the competent authorities of
the Contracting States agree, upon consultation, that allor part of the profits so included are profits which would
have accrued to the enterprise of the first-mentioned
Contracting State if the conditions made between the twoenterprises had been those which would have been madebetween independent enterprises, then that other
Contracting State shall make an appropriate adjustment tothe amount of the tax charged therein on those agreed
profits. In determining such adjustment, due regard shallbe had to the other provisions of this Convention.
Article 10
1.
Dividends paid by a company which is a resident of aContracting State to a resident of the other Contracting
State may be taxed in that other Contracting State.
2.
However, such dividends may also be taxed in theContracting State of which the company paying the dividends
is a resident and according to the laws of that Contracting
State, but if the beneficial owner of the dividends is a
resident of the other Contracting State, the tax so charged
shall not exceed:

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(a)

5 per cent of the gross amount of the dividends
if the beneficial owner is a company that has
owned directly or indirectly, for the period of
six months ending on the date on which
entitlement to the dividends is determined, atleast 10 per cent of the voting shares of thecompany paying the dividends;(b)

10 per cent of the gross amount of the dividends
in all other cases.

This paragraph shall not affect the taxation of thecompany in respect of the profits out of which thedividends are paid.
3.
The term “dividends” as used in this Article means
income from shares or other rights, not being debt-claims,
participating in profits, as well as income which is
subjected to the same taxation treatment as income fromshares by the tax laws of the Contracting State of which
the company making the distribution is a resident.
4.
The provisions of paragraphs 1 and 2 shall not apply
if the beneficial owner of the dividends, being a residentof a Contracting State, carries on business in the other
Contracting State of which the company paying the dividends
is a resident through a permanent establishment situatedtherein and the holding in respect of which the dividends
are paid is effectively connected with such permanentestablishment. In such case the provisions of Article 7
shall apply.
5.
Where a company which is a resident of a Contracting
State derives profits or income from the other Contracting
State, that other Contracting State may not impose any tax
on the dividends paid by the company, except insofar as
such dividends are paid to a resident of that other
Contracting State or insofar as the holding in respect ofwhich the dividends are paid is effectively connected witha permanent establishment situated in that other
Contracting State, nor subject the company’s undistributed
profits to a tax on the company’s undistributed profits,even if the dividends paid or the undistributed profits
consist wholly or partly of profits or income arising insuch other Contracting State.
Article 11
1.
Interest arising in a Contracting State and paid to aresident of the other Contracting State may be taxed inthat other Contracting State.

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2.
However, such interest may also be taxed in theContracting State in which it arises and according to thelaws of that Contracting State, but if the beneficial ownerof the interest is a resident of the other Contracting
State, the tax so charged shall not exceed 10 per cent of
the gross amount of the interest.
3.
Notwithstanding the provisions of paragraph 2,interest arising in a Contracting State shall be taxable
only in the other Contracting State if:(a)the interest is beneficially owned by theGovernment of that other Contracting State
including a political subdivision and local
authority thereof, or the central bank of that
other Contracting State or any institution wholly
owned by that Government; or(b)

the interest is beneficially owned by a residentof that other Contracting State with respect to
debt-claims guaranteed, insured or indirectly
financed by the Government of that other
Contracting State including a politicalsubdivision and local authority thereof, or thecentral bank of that other Contracting State or
any institution wholly owned by that Government.

4.
For the purposes of paragraph 3, the terms “thecentral bank” and “institution wholly owned by that
Government” mean:(a)in the case of Japan:(i)the Bank of Japan;(ii)

the Japan Bank for International
Cooperation;(iii)

the Japan International Cooperation Agency;(iv)

the Nippon Export and Investment Insurance;
and

(v)

such other similar institution the capitalof which is wholly owned by the Governmentof Japan including a local authority thereofas may be agreed upon from time to time
between the Governments of the Contracting
States through an exchange of diplomatic
notes;- 11 -

(b)in the case of the United Arab Emirates:(i)Central Bank of the United Arab Emirates;(ii)

Abu Dhabi Investment Authority;(iii)

International Petroleum Investment Company;(iv)

Abu Dhabi Investment Council;(v)

Investment Corporation of Dubai; and(vi)such other similar institution the capitalof which is wholly owned by the Governmentof the United Arab Emirates including apolitical subdivision and local authority
thereof as may be agreed upon from time totime between the Governments of theContracting States through an exchange of
diplomatic notes.

