On December 17, 2013, the Protocol Amending the Convention between Japan and the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains (the "Protocol") was executed in London.
The Japan–UK income tax treaty amended by the Protocol (the "Revised Treaty") will be the first income tax treaty for Japan that adopts the Authorized OECD Approach (the "AOA"). Under the Revised Treaty, (i) shareholding requirement with regard to dividends exempted from taxation by the source country will be reduced from "50 percent or more" to "10 percent or more"; (ii) interest income will, in principle, be exempted from taxation by the source country; (iii) capital gains arising from the transfer of shares similar to business transfers by the source country will, in principle, be exempted; (iv) arbitration proceedings under the mutual agreement procedure will be introduced; and (v) the tax authorities of Japan and the UK may assist each other in the collection of revenue claims (specifically for consumption tax, value added tax, inheritance tax, and gift tax, to which the Revised Treaty is not applicable).
The Protocol will take effect 30 days after the date of the exchange of diplomatic notes indicating the approvals required under the legal procedures of both Japan and the UK.
For additional reference, as of March 1, Japan has concluded 51 income tax treaties applicable to 62 jurisdictions and eight tax information exchange agreements applicable to eight jurisdictions. Japan is also a member country of the "Convention on Mutual Administrative Assistance in Tax Matters." The income tax treaty between Japan and Germany is currently undergoing official negotiations.

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