by Mary Swire, Tax-News.com, Hong Kong
On January 8, 2020, Japan and Morocco signed a double taxation agreement.
The DTA caps the withholding tax rate that can be charged in the source country for cross-border dividends income at 10 percent. A reduced five percent rate will apply where the recipient holds at least 10 percent of the voting power in the paying company, if it is a company of Japan; or at least 10 percent of the capital of the paying company, where the company is a company of Morocco.
The agreement sets the maximum withholding tax rate for interest income at 10 percent, with an exemption for interest received by government bodies of each country. The maximum withholding tax rate for royalties is 10 percent, with a reduced five percent rate for the use of, or the right to use, industrial, commercial, or scientific equipment.
The DTA also provides for the exchange of information and for mutual assistance in the collection of tax claims. It contains an anti-abuse provision and provides for mutual agreement procedure dispute resolution.
