AGREEMENT BETWEENTHE GOVERNMENT OF JAPANAND
THE GOVERNMENT OF THE SULTANATE OF OMANFOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME

AGREEMENT BETWEENTHE GOVERNMENT OF JAPANAND
THE GOVERNMENT OF THE SULTANATE OF OMANFOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME

The Government of Japan and the Government of the
Sultanate of Oman,
Desiring to conclude an Agreement for the avoidance of
double taxation and the prevention of fiscal evasion withrespect to taxes on income,Have agreed as follows:
Article 1
Persons Covered
This Agreement shall apply to persons who areresidents of one or both of the Contracting States.
Article 2
Taxes Covered
1.

This Agreement 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”); and(b)in the case of the Sultanate of Oman:
the income tax(hereinafter referred to as “Omani tax”).

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2.
This Agreement shall apply also to any identical or
substantially similar taxes that are imposed after the dateof signature of the Agreement 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 3
General Definitions
1.
For the purposes of this Agreement, unless the context
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 “Sultanate of Oman” means the territoryof the Sultanate of Oman and the islands
belonging thereto, including the territorial
waters and any area outside the territorial
waters over which the Sultanate of Oman may, in
accordance with international law and the laws of
the Sultanate of Oman, exercise sovereign rights
with respect to the exploration and exploitationof the natural resources of the seabed and thesubsoil and the superjacent waters;(c)the terms “a Contracting State” and “the other
Contracting State” mean Japan or the Sultanate ofOman, as the context requires;(d)the term “tax” means Japanese tax or Omani 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 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;(h)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;(i)the term “national” means:

(j)

(i)

in the case of Japan, any individual
possessing the nationality of Japan, 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 Sultanate of Oman, any
individual possessing the nationality of the
Sultanate of Oman and any legal person,
partnership or association deriving its
status as such from the laws in force in the
Sultanate of Oman; andthe term “competent authority” means:(i)in the case of Japan, the Minister ofFinance or his authorised representative;
and

(ii)

in the case of the Sultanate of Oman, theMinistry of Finance or its authorised
representative.

2.
As regards the application of this Agreement 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 Agreement applies, any meaning under the applicable tax
laws of that Contracting State prevailing over a meaning
given to the term under other laws of that Contracting
State.

- 3 -Article 4
Resident
1.
For the purposes of this Agreement, the term “residentof a Contracting State” means any person who, under thelaws of that Contracting State, is liable to tax therein byreason of his domicile, residence, place of incorporation,
place of head or main office or any other criterion of asimilar nature, and also includes that Contracting Stateand any political subdivision or local authority thereof.
This term, however, does not include any person who isliable 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 his status cannot be determined in accordancewith the provisions of subparagraphs (a) to (c),the competent authorities of the Contracting
States shall settle the question by mutual
agreement.

3.
Where by reason of the provisions of paragraph 1 aperson other than an individual is a resident of bothContracting States, then it shall be deemed to be aresident only of the Contracting State in which its placeof head or main office is situated.

- 4 -Article 5
Permanent Establishment
1.
For the purposes of this Agreement, 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.
The term “permanent establishment” also encompasses abuilding site, a construction, assembly or installation
project or supervisory activities in connection therewith,
but only if such site, project or activities last more thannine 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;(d)the maintenance of a fixed place of businesssolely for the purpose of purchasing goods ormerchandise or of collecting information, for theenterprise;

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(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
Income from Immovable Property
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 andto income from immovable property used for the performanceof independent personal services.
Article 7
Business Profits
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.
No profits shall be attributed to a permanentestablishment by reason of the mere purchase by thatpermanent establishment of goods or merchandise for theenterprise.
5.
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.
6.
Where profits include items of income which are dealt
with separately in other Articles of this Agreement, thenthe provisions of those Articles shall not be affected by
the provisions of this Article.
Article 8
Shipping and Air Transport
1.
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 Sultanate of Oman,
shall be exempt from the enterprise tax of Japan, and, if
an enterprise of Japan, shall be exempt from any tax
similar to the enterprise tax of Japan which may hereafter
be imposed in the Sultanate of Oman.
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.
Article 9
Associated Enterprises
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,- 8 -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 Agreement.
3.
Notwithstanding the provisions of paragraph 1, aContracting State shall not change the profits of anenterprise of that Contracting State in the circumstancesreferred to in that paragraph after ten years from the endof the taxable year in which the profits that would be
subjected to such change would, but for the conditions
referred to in that paragraph, have accrued to thatenterprise. The provisions of this paragraph shall not
apply in the case of fraud or wilful default.
Article 10
Dividends
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)