5.
The term “interest” as used in this Article means
income from debt-claims of every kind, whether or notsecured by mortgage and whether or not carrying a right toparticipate in the debtor’s profits, and in particular,
income from government securities and income from bonds ordebentures, including premiums and prizes attaching to suchsecurities, bonds or debentures, and all other income thatis subjected to the same taxation treatment as income frommoney lent by the tax laws of the Contracting State inwhich the income arises.
6.
The provisions of paragraphs 1 and 2 shall not apply
if the beneficial owner of the interest, being a residentof a Contracting State, carries on business in the other
Contracting State in which the interest arises through apermanent establishment situated therein and the debt-claim
in respect of which the interest is paid is effectively
connected with such permanent establishment. In such casethe provisions of Article 7 shall apply.
7.
Interest shall be deemed to arise in a Contracting
State when the payer is a resident of that Contracting
State. Where, however, the person paying the interest,
whether he is a resident of a Contracting State or not, hasin a Contracting State a permanent establishment inconnection with which the indebtedness on which theinterest is paid was incurred, and such interest is borneby such permanent establishment, then such interest shallbe deemed to arise in the Contracting State in which thepermanent establishment is situated.

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8.
Where, by reason of a special relationship between thepayer and the beneficial owner or between both of them andsome other person, the amount of the interest, having
regard to the debt-claim for which it is paid, exceeds theamount which would have been agreed upon by the payer andthe beneficial owner in the absence of such relationship,
the provisions of this Article shall apply only to thelast-mentioned amount. In such case, the excess part ofthe payments shall remain taxable according to the laws ofeach Contracting State, due regard being had to the otherprovisions of this Convention.
Article 12
1.
Royalties arising in a Contracting State and paid to aresident of the other Contracting State may be taxed inthat other Contracting State.
2.
However, such royalties may also be taxed in theContracting State in which they arise and according to thelaws of that Contracting State, but if the beneficial ownerof the royalties is a resident of the other Contracting
State, the tax so charged shall not exceed 10 per cent of
the gross amount of the royalties.
3.
The term “royalties” as used in this Article means
payments of any kind received as a consideration for theuse of, or the right to use, any copyright of literary,artistic or scientific work including cinematograph films
and films or tapes for radio or television broadcasting,
any patent, trade mark, design or model, plan, or secretformula or process, or for information concerningindustrial, commercial or scientific experience.
4.
Royalties shall be deemed to arise in a Contracting
State when the payer is a resident of that Contracting
State. Where, however, the person paying the royalties,
whether he is a resident of a Contracting State or not, hasin a Contracting State a permanent establishment inconnection with which the liability to pay the royalties
was incurred, and such royalties are borne by suchpermanent establishment, then such royalties shall bedeemed to arise in the Contracting State in which thepermanent establishment is situated.
5.
The provisions of paragraphs 1, 2 and 4 shall likewise
apply to proceeds arising from the alienation of any
copyright of literary, artistic or scientific work
including cinematograph films and films or tapes for radioor television broadcasting, any patent, trade mark, design
or model, plan, or secret formula or process, except when
the provisions of paragraph 4 of Article 13 are applicableto the gains to be derived from such proceeds.

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6.
The provisions of paragraphs 1, 2 and 5 shall not
apply if the beneficial owner of the royalties or proceeds,
being a resident of a Contracting State, carries on
business in the other Contracting State in which theroyalties or proceeds arise through a permanentestablishment situated therein and the right or property inrespect of which the royalties or proceeds are paid iseffectively connected with such permanent establishment.
In such case the provisions of Article 7 shall apply.
7.
Where, by reason of a special relationship between thepayer and the beneficial owner or between both of them andsome other person, the amount of the royalties or proceeds,
having regard to the use, right or information for which
they are paid, exceeds the amount which would have been
agreed upon by the payer and the beneficial owner in theabsence of such relationship, the provisions of this
Article shall apply only to the last-mentioned amount. In
such case, the excess part of the payments shall remaintaxable according to the laws of each Contracting State,
due regard being had to the other provisions of thisConvention.
Article 13
1.
Gains derived by a resident of a Contracting State
from the alienation of immovable property referred to in
Article 6 and situated in the other Contracting State may
be taxed in that other Contracting State.
2.
Gains derived by a resident of a Contracting State
from the alienation of shares in a company may be taxed in
the other Contracting State where the shares derive atleast 50 per cent of their value directly or indirectlyfrom immovable property referred to in Article 6 andsituated in that other Contracting State unless therelevant class of the shares is traded on a recognised
stock exchange and that resident and persons related orconnected to that resident own in the aggregate 5 per centor less of that class of the shares.
3.
Unless the provisions of paragraph 2 are applicable,
gains derived by a resident of a Contracting State from thealienation of shares issued by a company being a residentof the other Contracting State may be taxed in that other
Contracting State, if:(a)shares owned by the alienator (together with suchshares owned by any other related or connected
persons as may be aggregated therewith) amount toat least 25 per cent of the total issued sharesof such company at any time during the taxable
year in which the alienation takes place; and- 14 -

