AGREEMENT BETWEEN THE GOVERNMENT OF JAPAN AND
THE GOVERNMENT OF THE CAYMAN ISLANDS FOR THE EXCHANGE
OF INFORMATION FOR THE PURPOSE OF THE PREVENTION
OF FISCAL EVASION AND THE ALLOCATION OF RIGHTSOF TAXATION WITH RESPECT TO INCOME OF INDIVIDUALSThe Government of Japan and the Government of the
Cayman Islands, the Government of the Cayman Islands having
been duly authorised by the Government of the United
Kingdom of Great Britain and Northern Ireland,
Desiring to conclude an Agreement for the exchange of
information for the purpose of the prevention of fiscal
evasion and the allocation of rights of taxation withrespect to income of individuals,
Have agreed as follows:
Chapter 1
GENERAL PROVISIONS
Article 1
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 “the Cayman Islands”, when used in ageographical sense, means the Islands of Grand
Cayman, Cayman Brac and Little Cayman, and all
the area around them, over which the Cayman
Islands may exercise its jurisdiction inaccordance with its laws and regulations andinternational law;(c)the term “Contracting Party” means Japan or the
Cayman Islands as the context requires;

1

(d)

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 Cayman Islands, the Tax
Information Authority or an individual or
authority designated by it;(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;(g)the term “national” means:(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 Cayman Islands, any
individual who possesses Caymanian status or
who is a British Overseas Territory Citizen
by virtue of a connection with the Cayman
Islands and any company, partnership, trust,estate, association or any other entity
deriving its status as such from the laws inforce in the Cayman Islands;(h)the term “publicly traded company” means any
company whose principal class of shares is listed
on a recognised stock exchange provided its
listed shares can be readily purchased or sold by
the public. Shares can be readily purchased orsold “by the public” if the purchase or sale ofshares is not implicitly or explicitly restricted
to a limited group of investors;(i)the term “principal class of shares” means theclass or classes of shares representing amajority of the voting power and value of acompany;2(j)the term “recognised stock exchange” means:(i)any stock exchange established by a
Financial Instruments Exchange or an
approved-type financial instruments firms
association under the Financial Instruments
and Exchange Law (Law No. 25 of 1948) ofJapan;(ii)

the Cayman Islands Stock Exchange; and(iii)

any other stock exchange agreed upon by thecompetent authorities of the Contracting
Parties;(k)

the term “collective investment fund or scheme”
means any pooled investment vehicle, irrespectiveof legal form. The term “public collective
investment fund or scheme” means any collective
investment fund or scheme provided the units,
shares or other interests in the fund or scheme
can be readily purchased, sold or redeemed by the
public. Units, shares or other interests in thefund or scheme can be readily purchased, sold orredeemed “by the public” if the purchase, sale orredemption is not implicitly or explicitly
restricted to a limited group of investors;(l)the term “Applicant Party” means the Contracting
Party requesting information;(m)the term “Requested Party” means the Contracting
Party requested to provide information;(n)the term “information gathering measures” means
laws and administrative or judicial proceduresthat enable a Contracting Party to obtain andprovide the information requested; and(o)the term “information” means any fact, statement
or record in any form whatever.

2.
As regards the application of this Agreement at any
time by a Contracting Party, any term not defined thereinshall, unless the context otherwise requires, have themeaning that it has at that time under the laws of thatContracting Party, any meaning under the applicable tax
laws of that Contracting Party prevailing over a meaning
given to the term under other laws of that Contracting
Party.

3

Chapter 2
EXCHANGE OF INFORMATION
Article 2
OBJECT AND SCOPE
The competent authorities of the Contracting Parties
shall provide assistance through exchange of informationthat is foreseeably relevant for the carrying out of thisAgreement or to the administration and enforcement of thelaws of the Contracting Parties concerning taxes referred
to in Article 4. Such information shall include
information that is foreseeably relevant to thedetermination, assessment and collection of such taxes, therecovery and enforcement of tax claims, or theinvestigation or prosecution of tax matters. Information
shall be exchanged in accordance with the Agreement andshall be treated as confidential in the manner provided in
Article 8. Where the Requested Party obtains and provides
information under the Agreement, the procedural rights andsafeguards secured to persons by the laws or administrative
practices of the Requested Party remain applicable, to theextent that they do not unduly prevent or delay effective
exchange of information.
Article 3
JURISDICTION
The Requested Party is not obligated to provide
information which is neither held by its authorities nor in
the possession or control of persons who are within its
territorial jurisdiction.
Article 4
TAXES COVERED1.
This Chapter shall apply to the existing taxes ofevery kind and description imposed on behalf of aContracting Party.
2.
This Chapter shall apply also to any identical or
substantially similar taxes that are imposed after the dateof signature of this Agreement in addition to, or in placeof, the existing taxes referred to in paragraph 1. The
competent authorities of the Contracting Parties shallnotify each other of any significant changes that have been
made in their respective tax laws.

