This blog is written by Mr. Atif Jan, Associate Taxation and Corporate Services. Please read this blog and provide your valued comments.

Agreements for the Avoidance of Double Taxation & Prevention of Fiscal Evasion Section (107)

For the purpose of this section the Federal Government may enter into a tax treaty with other Governments for exchange of information for avoidance of double taxation or for prevention of fiscal evasion.

This Agreement shall apply to persons who are residents of one or both of the territories.

This Agreement shall apply to taxes on income imposed in each territory irrespective of the manner in which they are levied.

The existing taxes which are the subject of this agreement are taxes on income as specified in the Exchange of Letters.

This Agreement shall also apply to any other taxes of a substantially similar character which are subsequently imposed in addition to or in place of the existing taxes.

If by reason of changes made in the taxation law of either territory, it seems desirable to amend any article of this Agreement without affecting the general principles thereof the necessary amendments may be made by mutual consent by means of an exchange of letters.

Where any agreement is made the agreement and the provisions made by notification for implementing the agreement shall, notwithstanding anything contained in any law for the time being in force, have effect in so far as they provide for at least one of the following:-

(a) Relief from the tax payable under this Ordinance.

(b) The determination of the Pakistan-source income of non-resident persons.

(c) Where all the operations of a business are not carried on within Pakistan, the determination of the income attributable to operations carried on within and outside Pakistan, or the income chargeable to tax in Pakistan in the hands of non-resident persons, including their agents, branches, and permanent establishments in Pakistan.

(d) The determination of the income to be attributed to any resident person having a special relationship with a non-resident person.

(e) The exchange of information for the prevention of fiscal evasion or avoidance of taxes on income chargeable under this Ordinance and under the corresponding laws in force in that other country.

Atif Jan