(b)the total of the shares alienated by thealienator and such related or connected persons
during that taxable year in which the alienation
takes place amounts to at least 5 per cent of thetotal issued shares of such company.

4.
Notwithstanding the provisions of paragraphs 2 and 3,
gains from the alienation of any property, other thanimmovable property, forming part of the business property
of a permanent establishment which an enterprise of aContracting State has in the other Contracting State,including such gains from the alienation of such apermanent establishment (alone or with the wholeenterprise), may be taxed in that other Contracting State.
5.
Gains derived by an enterprise of a Contracting State
from the alienation of ships or aircraft operated by thatenterprise in international traffic or any property, otherthan immovable property, pertaining to the operation ofsuch ships or aircraft shall be taxable only in thatContracting State.
6.
Gains from the alienation of any property other thanthat referred to in paragraph 5 of Article 12 andparagraphs 1 to 5 of this Article shall be taxable only in
the Contracting State of which the alienator is a resident.
Article 14
1.
Subject to the provisions of Articles 15, 17 and 18,
salaries, wages and other similar remuneration derived by aresident of a Contracting State in respect of an employment
shall be taxable only in that Contracting State unless theemployment is exercised in the other Contracting State. If
the employment is so exercised, such remuneration as isderived therefrom may be taxed in that other Contracting
State.
2.
Notwithstanding the provisions of paragraph 1,
remuneration derived by a resident of a Contracting Statein respect of an employment exercised in the other
Contracting State shall be taxable only in the firstmentioned Contracting State if:(a)the recipient is present in that other
Contracting State for a period or periods notexceeding in the aggregate 183 days in any twelve
month period commencing or ending in the taxable
or fiscal year concerned;(b)

the remuneration is paid by, or on behalf of, anemployer who is not a resident of that other
Contracting State; and- 15 -

(c)the remuneration is not borne by a permanentestablishment which the employer has in that
other Contracting State.

3.
Notwithstanding the preceding provisions of this
Article, remuneration derived in respect of an employment
exercised aboard a ship or aircraft operated ininternational traffic by an enterprise of a Contracting
State may be taxed in that Contracting State.
Article 15
Directors’ fees and other similar payments derived bya resident of a Contracting State in his capacity as amember of the board of directors of a company which is a
resident of the other Contracting State may be taxed inthat other Contracting State.
Article 16
1.
Notwithstanding the provisions of Articles 7 and 14,
income derived by a resident of a Contracting State as anentertainer, such as a theatre, motion picture, radio or
television artiste, or a musician, or as a sportsman, fromhis personal activities as such exercised in the other
Contracting State, may be taxed in that other Contracting
State.
2.
Where income in respect of personal activities
exercised by an entertainer or a sportsman in his capacity
as such accrues not to the entertainer or sportsman himself
but to another person, that income may, notwithstanding theprovisions of Articles 7 and 14, be taxed in theContracting State in which the activities of theentertainer or sportsman are exercised.
Article 17
Subject to the provisions of paragraph 2 of Article
18, pensions and other similar remuneration beneficiallyowned by a resident of a Contracting State shall be taxable
only in that Contracting State.
Article 18
1.

(a)Salaries, wages and other similar remuneration
paid by a Contracting State or a politicalsubdivision or local authority thereof to anindividual in respect of services rendered tothat Contracting State or political subdivisionor local authority, in the discharge of functionsof a governmental nature, shall be taxable onlyin that Contracting State.

