New tax agreement to be implemented between Japan and Liechtenstein
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The Japanese Ministry of Finance (MOF) has announced that a new tax agreement between Japan and the Government of Liechtenstein, under negotiation since 12 March 2012, has been agreed upon by both governments.
The main objective of the new tax agreement is to establish a relevant information-exchange clause, in line with international standards, to avoid international tax evasion.
With the relevant tax agreement including the information-exchange clause in place, it is expected that financial institutions domiciled in Liechtenstein will be allowed to apply for Qualified Foreign Intermediary (QFI) status in Japan, required for tax exemption on interest income.
The new tax agreement will go through the formal ratification process in Japan and Liechtenstein respectively before implementation. For Japan, the approval of the national Diet will be required.