For the establishment of a Tax Treaty between Japan and Peru

Transcription

1 <12th Japan Peru Economic Council > For the establishment of a Tax Treaty between Japan and Peru September 2016 Japan-Peru Chamber of Commerce Norihide Tsutsumi 堤儀秀 (Mitsubishi Peru S.A. CEO)

2 CAMARA DE COMERCIO E INDUSTRIA PERUANO JAPONESA (CCIPJ) Basic Information [Foundation] May 23, 1969 [Purpose] Promote Investment, Trade, and Personal Exchanges between Japan and Peru [Members] 106 members (33 Japanese members, 66 Peruvian members, +others) Organization Sructure 1

3 History Japan and Peru 1873 Establishment of diplomatic agreement between Peru and Japan 1980 First JICA volunteer dispatched to Peru th anniversary after the arrival of Japanese immigrants to Peru 2008 Prime Minister Abe visit to Peru for APEC President Garcia visit to Japan First 790 Japanese immigrants arrive to Peru 1990 Alberto Fujimori Becomes president of Peru (First Japanese immigrant to become President) 2012 President Humala visit to Japan year anniversary of diplomatic relation between Peru and Japan 2

4 Economic Treaties between Japan and Peru Agreement of Commerce ( 通商協定 ) Promotion, Protection and Liberalization of Investment Agreement ( 日 ペルー投資協定 ) Economic Partnership [EPA] ( 日 ペルー経済連携協定 ) 2012 Free Trade Agreement [FTA] ( 日 ペルー自由貿易協定 ) Source: Ministry of Foreign Affairs of Japan 3

5 Japan Countries with Tax Treaty Tax Convention with 65 countries and regions. In South America Brazil (1967) Mexico (1996) Chile (2016) Source: Ministry of Foreign Affairs of Japan 4

6 Japan Countries with Tax Convention Asia-Pacific Americas Europe Eastern Europe Central Asia Middle East Africa China USA Ireland Rumania Egypt South Korea Canada UK Hungary Zambia Hong Kong Brazil Italy Poland Israel Taiwan Mexico Austria Russia Turkey Singapore Chile Netherlands Bulgaria South Africa Malesia Switzerland Kyrgyzstan Saudi Arabia Indonesia Sweden Uzbekistan Kuwait Philippines Spain Czech Republic UAE Vietnam Denmark Slovakia Oman Thailand Germany Georgia Qatar Brunei Norway Tajikistan India Finland Turkmenistan Pakistan France Ukrain Bangladesh Belgium Armenia Sri Lanka Portugal Moldova Fiji Australia New Zealand Azerbaijan Kazakhstan Total 18 Total 5 Total 15 Total 17 Total 10 Source: Ministry of Foreign Affairs of Japan 5

7 Peru - Countries with Tax Convention Tax Convention with 9 countries. In Asia Korea (2015) Source: Ministry of Foreign Affairs of Japan 6

8 Peru - Countries with Tax Convention Asia-Pacific Americas Europe Eastern Europe Central Asia Middle East Africa South Korea Canada Switzerland Brazil Portugal Mexico Bolivia Colombia Ecuador Total 1 Total 6 Total 2 Total 0 Total 0 Source: Ministry of Foreign Affairs of Japan 7

9 GDP Growth Rate of Peru Country Name LAT Average Peru Argentina N/A Bolivia Brazil Chile Colombia Ecuador Guatemala Mexico Panama Paraguay Uruguay Source: World Bank 8

10 Mining Sector Investment Plans Company Country of Company Project Beginning of Project Production per year (t) (Amount: US$ Million) Investment (US 100M) Expansion Project SOUTHERN PERU COOPER CORP Mexico Cuajone , SOUTHERN PERU COOPER CORP Mexico Fundición N.D. 200,000 N.D. SOUTHERN PERU COOPER CORP Mexico Toquepala , SOUTHERN PERU COOPER CORP Mexico Refinería de Ilo N.D. 820,000 N.D. SOCIEDAD MINERA CERRO VERDE USA/ JPN Cerro Verde ,000 4,400 MINERA CHINALCO PERÚ S.A. China Toromocho ,000 1,320 Mining Projects with EIA Approved ANGLO AMERICAN QUELLAVECO UK / JPN Quellaveco ,000 3,300 MINERA CHINALCO PERÚ China Toromocho ,000 3,500 MINERA YANACOCHA USA/ Peru Minas Conga ,000 4,800 HUDBAY MINERALS. Canada Constancia ,000 1,790 XSTRATA LAS BAMBAS China Las Bambas ,000 5,200 COMPAÑÍA MINERA ALPAMARCA Peru Alpamarca-Rio Pallanga 2013 N.D. 90 MINERA SHOUXIN PERU China Explotation de relaves , Mining Projects with EIA Submitted COMPAÑIA MINERA MILPO Brazil Pukaqaqa , TOTAL 2,532,040 26,169 Source: JETRO Peru 9