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(b)2.

However, such salaries, wages and other similar
remuneration shall be taxable only in the other
Contracting State if the services are rendered inthat other Contracting State and the individual
is a resident of that other Contracting State
who:
(i)

is a national of that other Contracting
State; or(ii)

did not become a resident of that other
Contracting State solely for the purpose of
rendering the services.

(a)

Notwithstanding the provisions of paragraph 1,
pensions and other similar remuneration paid by,or out of funds to which contributions are madeor created by, a Contracting State or a politicalsubdivision or local authority thereof to anindividual in respect of services rendered tothat Contracting State or political subdivisionor local authority shall be taxable only in thatContracting State.

(b)

However, such pensions and other similar
remuneration shall be taxable only in the other
Contracting State if the individual is a residentof, and a national of, that other Contracting
State.

3.
The provisions of Articles 14, 15, 16 and 17 shallapply to salaries, wages, pensions, and other similar
remuneration in respect of services rendered in connection
with a business carried on by a Contracting State or apolitical subdivision or local authority thereof.
Article 19
Payments which a business apprentice, being aparticipant in a programme sponsored by the Government of aContracting State, or a student, who is or was immediately
before visiting the other Contracting State a resident of
the first-mentioned Contracting State and who is present in
the other Contracting State solely for the purpose of his
training or education receives for the purpose of his
maintenance, training or education shall not be taxed inthat other Contracting State, provided that such payments
are made to him from sources outside that other Contracting
State. The exemption provided by this Article shall apply
to a business apprentice only for a period not exceeding
two years from the date he first begins his training inthat other Contracting State.

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Article 20
Notwithstanding any other provisions of thisConvention, any income and gains derived by a sleeping
partner in respect of a sleeping partnership (Tokumei
Kumiai) contract or other similar contract may be taxed in
the Contracting State in which such income and gains arise,
and according to the laws of that Contracting State.
Article 21
1.
Items of income beneficially owned by a resident of aContracting State, wherever arising, not dealt with in theforegoing Articles of this Convention (hereinafter referred
to as “other income” in this Article) shall be taxable onlyin that Contracting State.
2.
The provisions of paragraph 1 shall not apply to otherincome, other than income from immovable property as
defined in paragraph 2 of Article 6, if the beneficial
owner of such other income, being a resident of aContracting State, carries on business in the other
Contracting State through a permanent establishment
situated therein and the right or property in respect ofwhich the other income is paid is effectively connectedwith such permanent establishment. In such case theprovisions of Article 7 shall apply.
Article 22
1.

In Japan double taxation shall be avoided as follows:

Subject to the provisions of the laws of Japan
regarding the allowance as a credit against Japanese tax oftax payable in any country other than Japan, where aresident of Japan derives income from the United ArabEmirates which may be taxed in the United Arab Emirates inaccordance with the provisions of this Convention, theamount of U.A.E. tax payable in respect of that income
shall be allowed as a credit against the Japanese tax
imposed on that resident. The amount of credit, however,shall not exceed that part of the Japanese tax which isappropriate to that income.
2.
In the United Arab Emirates, double taxation shall be
avoided as follows:- 18 -

Where a resident of the United Arab Emirates derives
income which, in accordance with the provisions of thisConvention, may be taxed in Japan, the United Arab Emirates
shall allow an amount equal to the Japanese tax paid inJapan as a deduction from the U.A.E. tax on the income ofthat resident. Such deduction in any case shall not,however, exceed that part of the U.A.E. tax, as computed
before the deduction is given, which is attributable to theincome which may be taxed in Japan.
3.
For the purposes of the preceding paragraphs of this
Article, income beneficially owned by a resident of aContracting State which may be taxed in the other
Contracting State in accordance with this Convention shallbe deemed to arise from sources in that other Contracting
State.
Article 23
1.
Nationals of a Contracting State shall not be
subjected in the other Contracting State to any taxation or
any requirement connected therewith, which is other or moreburdensome than the taxation and connected requirements towhich nationals of that other Contracting State in the same
circumstances, in particular with respect to residence, areor may be subjected. The provisions of this paragraphshall, notwithstanding the provisions of Article 1, also
apply to persons who are not residents of one or both of
the Contracting States.
2.
The taxation on a permanent establishment which anenterprise of a Contracting State has in the other
Contracting State shall not be less favourably levied inthat other Contracting State than the taxation levied onenterprises of that other Contracting State or of a stateother than the Contracting States carrying on the sameactivities. The provisions of this paragraph shall not be
construed as obliging a Contracting State to grant toresidents of the other Contracting State any personal
allowances, reliefs and reductions for taxation purposes on
account of civil status or family responsibilities which it
grants to its own residents.
3.
Except where the provisions of paragraph 1 of Article
9, paragraph 8 of Article 11 or paragraph 7 of Article 12
apply, interest, royalties and other disbursements paid bya resident of a Contracting State to a resident of theother Contracting State shall, for the purposes ofdetermining the taxable profits of the first-mentioned
resident, be deductible under the same conditions as if
they had been paid to a resident of the first-mentioned
Contracting State.

