ISLAMABAD: Pakistan and Switzerland have renegotiated an agreement on Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to taxes on income.
This agreement was signed in 2014 and now an article related to provision for exchange of information about money laundering-related cases is being included in it.
The negotiations have been concluded and draft agreement has been initialed by the negotiating teams of both the countries. However, the agreement has not come into force as some legal formalities are pending,” a source at the Federal Board of Revenue (FBR) shared information with Customs Today here.
On the basis of shared information, now it is established that Finance Minister Ishaq Dar made announcement regarding repatriation of looted national money from Swiss banks without presence of any treaty between both the countries.
Because the source said that there was no agreement for repatriation of money from Swiss Banks between Government of Pakistan and Government of Switzerland.
Neither there is any article in the existing Avoidance of Double Taxation Agreement between Pakistan and Switzerland which deals with repatriation of money from Swiss Banks.
However, the source said that in 2013, it was decided to review the existing Avoidance of Double Taxation Agreement and particularly Article on Exchange of Information for which negotiations took place in August, 2014.
The archaic formulation of Article 26 has been replaced with a new one reflecting internationally accepted standards on Exchange of Information sponsored by both UN and Organisation for Economic Co-operation and Development (OECD), which, upon enforcement of the new Tax Administrative Assistance Act, will oblige Switzerland to exchange all information including heretofore confidential bank account information.
Moreover, the source added that even there was no bilateral agreement for exchange of information between Government of Pakistan and Government of Switzerland.
The new article obliges the contracting states to exchange requested information even if the same cannot be requisitioned for the purpose of their domestic taxation and even if it is not available with the tax authorities and is held by any other authority including financial institutions in their state.
