TOKYO – Japan and Uruguay have signed an agreement to eliminate double taxation and prevent tax evasion, the Japanese foreign ministry said in a statement on Tuesday.
The convention was signed by Uruguayan Finance Minister Danilo Astori and the Japanese ambassador to Uruguay, Tatsuhiro Shindo, in Montevideo on Friday, according to the statement.
“For the purpose of eliminating double taxation arising between the two countries, this Convention clarifies the scope of taxable income in the two countries,” the ministry said.
“It is expected that, while eliminating double taxation and preventing international tax evasion and tax avoidance, this Convention promotes further mutual investments and economic exchanges between the two countries,” it added.
The agreement will also pave the way for tax authorities of both countries to consult each other on taxation that is not in accordance with the provisions of the convention.
On April 19, the Japanese government announced that it had reached an agreement in principle on this matter and that the convention would be signed when all the details were defined.
The agreement will enter into force 30 days after the completion of legal proceedings in each country, which in the case of Japan, include parliamentary ratification.
Trade between Japan and Uruguay reached 8.4 billion yen ($77.6 million) in 2018, with a trade balance decidedly in favor of the Asian country, according to data from the Japanese finance ministry.