11 Energy Sector Investment Plans (Amount: US$ Million) Improvement of energy security and Development of Sothern Peru Gas Pipeline 1,200 1,200 1, ,600 Lima/Callao LNG Supply System Improvement of rural electricity coverage Mystification of the use of natural gas in the center and south of Peru Transmission Lines Others TOTAL 1,989 2,052 1, ,708 Source: JETRO Peru 10

12 Infrastructure Sector Investment Plans (Amount: US$ Million) Sector (Needs) (Investment Estimation) (Investment GAP) Water 12,252 3,217 9,035 Portable Water 2,629-2,629 Waste Water Treatment 9,623-9,623 Communication 27,036 2,024 25,012 Cell Phone 6, Broadband 20, Transportation 57,499 16,420 41,079 Train 16,983 7,615 9,368 Road 31,850 6,121 25,729 Airport 2,378 1, Port 6,287 1,060 5,227 Energy 30,775 5,708 25,067 Health 18,944 1,797 17,147 Education 4, ,631 Pre-school 1,621-1,621 Primary School Middle School 2,672-2,672 Hydraulic power 8,477 3,100 5,377 TOTAL 159,549 33, ,345 Source: JETRO Peru 11

13 Foreign Investment to Peru (Amount: US$ Million) Data by Proinversion Country ~2015 Amount Amount Ratio % Difference % Amount Ratio % Spain , UK , USA , Chile , Netherlands , Brazil , Colombia , Canada , Panama Luxemburg Switzerland Mexico Singapore Bermuda Japan France China Others , TOTAL , Data by Central Reserve Bank of Peru TOTAL 7,885 6, ,061 - Data by the Central Bank of Japan (Japan s Investment to Peru) TOTAL

14 Japan s Foreign Investment (Amount: US$ Million) Average ratio of investment to countries with Tax Treaties is 68% (Min: 62%, Max: 76%) % 66% 73% 76% 75% 75% 72% 70% 68% 67% 65% 65% 64% 63% 64% 63% Investment to foreign countries Investment to countries with Tax Conventions Source: Central Bank of Japan 13

15 Extra Chapter (May Not Use) 14

16 Trade between Peru and Japan (Amount: US$ Million) Trade Amount between Japan and Peru (2015) 3,000 2,571 2,500 2,175 2,226 2,000 1,500 1,315 1,501 1,438 1,584 1,106 1,119 1,073 1,000 Import from Japan 500 Export to Japan Source: JETRO Peru 15

17 Trade between Peru and Japan Import from Japan (2015) Export to Japan (2015) Metal Product 11.1% Non-metals 0.9% Others 7.1% Natural Gas 3% Fish Meal 5% Coffee 1% Others 10% Chemicals 16.5% US$ 1,119 M Automobile and parts 40.1% Petroleum Products 4% US$ 1,073M Other Machinery 2.1% Metal Products 79% Electronics and parts 5.0% Machinery and parts 17.3% Source: JETRO Peru 16

18 Benefits of Tax Convention Establishment of maximum tax rate on investment income Clarification on taxation scope Secure discussion table between the Peruvian Gov. and Japanese Gov. The treaty will enable to set a an upper limit to the tax rate, preventing excess taxation. Clarification on scope of corporate taxation law to avoid conflicts caused by different interpretation. Less risk for new businesses to enter the local market. Any conflict cause by different interpretations of the taxation law can be resolved between tax authorities. Faster solution to multi-lateral taxation conflicts. 17