The maximum withholding tax rates stipulated in the new tax treaty between Austria and Japan are as follows:
Dividends (Article 10):
- 0%, if the beneficial owner of the dividends is a resident of the other contacting state and is either:
- a company which has owned directly or indirectly, for the period of six months ending on the date on which the entitlement to the dividends is determined, at least 10 per cent of the voting power of the company paying the dividends, or
- a pension fund, provided that such dividends are derived from the activities principally to administer or provide pensions, retirement benefits or other similar remuneration or to earn income for the benefit of one or more persons operated principally to administer or provide pensions, retirement benefits or other similar remuneration and is exempt from tax in that Contracting State with respect to income derived from the activities described above
Interest (Article 11):
Article 22 Entitlement to benefits provides additional clarifications to the benefits granted by the DTT in regards to Article 10 (Dividends) and Article 11 (Interest) or Article 12 (Royalties).
Article 26 Exchange of information provides additional clarifications in regards to exchange of information between the competent authorities of the Contracting States.
The full wording of the DTT is available in English under the following link:
Bank Austria has send an official inquiry to the Austrian Ministry of Finance asking for clarification about the new documentation requirements for tax reclaims of Japanese Pension Funds.
Impact on investors: The new DTT will apply for all income received from 1 January 2019 onwards. However, tax reclaims become possible on 1 January 2020 at the earliest.