4Article 5
EXCHANGE OF INFORMATION UPON REQUEST
1.
The competent authority of the Requested Party shallprovide upon request information for the purposes referred
to in Article 2. Such information shall be provided
without regard to whether the conduct under examination
would constitute a crime under the laws of the Requested
Party if such conduct occurred in the Requested Party.
2.
If the information in the possession of the competentauthority of the Requested Party is not sufficient toenable it to comply with the request for information, theRequested Party shall use all relevant information
gathering measures to provide the Applicant Party with theinformation requested, notwithstanding that the Requested
Party may not need such information for its own tax
purposes.
3.
If specifically requested by the competent authorityof the Applicant Party, the competent authority of theRequested Party shall provide information under this
Article, to the extent allowable under its laws, in theform of authenticated copies of original records.
4.
Each Contracting Party shall ensure that its competentauthority for the purposes specified in Article 2, has theauthority to obtain and provide upon request:(a)information held by banks, other financial
institutions, and any person acting in an agency
or fiduciary capacity including nominees andtrustees; and(b)information regarding the ownership of companies,
partnerships, trusts, foundations and otherpersons, including, within the constraints ofArticle 3, ownership information on all such
persons in an ownership chain; in the case oftrusts, information on settlors, trustees andbeneficiaries; and in the case of foundations,information on founders, members of thefoundation council and beneficiaries. This
Agreement does not create an obligation on theContracting Parties to obtain or provide
ownership information with respect to publicly
traded companies or public collective investment
funds or schemes unless such information can beobtained without giving rise to disproportionate
difficulties.

55.
The competent authority of the Applicant Party shallprovide the following information to the competentauthority of the Requested Party when making a request for
information under this Agreement to demonstrate theforeseeable relevance of the information sought to therequest:(a)

the identity of the person under examination;(b)a statement of the information requested
including its nature and the form in which theApplicant Party wishes to receive the informationfrom the Requested Party;(c)the tax purposes for which the information
requested is sought;(d)grounds for believing that the information
requested is held by the Requested Party or is in
the possession or control of a person who is
within the territorial jurisdiction of theRequested Party;(e)to the extent known, the name and address of any
person believed to be in possession or control of
the information requested;(f)a statement that the request is in conformity
with the laws and administrative practices of the
Applicant Party, that the Applicant Party would
be able to obtain the information under the laws
or in the normal course of administrative
practices of the Applicant Party in similar
circumstances and that the request is inconformity with the Agreement; and(g)a statement that the Applicant Party has pursued
all means available within its territorial
jurisdiction to obtain the information requested,
except those that would give rise todisproportionate difficulties.

6.
The competent authority of the Requested Party shallforward the information requested as promptly as possible
to the Applicant Party. To ensure a prompt response, thecompetent authority of the Requested Party shall:

6

(a)

confirm receipt of a request in writing to thecompetent authority of the Applicant Party andshall notify the competent authority of the
Applicant Party of deficiencies in the request,
if any, within sixty days of the receipt of therequest; and(b)

if the competent authority of the Requested Party
has been unable to obtain and provide theinformation within ninety days of the receipt of
the request, including if it encounters obstacles
in furnishing the information or it refuses tofurnish the information, immediately inform theApplicant Party, explaining the reason for its
inability, the nature of the obstacles or thereasons for its refusal.
Article 6
TAX EXAMINATIONS ABROAD

1.
At the request of the competent authority of the
Applicant Party, the competent authority of the Requested
Party may allow representatives of the competent authorityof the Applicant Party to be present at the appropriate
part of a tax examination in the Requested Party.
2.
If the request referred to in paragraph 1 is acceded
to, the competent authority of the Requested Party
conducting the examination shall, as soon as possible,
notify the competent authority of the Applicant Party about
the time and place of the examination, the authority or
official designated to carry out the examination and theprocedures and conditions required by the Requested Party
for the conduct of the examination. All decisions withrespect to the conduct of the examination shall be made by
the Requested Party conducting the examination.
Article 7
POSSIBILITY OF DECLINING A REQUEST
1.
The Requested Party shall not be required to obtain orprovide information that the Applicant Party would not beable to obtain under the laws or in the normal course ofadministrative practices of the Applicant Party in similar
circumstances. The competent authority of the Requested
Party may decline to assist where the request of the
Applicant Party is not made in conformity with thisAgreement.