five per cent (5%) of the gross amount of thedividends if the beneficial owner is a company
that has owned directly or indirectly, for theperiod of six months ending on the date on which
entitlement to the dividends is determined, atleast ten per cent (10%) of the voting shares of
the company paying the dividends; or(b)ten per cent (10%) of the gross amount of thedividends 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 provisions of subparagraph (a) of paragraph 2
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.
4.
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.
5.
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, or performs in that other Contracting State
independent personal services from a fixed base situatedtherein, and the holding in respect of which the dividends
are paid is effectively connected with such permanentestablishment or fixed base. In such case the provisionsof Article 7 or 14, as the case may be, shall apply.
6.
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 or a fixed base 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 theundistributed profits consist wholly or partly of profits
or income arising in such other Contracting State.

- 10 -

Article 11
Interest
1.
Interest arising in a Contracting State and paid to aresident of the other Contracting State may be taxed inthat other Contracting State.
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 ten per cent(10%) 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, apolitical subdivision or 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, a political subdivision or
local authority thereof, or the central bank ofthat 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- 11 -

(v)(b)

such other similar institution the capitalof which is wholly owned by the Governmentof Japan as may be agreed upon from time totime between the Governments of theContracting States through an exchange of
diplomatic notes; andin the case of the Sultanate of Oman:(i)the Central Bank of Oman;(ii)

the State General Reserve Fund;(iii)

the Omani Investment Fund;(iv)

any retirement or pension fund organised
under Omani laws; and(v)such other similar statutory body or
institution wholly owned by the Governmentof the Sultanate of Oman as may be agreed
upon from time to time between the
Governments of the Contracting 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. Income dealt with in Article 10
shall not be regarded as interest for the purposes of thisAgreement.
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, or performs inthat other Contracting State independent personal services
from a fixed base situated therein, and the debt-claim in
respect of which the interest is paid is effectively
connected with such permanent establishment or fixed base.
In such case the provisions of Article 7 or 14, as the casemay be, shall apply.

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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 or a fixedbase in connection with which the indebtedness on which theinterest is paid was incurred, and such interest is borneby such permanent establishment or fixed base, then suchinterest shall be deemed to arise in the Contracting Statein which the permanent establishment or fixed base issituated.
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 Agreement.
Article 12
Royalties
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 ten per cent(10%) 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 the use of, or the right to use,
industrial, commercial or scientific equipment, or for
information concerning industrial, commercial or scientificexperience.

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4.
The provisions of paragraphs 1 and 2 shall not apply
if the beneficial owner of the royalties, being a residentof a Contracting State, carries on business in the other
Contracting State in which the royalties arise through apermanent establishment situated therein, or performs inthat other Contracting State independent personal services
from a fixed base situated therein, and the right orproperty in respect of which the royalties are paid iseffectively connected with such permanent establishment or
fixed base. In such case the provisions of Article 7 or
14, as the case may be, shall apply.
5.
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 or a fixedbase in connection with which the liability to pay theroyalties was incurred, and such royalties are borne bysuch permanent establishment or fixed base, then suchroyalties shall be deemed to arise in the Contracting Statein which the permanent establishment or fixed baseis situated.
6.
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, having
regard to the use, right or information for which they arepaid, exceeds the amount which would have been agreed uponby the payer and the beneficial owner in the absence ofsuch relationship, the provisions of this Article shallapply only to the last-mentioned amount. In such case, theexcess part of the payments shall remain taxable according
to the laws of each Contracting State, due regard being had
to the other provisions of this Agreement.
Article 13
Capital Gains
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.

- 14 -

2.
Gains derived by a resident of a Contracting State
from the alienation of shares or interests in a company,
partnership or trust deriving at least fifty per cent (50%)
of the value of its property directly or indirectly from
immovable property referred to in Article 6 and situated in
the other Contracting State may be taxed in that other
Contracting State, unless the relevant class of the sharesor the interests is traded on a recognised stock exchange
and the resident and persons related or connected to that
resident own in the aggregate five per cent (5%) or less ofthat class of the shares or the interests.
3.

