Convention between the Government of the Union of Soviet Socialist Republics and the Government of Japan for the avoidance of double taxation with respect to taxes on income (Tokyo, 18th of January, 1986)

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CONVENTION

between the Government

of the Union of Soviet Socialist Republics

and the Government of Japan

for the Avoidance of Double Taxation

with respect to Taxes on Income

Tokyo, 18th of January, 1986

The Government of the Union of Soviet Socialist Republics and the Government of Japan,

Desiring to conclude a Convention for the avoidance of double taxation with respect to taxes on income,

Have agreed as follows:

Article 1

1. This Convention shall apply to persons who are residents of one or both of the Contracting States.

2. For the purposes of this Convention, the term "resident of a Contracting State" means any person who is liable to tax in that Contracting State by reason of his domicile, residence, place of head or main office, place of management or any other criterion of a similar nature.

3. Where by reason of the provisions of paragraph 2 a person is a resident of both Contracting States, then the competent authorities of the Contracting States shall determine by mutual agreement the Contracting State of which that person shall be deemed to be a resident for the purposes of this Convention.

Article 2

1. This Convention shall apply to the following taxes:

a) in Japan:

I) the income tax;

II) the corporation tax; and

III) the local inhabitant taxes;

b) in the Union of Soviet Socialist Republics (hereinafter referred to as "the USSR"):

I) the individual income tax; and

II) the income tax on foreign legal persons.

2. This Convention shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of this Convention in addition to, or in place of, those referred to in paragraph 1.

Article 3

For the purposes of this Convention, unless the context otherwise requires:

a) the terms "a Contracting State" and "the other Contracting State" mean the USSR or Japan, as the context requires;

b) the term "international traffic" means any transport by a ship or aircraft operated by a resident of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

c) the term "person" includes an individual, a legal person or any entity treated as a legal person for tax purposes (hereinafter referred to as "a legal person"), and any other body of persons;

d) the term "competent authority" means:

I) in the case of Japan, the Minister of Finance or his authorized representative; and

II) in the case of the USSR, the Ministry of Finance of the USSR or its authorized representative.

Article 4

1. For the purposes of this Convention, the term "permanent establishment" means any fixed place of business through which the business of a resident of a Contracting State is wholly or partly carried on.

2. A building site or construction or installation project constitutes a permanent establishment only if it lasts more than 12 months.

3. Notwithstanding the provisions of paragraphs 1 and 2, the term "permanent establishment" shall be deemed not to include:

a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the resident mentioned in paragraph 1;

b) the maintenance of a stock of goods or merchandise belonging to the resident mentioned in paragraph 1 solely for the purpose of storage, display or delivery;

c) the maintenance of a stock of goods or merchandise belonging to the resident mentioned in paragraph 1 solely for the purpose of processing by another person;

d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or of collecting information, for the resident mentioned in paragraph 1;