7

2.
This Agreement shall not impose on a Contracting Party
the obligation to supply information which would disclose
any trade, business, industrial, commercial or professionalsecret or trade process. Such information includes
information relating to 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 the lawsof each Contracting Party. Notwithstanding the foregoingsentences, information of the type referred to in paragraph
4 of Article 5 shall not be treated as such a secret or
trade process merely because it meets the criteria in thatparagraph.
3.
The Requested Party may decline a request for
information if the disclosure of the information requested
would be contrary to public policy (ordre public) of theRequested Party.
4.
A request for information shall not be refused on the
ground that the tax claim giving rise to the request is
disputed.
5.
The Requested Party may decline a request for
information if the information is requested by the
Applicant Party to administer or enforce any provision of
the tax laws of the Applicant Party, or any requirement
connected therewith, which discriminates against a nationalof the Requested Party as compared with a national of the
Applicant Party in the same circumstances.
Article 8
CONFIDENTIALITY
Any information received by a Contracting Party under
this Agreement shall be treated as confidential and may bedisclosed only to persons or authorities (including courts
and administrative bodies) in the Contracting Party
concerned with the assessment or collection of, theenforcement or prosecution in respect of, or thedetermination of appeals in relation to, the taxes coveredby the Agreement. Such persons or authorities shall use
such information only for such purposes. They may disclose
the information in public court proceedings or in judicial
decisions. The information may not be disclosed to any
other person or authority, including those in nonContracting Parties, without the express written consent of
the Requested Party.

8Article 9
COSTS
Incidence of costs incurred in providing assistanceshall be agreed by the competent authorities of theContracting Parties.
Chapter 3
ALLOCATION OF RIGHTS OF TAXATION
Article 10
PERSONS COVEREDThis Chapter shall apply to individuals who areresidents of one or both of the Contracting Parties.
Article 11
TAXES COVERED1.
This Chapter shall apply to taxes on income ofindividuals imposed on behalf of a Contracting Party,
irrespective of the manner in which they are levied.
2.
In the case of Japan, the existing tax to which this
Chapter shall apply is the income tax.
3.
This Chapter shall apply also to any identical or
substantially similar taxes that are imposed after the dateof signature of this Agreement in addition to, or in placeof, the existing tax referred to in paragraph 2.
4.
The competent authorities of the Contracting Parties
shall notify each other of any significant changes thathave been made in their respective tax laws.
Article 12
RESIDENT1.
For the purposes of this Chapter, the term “residentof a Contracting Party” means:(a)in the case of Japan, any individual who, under
the laws of Japan, is liable to tax therein byreason of his domicile, residence or any othercriterion of a similar nature except any
individual who is liable to tax in Japan inrespect only of income from sources in Japan; and(b)in the case of the Cayman Islands, any individual
who, under the laws of the Cayman Islands, has alegal and ordinary residence in the Cayman
Islands.

92.
Where by reason of paragraph 1 an individual is a
resident of both Contracting Parties, then his status shallbe determined as follows:(a)he shall be deemed to be a resident only of theContracting Party in which he has a permanent
home available to him; if he has a permanent homeavailable to him in both Contracting Parties, heshall be deemed to be a resident only of theContracting Party with which his personal andeconomic relations are closer (centre of vitalinterests);(b)

if the Contracting Party 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 Party, he shall bedeemed to be a resident only of the Contracting
Party in which he has an habitual abode;(c)

if he has an habitual abode in both Contracting
Parties or in neither of them, the competentauthorities of the Contracting Parties shallsettle the question by mutual agreement.
Article 13
PENSIONS

Subject to paragraph 2 of Article 14, pensions andother similar remuneration beneficially owned by a residentof a Contracting Party shall be taxable only in thatContracting Party.
Article 14
GOVERNMENT SERVICE
1.
Salaries, wages and other similar remuneration paid by
a Contracting Party or a political subdivision or local
authority thereof to an individual in respect of services
rendered to that Contracting Party or political subdivisionor local authority, in the discharge of functions of agovernmental nature, shall be taxable only in thatContracting Party. However, such salaries, wages and othersimilar remuneration shall be taxable only in the other
Contracting Party if the services are rendered in that
other Contracting Party and the individual is a resident ofthat other Contracting Party who did not become a residentof that other Contracting Party solely for the purpose of
rendering the services.