- 19 -

4.
Enterprises of a Contracting State, the capital ofwhich is wholly or partly owned or controlled, directly or
indirectly, by one or more residents of the other
Contracting State, shall not be subjected in the firstmentioned Contracting State to any taxation or any
requirement connected therewith which is other or moreburdensome than the taxation and connected requirements towhich other similar enterprises of the first-mentioned
Contracting State are or may be subjected.
5.
The provisions of this Article shall, notwithstanding
the provisions of Article 2, apply to taxes of every kindand description imposed by a Contracting State or apolitical subdivision or local authority thereof.
Article 24
1.
Where a person considers that the actions of one orboth of the Contracting States result or will result for
him in taxation not in accordance with the provisions of
this Convention, he may, irrespective of the remedies
provided by the domestic law of those Contracting States,
present his case to the competent authority of theContracting State of which he is a resident or, if his casecomes under paragraph 1 of Article 23, to that of theContracting State of which he is a national. The case must
be presented within three years from the first notificationof the action resulting in taxation not in accordance withthe provisions of the Convention.
2.
The competent authority shall endeavour, if theobjection appears to it to be justified and if it is notitself able to arrive at a satisfactory solution, toresolve the case by mutual agreement with the competentauthority of the other Contracting State, with a view tothe avoidance of taxation which is not in accordance withthe provisions of this Convention. Any agreement reachedshall be implemented notwithstanding any time limits in thedomestic law of the Contracting States.
3.
The competent authorities of the Contracting Statesshall endeavour to resolve by mutual agreement any
difficulties or doubts arising as to the interpretation orapplication of this Convention. They may also consult
together for the elimination of double taxation in cases
not provided for in the Convention.

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4.
The competent authorities of the Contracting States
may communicate with each other directly for the purpose ofreaching an agreement in the sense of the preceding
paragraphs of this Article.
Article 25
1.
The competent authorities of the Contracting Statesshall exchange such information as is foreseeably relevant
for carrying out the provisions of this Convention or to
the administration or enforcement of the domestic law
concerning taxes of every kind and description imposed onbehalf of the Contracting States, or of their politicalsubdivisions or local authorities, insofar as the taxation
thereunder is not contrary to the Convention. The exchange
of information is not restricted by Articles 1 and 2.
2.
Any information received under paragraph 1 by aContracting State shall be treated as secret in the samemanner as information obtained under the domestic law ofthat Contracting State and shall be disclosed only topersons or authorities (including courts and administrative
bodies) concerned with the assessment or collection of, theenforcement or prosecution in respect of, the determinationof appeals in relation to the taxes referred to inparagraph 1, or the oversight of the above. Such persons
or authorities shall use the information only for such
purposes. They may disclose the information in public
court proceedings or in judicial decisions.
3.
In no case shall the provisions of paragraphs 1 and 2
be construed so as to impose on a Contracting State theobligation:(a)

to carry out administrative measures at variancewith the laws and administrative practice of thator of the other Contracting State;(b)to supply information which is not obtainable
under the laws or in the normal course of theadministration of that or of the other
Contracting State;(c)to supply information which would disclose any
trade, business, industrial, commercial or
professional secret or trade process, orinformation, the disclosure of which would becontrary to public policy.

