RPT-Japan to waive tax on SWF's interest income-Nikkei

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NEW YORK Feb 18 (Reuters) - The Japanese government will waive the tax on the interest accrued on sovereign wealth funds' holdings in the country, the Nikkei business newspaper reported on its web site.

Overseas investors generally face a 15 percent tax on interest income. Investors from countries with which Japan has bilateral tax accords are imposed a lower tax of 5 to 10 percent.

The report said that for sovereign funds of treaty partners, Japan plans to exempt the interest from bond holdings, deposits and loans. Both corporate and government bonds will be covered by the exemption, but not stock dividends.

Nikkei also said Japan has already reached a basic agreement on a tax treaty with Kuwait, while negotiations are ongoing with the United Arab Emirates and Saudi Arabia. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler)