Australia (1) Belgium Brazil Czechoslovakia Finland Germany Hong Kong (2)
Hungary Indonesia Ireland Italy Netherlands (old/new) (3) Philippines (2) Poland
Romania Spain Switzerland (2) UK (1) US (2) Zambia
(1)
Exemption is available if the Japanese company in which shares are sold is not a real estate holding company and the capital gains are subject to tax in the foreign investor’s country of residence. Note that due to a UK domestic tax rule, the capital gains on shares in a Japanese subsidiary are most likely not subject to tax in the UK.
(2)
Exemption is not applicable in relation to real estate holding companies.
(3)
Under the amended tax treaty that is applicable from 2012, exemption is not applicable in relation to real estate holding companies. Note that the amended tax treaty includes a 1-year grandfathering rule.
The tax treaties with Kuwait and Portugal that are not yet applicable also provide for exemption unless the Japanese company is a real estate holding company. Furthermore, the Japan-US tax treaty and the new tax treaties with Hong Kong, the Netherlands and Switzerland include a clause to give a source country the taxing right on capital gains from shares of distressed financial institutions. The tax treaties with Kuwait and Portugal that are not yet enacted also include such clauses.
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