In the context of transparency, member countries must be obligated to clarify their investment-related law and regulations and permission application procedures. Technical cooperation also needs to be provided to promote developing country development of important investment-related legislation, such as bankruptcy and credit protection laws. While multilateral rules on investment are important, because the WTO includes countries at various stages of economic development, it could take some time to reach consensus. Moreover, there is also a concern that agreement will not be reached on high-level rules which go beyond the content of existing investment agreements to include new areas such as the free movement of executives and engineers. Many companies are experiencing taxation problems in their business with other countries.
Tax treaties play an important role in the resolution of such problems.
Japan has already concluded tax treaties with 44 countries, but these are for the most part with developed countries or Asian countries, with almost no coverage in Latin America, the Middle East or Africa. Japan must widen the scope of its tax treaty partners, while also reviewing as appropriate those existing treaties which have been outdated through technological advances. For example, consideration should be given to amendments so that withholding tax is not levied on software transactions and neither party levies withholding tax on interest. Pension aggregation agreements are important in eliminating double social welfare payments by companies. In particular, because of our close economic ties, Japan needs to conclude such an agreement as soon as possible with the United States.