ISLAMABAD: Federal Board of Revenue (FBR) is preparing the draft to withdraw the dual taxes and review coordination for curbing tax evasion between Pakistan and China.
Official sources told Customs Today that Pakistan and China already signed an agreement for avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income; however, now Chinese companies have decided to invest in other sectors than CPEC and have started registration of its sub-companies for investments in already established 29 economic zones under CPEC in different parts of the country.
For this purpose, the board has started working to develop a review draft for the agreement to withdraw dual taxes and strengthen coordination between the countries to avoid tax evasion, sources confirmed.
Sources added that under this agreement, both the countries may also consult elimination of double taxation and avoiding of tax evasions. The draft is being prepared and will be moved forward to Finance Ministry for further perusal, sources added.
It is important to mention here certain Chinese firms are enjoying major tax exemptions, such as import duties and income tax which resulted in major imbalance between cost structures of the domestic and Chinese companies.