Where
(a)

a Contracting State (including, for this purposein the case of Japan, the Deposit Insurance
Corporation of Japan) provides, pursuant to thelaws or royal decisions of that Contracting State
concerning failure resolution involving imminent
insolvency of financial institutions, substantial
financial assistance to a financial institutionthat is a resident of that Contracting State, and(b)a resident of the other Contracting Stateacquires shares in the financial institution fromthe first-mentioned Contracting State,

the first-mentioned Contracting State may tax gains derived
by the resident of the other Contracting State from thealienation of such shares, provided that the alienation ismade within five years from the first date on which suchfinancial assistance was provided.
4.
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 or ofany property, other than immovable property, pertaining toa fixed base available to a resident of a Contracting Statein the other Contracting State for the purpose of
performing independent personal services, including suchgains from the alienation of such a permanent establishment(alone or with the whole enterprise) or of such a fixedbase, 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.

- 15 -

6.
Gains from the alienation of any property other thanthat referred to in the preceding paragraphs of this
Article shall be taxable only in the Contracting State ofwhich the alienator is a resident.
Article 14
Independent Personal Services
1.
Income derived by a resident of a Contracting State inrespect of professional services or other activities of an
independent character shall be taxable only in thatContracting State unless he has a fixed base regularly
available to him in the other Contracting State for the
purpose of performing his activities. If he has such afixed base, the income may be taxed in that other
Contracting State but only so much of it as is attributable
to that fixed base.
2.
The term “professional services” includes especiallyindependent scientific, literary, artistic, educational orteaching activities as well as the independent activitiesof physicians, lawyers, engineers, architects, dentists andaccountants.
Article 15
Income from Employment
1.
Subject to the provisions of Articles 16, 18 and 19,
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
year concerned;(b)

the remuneration is paid by, or on behalf of, anemployer who is not a resident of that other
Contracting State; and- 16 -

(c)the remuneration is not borne by a permanentestablishment or a fixed base 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 16
Directors’ Fees
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 17
Artistes and Sportspersons
1.
Notwithstanding the provisions of Articles 14 and 15,
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 sportsperson,from his 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 sportsperson in his
capacity as such accrues not to the entertainer or
sportsperson himself but to another person, that income
may, notwithstanding the provisions of Articles 7, 14 and15, be taxed in the Contracting State in which theactivities of the entertainer or sportsperson are
exercised.
Article 18
Pensions
Subject to the provisions of paragraph 2 of Article
19, pensions and other similar remuneration beneficiallyowned by a resident of a Contracting State shall be taxable
only in that Contracting State.

- 17 -

Article 19
Government Service
1.

2.

(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 shall be taxable only in thatContracting State.

(b)

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 15, 16, 17 and 18 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.

- 18 -

Article 20
Students and Business Apprentices
Payments which a student or business apprentice who isor was immediately before visiting a Contracting State aresident of the other Contracting State and who is present
in the first-mentioned Contracting State solely for the
purpose of his education or training receives for the
purpose of his maintenance, education or training shall not
be taxed in the first-mentioned Contracting State, provided
that such payments arise from sources outside the firstmentioned Contracting State.
Article 21
Other Income
1.
Items of income beneficially owned by a resident of aContracting State, wherever arising, not dealt with in theforegoing Articles of this Agreement (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, or performs in that other Contracting
State independent personal services from a fixed basesituated therein, and the right or property in respect ofwhich the other income is paid is effectively connectedwith such permanent establishment or fixed base. In suchcase the provisions of Article 7 or 14, as the case may be,shall apply.
3.
Where, by reason of a special relationship between theresident referred to in paragraph 1 and the payer or
between both of them and some other person, the amount ofother income exceeds the amount which would have been
agreed upon between them in the absence of such
relationship, the provisions of this Article shall apply
only to the last-mentioned amount. In such case, theexcess part of the payments shall remain taxable according
to the laws of each Contracting State, due regard being had
to the other provisions of this Agreement.

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Article 22
Elimination of Double Taxation
1.
In the case of Japan, double taxation shall beeliminated 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 Sultanate of Oman
which may be taxed in the Sultanate of Oman in accordancewith the provisions of this Agreement, the amount of the
Omani tax payable in respect of that income shall beallowed as a credit against the Japanese tax imposed onthat resident. The amount of credit, however, shall not
exceed that part of the Japanese tax which is appropriate
to that income.
2.
In the case of the Sultanate of Oman, double taxation
shall be eliminated as follows:(a)Where a resident of the Sultanate of Oman derives
income which, in accordance with the provisionsof this Agreement, may be taxed in Japan, theSultanate of Oman shall allow as a deduction fromthe Omani tax on the income of that resident anamount equal to the Japanese tax paid in Japan
whether directly or by withholding at source.
Such deduction shall not, however, exceed thatpart of the Omani tax (as computed before thededuction is given) which is attributable to theincome which may be taxed in Japan.

