The Japanese and U.S. governments put into effect on Friday a protocol amending the bilateral tax treaty to avoid double taxation and prevent tax evasion, some six years after they agreed on it in 2013.
The two sides exchanged ratification documents at the Japanese Foreign Ministry the same day.
The protocol exempts interest payments to Japanese companies in the United States from U.S. withholding taxes, from Nov. 1.
It also relaxes conditions for tax exemption for dividend payments from U.S. subsidiaries to Japanese parents.
The treaty revision is expected to galvanize investment between the two countries, a Japanese government source said.
The Diet approved the protocol in 2013. But due to Republican opposition, the U.S. Senate took about six years before it passed the protocol in July this year. President Donald Trump signed it only this month.