TOKYO – Japan and Peru have reached an agreement to avoid double taxation between the two countries and fight tax evasion, the Japanese foreign ministry said on Tuesday.
The agreement was signed Monday in Lima between Peruvian Foreign Minister Gustavo Meza-Cuadra and the Japanese ambassador in Lima, Sadayuki Tsuchiya, according to a statement by the ministry.
“This Convention will enable the tax authorities of the two countries to consult each other on taxation not in accordance with the provisions of this Convention, to exchange information concerning tax matters and to mutually lend assistance in the collection of tax claims,” the statement said.
The convention establishes the parameters within which tax will be applied to the business profits of an enterprise of either of the two countries, in the case it has a permanent establishment in the other nation.
Likewise, taxation on investment income is set at a rate of up to 10 percent on dividends and interest and 15 percent on royalties in the country where they are generated.
According to the official statistics, Japan imported products worth 263.16 billion yen ($2.42 billion) from Peru in 2018. Exports from Japan climbed to 81.26 billion yen.
The two countries also signed a free trade agreement in 2011 that came into force in March 2012.