(b)

Where, in accordance with any provisions of thisAgreement, income derived by a resident of the
Sultanate of Oman is exempt from tax in the
Sultanate of Oman, the Sultanate of Oman may
nevertheless, in calculating the amount of tax on
the remaining income of such resident, take into
account the exempted income.

- 20 -

Article 23
Non-Discrimination
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 carrying on thesame activities. The provisions of this paragraph shallnot be construed as obliging a Contracting State to grant
to residents 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, paragraph 6 of Article 12 orparagraph 3 of Article 21 apply, interest, royalties andother disbursements paid by an enterprise of a Contracting
State to a resident of the other Contracting State shall,for the purposes of determining the taxable profits of suchenterprise, be deductible under the same conditions as if
they had been paid to a resident of the first-mentioned
Contracting State.
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 apply to taxes
which are the subject of this Agreement.

- 21 -

Article 24
Mutual Agreement Procedure
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 Agreement, 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 Agreement.
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 Agreement. 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 Agreement. They may also consult
together for the elimination of double taxation in cases
not provided for in the Agreement.
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
Exchange of Information
1.
The competent authorities of the Contracting Statesshall exchange such information as is foreseeably relevant
for carrying out the provisions of this Agreement or to theadministration or enforcement of the domestic laws
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 Agreement. The exchange
of information is not restricted by Articles 1 and 2.

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2.
Any information received under paragraph 1 by aContracting State shall be treated as secret in the samemanner as information obtained under the domestic laws 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.

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.

- 23 -

Article 26
Members of Diplomatic Missions
and Consular Posts
Nothing in this Agreement 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
Headings
The headings of the Articles of this Agreement are
inserted for convenience of reference only and shall notaffect the interpretation of the Agreement.
Article 28
Entry into Force
1.
Each of the Contracting States shall send throughdiplomatic channels to the other the written notification
confirming that its internal procedures necessary for theentry into force of this Agreement have been completed.
This Agreement shall enter into force on the first day of
the next month following the date of receipt of the latter
notification.
2.

This Agreement 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 Agreement 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 Agreement 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 Agreement enters
into force; and- 24 -

(b)in the case of the Sultanate of Oman:(i)in respect of taxes withheld at source, foramounts paid or credited on or after 1 ofJanuary in the calendar year next following
the date on which this Agreement enters into
force; and(ii)

in respect of other taxes, for any tax year
commencing on or after 1 of January in thecalendar year next following the date on
which this Agreement enters into force.
Article 29
Termination

This Agreement shall remain in force until terminatedby a Contracting State. Either Contracting State may
terminate this Agreement, through diplomatic channels, bygiving written notice of termination at least six months
before the end of any calendar year beginning after the
expiry of five years from the date of entry into force of
this Agreement. In such event, this Agreement shall ceaseto have effect:
(a)

(b)

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; andin the case of the Sultanate of Oman:(i)in respect of taxes withheld at source, foramounts paid or credited on or after 1 ofJanuary in the calendar year immediately
following that in which the notice of suchtermination is given; and- 25 -

(ii)in respect of other taxes, for any tax year
commencing on or after 1 of January in thecalendar year immediately following that inwhich the notice of such termination is
given.

IN WITNESS WHEREOF the undersigned, duly authorised
thereto by their respective Governments, have signed thisAgreement.
DONE in duplicate at Muscat this ninth day of January,
2014, in the Japanese, Arabic and English languages, allthree texts being equally authentic. In case of divergenceof interpretation, the English text shall prevail.

For the Governmentof Japan:

For the Governmentof the Sultanate of Oman:‫دروﻳﺶ ﺑﻦ إﺳﻤﺎﻋﻴﻞ ﺑﻦ ﻋﻠﻲ اﻟﺒﻠﻮﺷﻲ‬George Hisaeda- 26 -

Protocol

At the signing of the Agreement between the Governmentof Japan and the Government of the Sultanate of Oman for
the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with respect to Taxes on Income (hereinafterreferred to as “the Agreement”), the Government of Japanand the Government of the Sultanate of Oman have agreed
upon the following provisions, which shall form an integral
part of the Agreement.
1.
With reference to paragraph 1 of Article 2 of theAgreement:
The term “Omani tax” shall not include any amountwhich is payable in respect of any default or omission in
relation to the taxes to which the Agreement applies or
which represents a penalty imposed relating to the taxes towhich the Agreement applies.
2.

For the purposes of the Agreement:

It is understood that the term “resident of aContracting State” includes any “statutory body”. The term
“statutory body” means a body constituted under the royal
decree of the Sultanate of Oman and wholly owned by theGovernment of the Sultanate of Oman.
3.
With reference to paragraph 2 of Article 6 of theAgreement:
It is understood that the term “agriculture” shall
include the breeding and cultivation of fish.
4.
With reference to paragraph 3 of Article 7 of theAgreement:
It is understood that the provisions of that paragraph
do not prevent the Contracting State in which the permanentestablishment is situated from applying the provisions oflaws and regulations of that Contracting State relating todeductions when determining the taxable income of thepermanent establishment for the tax purposes of thatContracting State.

- 27 -

5.
With reference to Article 8 of the Agreement, it isunderstood that:(a)interest on funds temporarily deposited in banks
in connection with the operation of ships oraircraft in international traffic shall be
regarded as profits from the operation of ships
or aircraft referred to in Article 8 and not asinterest referred to in Article 11 of theAgreement; and(b)profits from the operation of ships or aircraft
in international traffic shall include profits
from:
(i)

the rental of ships or aircraft on a fullbasis in international traffic;(ii)

the rental of ships or aircraft on a bareboat basis, where such rental is incidental
to the operation of ships or aircraft ininternational traffic;(iii)

the use, maintenance or rental of containers(including trailers and related equipmentused for transport of containers), wheresuch use, maintenance or rental, as the casemay be, is incidental to the operation ofships or aircraft in international traffic;
and

(iv)

the sale of tickets for internationaltraffic on behalf of other enterprises,
where such sale is incidental to theoperation of ships or aircraft ininternational traffic.

6.
With reference to Articles 10, 11, 12, 13 and 21 of
the Agreement:
It is understood that no relief shall be available
under the provisions of these Articles if the main purposeor one of the main purposes of any person concerned withthe creation or assignment of any shares, debt-claims orother rights or properties in respect of which income
arises was to take advantage of these Articles by means ofthat creation or assignment.

- 28 -

7.

With reference to Article 11 of the Agreement:

Notwithstanding the provisions of paragraph 2 of that
Article, interest arising in the Sultanate of Oman andbeneficially owned by a pension fund established under thelaws of Japan shall be taxable only in Japan.
8.
With reference to paragraph 2 of Article 13 of theAgreement:
It is understood that the term “recognised stock
exchange” means:

9.

(a)

any stock exchange established by a Financial
Instruments Exchange or an approved-typefinancial instruments firms association under
the Financial Instruments and Exchange Law (Law
No. 25 of 1948) of Japan;(b)

the Muscat Securities Market of the Sultanate of
Oman; and(c)any other stock exchange which the competentauthorities of the Contracting States agree torecognise for the purposes of that paragraph.

With reference to Article 16 of the Agreement:

It is understood that the term “a member of the boardof directors of a company” includes a member of the
managerial board or any other similar body of a company
which is a resident of the Sultanate of Oman as provided
for in the relevant Omani laws.
10. Nothing in the Agreement shall prevent Japan from
imposing tax at source, in accordance with its laws, on any
income and gains derived by a person pursuant to a silent
partnership (Tokumei Kumiai) contract or other similar
contract.
11. With reference to paragraph 5 of Article 25 of theAgreement:
A Contracting State may decline to supply information
relating to confidential communications between attorneys,
solicitors or other admitted legal representatives in theirrole as such and their clients to the extent that thecommunications are protected from disclosure under thedomestic law of that Contracting State.

- 29 -

IN WITNESS WHEREOF the undersigned, duly authorised
thereto by their respective Governments, have signed thisProtocol.
DONE in duplicate at Muscat this ninth day of January,
2014, in the Japanese, Arabic and English languages, allthree texts being equally authentic. In case of divergenceof interpretation, the English text shall prevail.

For the Governmentof Japan:

For the Governmentof the Sultanate of Oman:ϲηϮϠΒϟ΍ ϲϠϋ ϦΑ ϞϴϋΎϤγ· ϦΑ ζϳϭέΩ

George Hisaeda- 30 -