Taxation treaty: Pakistan, Austria sign additional protocol
Will allow both sides to seek bank information for tax purposes.
Signing of the protocol would facilitate the exchange of information and help ensure transparency in tax related matter. STOCK IMAGE
ISLAMABAD:
Pakistan and Austria on Tuesday signed an additional protocol to Avoidance of Double Taxation treaty of 2005 that will allow both countries to seek information for tax purposes about money deposited in each other’s banks.
The major difference between the 2005 original treaty that became effective a year later and the revised one is the adoption of updated Article 26 of the Model Tax Convention of the Organisation for Economic Cooperation and Development (OECD).
Federal Board of Revenue Chairman Tariq Bajwa and Austrian Ambassador Brigitta Blaha signed the document on behalf of their respective governments. Finance Minister Ishaq Dar witnessed the signing ceremony.
Signing of the protocol would facilitate the exchange of information and help ensure transparency in tax related matters, said officials from the finance ministry on Tuesday.
It added that transparency and exchange of tax information was now a rising concern in the changed international scenario where the world was moving towards the automatic exchange of information through OECD sponsored concerns like Global Forum and Multilateral Convention. Therefore, countries all over the world were updating their treaty regimes to make it compatible with the global standard on exchange of information.
According to the Article 26, competent authorities of contracting states will exchange such information as is foreseeably relevant for applying provisions of the Model Tax Convention or to the administration or enforcement of domestic laws concerning taxes of every kind and description imposed on behalf of the contracting states.
Furthermore, the contracting states cannot decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.
Article 26 will allow Pakistani authorities to seek information from Austrian banks. However, before seeking any information, the other country has to lodge a formal complaint and give evidence of avoidance of taxation.
Published in The Express Tribune, March 18th, 2015.
Pakistan and Austria on Tuesday signed an additional protocol to Avoidance of Double Taxation treaty of 2005 that will allow both countries to seek information for tax purposes about money deposited in each other’s banks.
The major difference between the 2005 original treaty that became effective a year later and the revised one is the adoption of updated Article 26 of the Model Tax Convention of the Organisation for Economic Cooperation and Development (OECD).
Federal Board of Revenue Chairman Tariq Bajwa and Austrian Ambassador Brigitta Blaha signed the document on behalf of their respective governments. Finance Minister Ishaq Dar witnessed the signing ceremony.
Signing of the protocol would facilitate the exchange of information and help ensure transparency in tax related matters, said officials from the finance ministry on Tuesday.
It added that transparency and exchange of tax information was now a rising concern in the changed international scenario where the world was moving towards the automatic exchange of information through OECD sponsored concerns like Global Forum and Multilateral Convention. Therefore, countries all over the world were updating their treaty regimes to make it compatible with the global standard on exchange of information.
According to the Article 26, competent authorities of contracting states will exchange such information as is foreseeably relevant for applying provisions of the Model Tax Convention or to the administration or enforcement of domestic laws concerning taxes of every kind and description imposed on behalf of the contracting states.
Furthermore, the contracting states cannot decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.
Article 26 will allow Pakistani authorities to seek information from Austrian banks. However, before seeking any information, the other country has to lodge a formal complaint and give evidence of avoidance of taxation.
Published in The Express Tribune, March 18th, 2015.