The governments of Japan and Luxembourg have released a document that clarifies certain stipulations in the taxation agreement signed between the two countries in 1992, particularly the part that involves private wealth management companies. 

In the notes exchanged 19 July 2013, the governments confirmed (referring to Article 25 of the Convention) that the term "such other companies which enjoy a similar special fiscal treatment by virtue of the laws of Luxembourg" includes SPF (societe de gestion de patrimoine famililal) or private wealth management firms.

The original double taxation agreement said that exchange of tax information did not apply to Luxembourg holding companies or similar firms receiving special fiscal treatment. This old note thereby allowed SPFs to receive exemptions from corporate income tax, municipal business tax and net wealth tax.

In effect, the new set of notes exchanged clears that Convention articles should not be construed as preventing Japan and Luxembourg from exchanging information related to SPFs. 

The notes will take effect on the 30th day after the date of the exchange of notes and will apply with respect to taxes withheld at source, for amounts taxable on or after 18 August 2013, and with respect to taxes on income not held at source, as regards income for any taxable year starting 18 August. 

Read the full exchange of notes.