Smith, Koumura sign new tax treaty

Australia and Japan have signed their first tax treaty since 1969, enhancing the investment relationship between the Pacific trading partners. The new treaty, signed in Tokyo recently by Australian Foreign Affairs Minister Stephen Smith and his Japanese counterpart Masahiko Koumura, includes provisions to avoid taxation and evasion problems for funds flowing between the countries. "The new treaty will broadly update taxation arrangements between Australia and Japan," Smith said in a statement. "This includes broadly aligning capital gains tax treatment with Organisation for Economic Co-operation and Development (OECD) practice and providing for improved integrity measures." Discusssions between the ministers also included trade and the controversial whaling issue.