102.
Notwithstanding paragraph 1, pensions and othersimilar remuneration paid by, or out of funds to which
contributions are made or created by, a Contracting Partyor a political subdivision or local authority thereof to anindividual in respect of services rendered to thatContracting Party or political subdivision or local
authority shall be taxable only in that Contracting Party.
3.
Paragraphs 1 and 2 shall not apply to salaries, wages,
pensions, and other similar remuneration in respect ofservices rendered in connection with a business carried on
by a Contracting Party or a political subdivision or local
authority thereof.
Article 15
STUDENTS
Payments which a student or business apprentice who isor was immediately before visiting a Contracting Party a
resident of the other Contracting Party and who is present
in the first-mentioned Contracting Party 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 Party, provided
that such payments arise from sources outside the firstmentioned Contracting Party. The exemption provided bythis Article shall apply to a business apprentice only fora period not exceeding one year from the date on which hefirst begins his training in the first-mentioned
Contracting Party.
Chapter 4
SPECIAL PROVISIONS
Article 16
MUTUAL AGREEMENT PROCEDURES
1.
Where a person considers that the actions of one orboth of the Contracting Parties result or will result for
him in taxation not in accordance with Chapter 3, he may,irrespective of the remedies provided by the laws of thoseContracting Parties, present his case to the competentauthority of the Contracting Party of which he is a
resident. The case must be presented within three years
from the first notification of the action resulting in
taxation not in accordance with that Chapter.

11

2.
The competent authority of a Contracting Party shallendeavour, if the objection appears to it to be justified
and if it is not itself able to arrive at a satisfactory
solution, to resolve the case by mutual agreement with thecompetent authority of the other Contracting Party, with aview to the avoidance of taxation which is not inaccordance with Chapter 3. Any agreement reached shall be
implemented notwithstanding any time limits in the laws of
the Contracting Parties.
3.
The competent authorities of the Contracting Parties
shall endeavour to resolve by mutual agreement any
difficulties or doubts arising as to the interpretation orapplication of this Agreement.
4.
The competent authorities of the Contracting Parties
may communicate with each other directly for the purpose ofreaching an agreement in the sense of the preceding
paragraphs of this Article.
Chapter 5
FINAL PROVISIONS
Article 17
HEADINGS
The headings of the Chapters and the Articles of thisAgreement are inserted for convenience of reference onlyand shall not affect the interpretation of the Agreement.
Article 18
ENTRY INTO FORCE
1.
The Governments of the Contracting Parties shallnotify each other, in writing, of the completion of theirrespective internal procedures necessary for the entry into
force of this Agreement. The Agreement shall enter into
force on the thirtieth day after the latter of the dates ofreceipt of the notifications.
2.
This Agreement shall be applicable for taxes levied on
or after the date on which the Agreement enters into force.
3.
Notwithstanding paragraph 2, Chapter 3 shall beapplicable:(a)with respect to taxes withheld at source, foramounts taxable on or after 1 January in thecalendar year next following that in which thisAgreement enters into force; and

12

(b)

with respect to taxes on income which are notwithheld at source, as regards income for any
taxable year beginning on or after 1 January inthe calendar year next following that in which
this Agreement enters into force.
Article 19
TERMINATIONThis Agreement shall remain in force until terminatedby a Contracting Party. Either Contracting Party may
terminate the Agreement by giving written notice oftermination at least six months before the end of any
calendar year beginning after the expiry of five years fromthe date of entry into force of the Agreement. In such
event, the Agreement shall cease to have effect:(a)with respect to taxes withheld at source, foramounts taxable on or after 1 January in thecalendar year next following that in which thenotice is given;(b)with respect to taxes on income which are notwithheld at source, as regards income for any
taxable year beginning on or after 1 January inthe calendar year next following that in which
the notice is given; and(c)with respect to other taxes, as regards taxes
levied on or after 1 January in the calendar year
next following that in which the notice is given.

IN WITNESS WHEREOF the undersigned, being duly
authorised thereto by their respective Governments, havesigned this Agreement.
DONE in duplicate at London this seventh day of
February, 2011, in the Japanese and English languages, eachtext being equally authentic.

For the Government of Japan:

For the Government of
the Cayman Islands:

Hitoshi Noda

W. McKeeva Bush

13