The government is about to propose amending its tax treaty with the Philippines for the first time since the accord took effect in 1980, government officials said Monday.
The proposal could be made next week, with bilateral economic relations expected to strengthen amid advances in free-trade agreement talks between the two countries, the officials said.
Japan hopes to bring the Philippines to the negotiating table by emphasizing that amendments to the treaty would increase direct investment from Japan.
Japanese companies doing business in the Philippines and other countries are calling for taxes on dividend payments to their parents to be eliminated or reduced.
Japan and the United States revised their tax accord last year for the first time in about 30 years, with the revised pact including tax exemption for these payments.
It is uncertain whether the Philippine government will readily come to the negotiating table as amendments to the treaty may result in a drop in Manila’s tax revenue, such as revenue generated from copyright and patent royalties.
Japan has concluded tax treaties with 45 countries. Last year, it started talks with the Netherlands to revise their bilateral tax accord.
Once negotiations to amend a tax treaty get under way, they usually take two to three years to be concluded.
More FTA talks
The Associated Press
Japan and the Philippines launched a fourth round of talks Monday toward signing a free-trade agreement in Tokyo’s latest efforts to reduce economic barriers with its Asian neighbors.
Japan has been stepping up its campaign to liberalize trade in the region, agreeing on dates to begin FTA talks with the 10-member Association of Southeast Asian Nations over the weekend.
In Tokyo on Monday, Japanese and Filipino negotiators began three days of talks on potential goods, services and investments that could fall under the pact, the Foreign Ministry said in a statement.
Tokyo wants Manila to open its markets to investment from Japanese businesses, while the Philippines is seeking to have Filipino nurses and other health-care workers permitted to work in Japan.
Japan is already facing a shortage of nurses and other medical personnel, particularly in rural areas.
But Tokyo, conscious of public concerns that such workers could put Japanese out of jobs, is expected to demand certain conditions, including ensuring that Filipino workers can speak Japanese and meet local qualification standards.
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