The Federal Board of Revenue (FBR) initiated re-negotiations on the Agreement for the elimination of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance between Pakistan and Germany.
In this connection tax delegations of both the countries met at Islamabad for the first round of negotiations from 18-22 September, 2023. The first draft of the Agreement was initialed by the respective heads of delegation on September 22, 2023, in Islamabad after detailed consultations and mutual agreement on key articles of the draft Agreement.
It is pertinent to mention that the existing Agreement for the Avoidance of Double Taxation between Pakistan and Germany in practice was signed in 1994 and requires revision to cater to changing tax rules and regulations as per international and domestic needs.
The revised agreement once finalized will not only strengthen the existing safeguards against double taxation on the income of the residents of both countries without creating opportunities for non-taxation or reduced taxation through abusive arrangements.
It will also promote economic cooperation, strengthen the existing bilateral economic relations, and enhance investments in both countries while ensuring adequate certainty with respect to taxation rules applicable to cross-border business transactions. Taxpayers of both countries will get relief from double taxation resulting in boosting the trading activities in both countries.
Source: Pro Pakistani