ISLAMABAD: Pakistan and Switzerland signed the revised Agreement on Avoidance of Double Taxation with respect to Taxes on Income.
The revised Avoidance of Double Taxation Agreement will open new vistas for cooperation, especially in the areas of exchange of information for tax purposes. It contains improvements with regard to the taxation of service fees and capital gains resulting from the sale of qualifying participants.
These rules promote economic exchange in bilateral relations. The agreement also contains an arbitration clause, which should guarantee the avoidance of double taxation.
One of the highlights of the re-negotiated treaty is the replacement of the Article on “Exchange of Information” with the new one reflecting the internationally accepted standard which is based on the OECD Model. The new Article on Exchange of Information will considerably expand the existing scope of information to be obtained on request basis for the enforcement of domestic tax laws.
It will also provide access to bank information for tax purposes and such information shall not be refused solely because the information is held by a bank or other financial institution. For this purpose, the Requesting State will be providing information to the Requested State such as the identity of the person under investigation and period of time for which the information is requested.
The Agreement was signed by the Ambassador of Switzerland, Marc George and Chairman, Federal Board of Revenue, Dr. Muhammad Irshad.
