ISLAMABAD: Pakistan and Germany have officially entered into negotiations to update and modernize their existing Agreement for the Elimination of Double Taxation, which covers Taxes on Income and the Prevention of Tax Evasion and Avoidance.
These negotiations took place in Islamabad, where delegations from both countries convened for the initial round of discussions from September 18th to September 22nd, 2023. After thorough consultations and mutual agreement on key provisions, the heads of the respective delegations initialed the first draft of the revised Agreement on September 22, 2023.
Federal Board of Revenue 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 with the Federal Republic of Germany. 1/3 pic.twitter.com/wTu0Dlz9si
— FBR (@FBRSpokesperson) September 26, 2023
It’s important to note that the existing Double Taxation Avoidance Agreement between Pakistan and Germany, which was originally signed in 1994, necessitates updating to align with the evolving international and domestic tax regulations. Once the revised Agreement is finalized, it will serve several crucial purposes. It will reinforce safeguards against double taxation for residents of both nations, ensuring that individuals and businesses are not unfairly burdened with multiple tax liabilities while preventing opportunities for tax evasion through exploitative schemes.
Tax Agreement to Boost Pakistan-Germany Trade Relations
Additionally, this updated Agreement will promote greater economic cooperation, enhance the already-existing bilateral economic relations, and encourage increased investments in both countries. Moreover, it will provide much-needed clarity and certainty regarding tax rules for cross-border business transactions, further facilitating trade and economic activities.
The Agreement will not only strengthen existing safeguards against double taxation on income of the residents of both the countries but will also promote bilateral economic cooperation and enhance investments between the two countries. 3/3 pic.twitter.com/9emymttel1
— FBR (@FBRSpokesperson) September 26, 2023
Ultimately, this development will benefit taxpayers in both Pakistan and Germany by relieving them of the burden of double taxation, thereby fostering increased trading activities and economic growth in both nations.
