The repo committee of the International Securities Market Association(ISMA) has confirmed that the interest on repo transactions in Japan will be free of withholding tax for another two years at least.
On 7 August 2002 ISMA published the Japanese securities annex which contains amendments to the 1995 and 2000 versions of the Global Master Repurchase Agreement(GMRA), so as to enable users of the GMRA to fall within the scope of an exemption from Japanese withholding tax on repo interest available in respect of repo transactions meeting certain criteria.
This exemption was available in respect of repo transactions entered into between 1 April 2002 and 31 March 2004. ISMA says that the exemption has been extended for another two years covering repo transactions entered into between 1 April 2004 and 31 March 2006. The exemption has been extended on the same terms so that the Japanese securities annex to the GMRA 1995 and 2000 does not require amendment in order for you to rely on the extended exemption.