- 21 -

4.
If information is requested by a Contracting State inaccordance with this Article, the other Contracting State
shall use its information gathering measures to obtain therequested information, even though that other Contracting
State may not need such information for its own tax
purposes. The obligation contained in the preceding
sentence is subject to the limitations of paragraph 3 but
in no case shall such limitations be construed to permit aContracting State to decline to supply information solely
because it has no domestic interest in such information.
5.
In no case shall the provisions of paragraph 3 beconstrued to permit a Contracting State to decline tosupply information solely because the information is heldby a bank, other financial institution, nominee or person
acting in an agency or a fiduciary capacity or because it
relates to ownership interests in a person.
Article 26
Nothing in this Convention shall affect the fiscal
privileges of members of diplomatic missions or consular
posts under the general rules of international law or under
the provisions of special agreements.
Article 27
1.
This Convention shall be approved in accordance withthe legal procedures of each of the Contracting States andshall enter into force on the thirtieth day after the dateof exchange of diplomatic notes indicating such approval.
2.

This Convention shall be applicable:(a)in the case of Japan:(i)with respect to taxes withheld at source,
for amounts taxable on or after 1 January inthe calendar year next following that inwhich the Convention enters into force;(ii)

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 followingthat in which the Convention enters into
force; and(iii)

with respect to other taxes, as regards
taxes for any taxable year beginning on orafter 1 January in the calendar year next
following that in which the Convention
enters into force; and- 22 -

(b)in the case of the United Arab Emirates:(i)with respect to taxes withheld at source,
for amounts taxable on or after 1 January inthe calendar year next following that inwhich the Convention enters into force;(ii)

with respect to taxes on income which are
not withheld at source, as regards income
for any fiscal year beginning on or after 1
January in the calendar year next followingthat in which the Convention enters into
force; and(iii)

with respect to other taxes, as regards
taxes for any fiscal year beginning on orafter 1 January in the calendar year next
following that in which the Convention
enters into force.
Article 28

This Convention shall remain in force until terminatedby a Contracting State. Either Contracting State may
terminate the Convention, through diplomatic channels, bygiving written notice of termination at least six months
before the end of any calendar year beginning after the
expiration of a period of five years from the date of its
entry into force. In such event, the Convention shallcease to have effect:(a)in the case of Japan:(i)with respect to taxes withheld at source,
for amounts taxable on or after 1 January inthe calendar year next following the
expiration of the six month period;(ii)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
the expiration of the six month period; and(iii)

with respect to other taxes, as regards
taxes for any taxable year beginning on orafter 1 January in the calendar year next
following the expiration of the six month
period; and- 23 -

(b)in the case of the United Arab Emirates:(i)with respect to taxes withheld at source,
for amounts taxable on or after 1 January inthe calendar year next following the
expiration of the six month period;(ii)with respect to taxes on income which are
not withheld at source, as regards income
for any fiscal year beginning on or after 1
January in the calendar year next following
the expiration of the six month period; and(iii)

with respect to other taxes, as regards
taxes for any fiscal year beginning on orafter 1 January in the calendar year next
following the expiration of the six month
period.

IN WITNESS WHEREOF the undersigned, being duly
authorised thereto by their respective Governments, havesigned this Convention.
DONE in duplicate at Dubai this second day of May,
2013, in the Japanese, Arabic and English languages, all
the three texts being equally authentic. In case of any
divergence of interpretations, the English text shallprevail.

For Japan:

For the United Arab Emirates:‫اﻟﻄﺎﻳﺮ‬加茂佳彦- 24 -

Protocol

At the signing of the Convention between Japan and theUnited Arab Emirates for the Avoidance of Double Taxationand the Prevention of Fiscal Evasion with respect to Taxes
on Income (hereinafter referred to as “the Convention”),
Japan and the United Arab Emirates have agreed upon thefollowing provisions, which shall form an integral part of
the Convention.
1.
With reference to subparagraph (b) of paragraph 1 of
Article 2 of the Convention, it is understood that:(a)the term “the income tax” includes any tax onincome, profits or gains of individuals under thedomestic law established by the United ArabEmirates or by any political subdivision or local
authority thereof; and(b)the term “the corporation tax” includes any tax
on income, profits or gains of companies under
the domestic law established by the United ArabEmirates or by any political subdivision or local
authority thereof.

2.
With respect to paragraph 1 of Article 4 of theConvention, it is understood that the term “resident of aContracting State” includes a pension fund establishedunder the laws of that Contracting State, and anorganisation established under the laws of that Contracting
State and operated exclusively for a religious, charitable,
educational, scientific, artistic, cultural or public
purpose (or for more than one of those purposes), only if
all or part of its income or gains may be exempt from tax
under the domestic law of that Contracting State. It isfurther understood that, in the case of the United ArabEmirates, the term “resident of a Contracting State”
includes, but is not limited to:(a)Central Bank of the United Arab Emirates;(b)

Abu Dhabi Investment Authority;(c)International Petroleum Investment Company;(d)Abu Dhabi Investment Council;- 25 -

(e)Investment Corporation of Dubai; and(f)Mubadala Development Company.

3.
With reference to Articles 8 and 11 of the Convention,
it is understood that interest on funds temporarily
deposited in connection with the operation of ships oraircraft in international traffic shall be regarded asincome from the operation of such ships or aircraft andthat the provisions of Article 11 of the Convention shallnot apply in relation to such interest.
4.
With reference to paragraph 2 of Article 10 of theConvention, the provisions of subparagraph (a) of thatparagraph shall not apply in the case of dividends paid by
a company which is entitled to a deduction for dividends
paid to its beneficiaries in computing its taxable income
in Japan.
5.
With reference to paragraph 2 of Article 13 of theConvention, it is understood that the term “recognised
stock exchange” means:(a)any stock exchange established by a Financial
Instruments Exchange or an approved-typefinancial instruments firms association under theterms of the Financial Instruments and Exchange
Law (Law No. 25 of 1948) of Japan;(b)

Dubai Financial Market;(c)

Abu Dhabi Securities Exchange; and(d)any other stock exchange which the competentauthorities of the Contracting States agree torecognise for the purposes of that Article.

6.
With reference to Article 13 of the Convention, it isunderstood that gains from the alienation of shares in acompany or of interests in a partnership or trust, otherthan shares which are referred to in paragraphs 2 and 3 ofthat Article or shares or interests which are properties
forming part of a permanent establishment described inparagraph 4 of that Article, shall be taxable only in theContracting State of which the alienator is a resident.

- 26
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7.
With reference to paragraphs 2 and 3 of Article 13 of
the Convention, it is understood that an institution wholly
owned by the Government of one of the Emirates of theUnited Arab Emirates is not related or connected within themeaning of those paragraphs to an institution wholly ownedby the Government of another Emirate of the United ArabEmirates.
8.
With reference to Article 23 of the Convention, theprovisions of that Article shall not be construed as
obliging a Contracting State to grant to a resident of theother Contracting State the benefit of preference,
privilege or any other treatment which shall be accorded toa resident of a state other than the Contracting States byvirtue of the formation of a customs union or a free tradearea or by virtue of any regional arrangement relating
wholly or partly to taxation, to which the first-mentioned
Contracting State is a Party.
9.
With reference to paragraph 5 of Article 25 of theConvention, a Contracting State may decline to supply
information relating to confidential communications between
attorneys, solicitors or other admitted legal
representatives in their role as such and their clients tothe extent that the communications are protected fromdisclosure under the domestic law of that Contracting
State.
10. It is understood that the provisions of the Convention
shall not be construed to restrict in any manner any
exclusion, exemption, reduction, deduction, credit, orother allowance now or hereafter accorded:(a)by the laws of a Contracting State in thedetermination of tax imposed by that Contracting
State; or(b)

by any other bilateral agreement between theContracting States or any multilateral agreement
to which the Contracting States are Parties.

11. No relief shall be available under the Convention if
it was the main purpose or one of the main purposes of any
person concerned with the creation or assignment of any
right or property in respect of which the income is paid orderived to take advantage of the Convention by means ofthat creation or assignment.

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12. Nothing in the Convention shall affect the right ofeither one of the Contracting States or politicalsubdivisions or local authorities thereof to apply theirdomestic laws and regulations related to the taxation ofincome and profits from the exploration and exploitation ofhydrocarbons in the territory of the respective Contracting
States, as the case may be.
IN WITNESS WHEREOF the undersigned, being duly
authorised thereto by their respective Governments, havesigned this Protocol.
DONE in duplicate at Dubai this second day of May,
2013, in the Japanese, Arabic and English languages, all
the three texts being equally authentic. In case of any
divergence of interpretations, the English text shallprevail.

For Japan:

For the United Arab Emirates:   ຍⱱెᙪ             ήϳΎτϟ΍

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