ISLAMABAD (July 20 2005): Pakistan and Switzerland on Tuesday signed a Convention for Avoidance of Double Taxation to promote trade and business activities between the two countries.
Central Board of Revenue (CBR) Chairman M. Abdullah Yusuf signed the convention on behalf of the Government of Pakistan and Ambassador of Swiss Confederation Denis Feldmeyer signed it on behalf of the Swiss Confederation.
Through the convention, Pakistan would benefit from sharing of tax on income from shipping business, immovable property, income from interest, royalties and fee for technical services and capital gains. Besides, income from business activities would be taxable at the place of permanent establishment.
The students and apprentices, etc, of any contracting state would be entitled for tax exemption for the purposes of maintenance and education. A Swiss entity would be given tax credit in Switzerland on the tax paid in Pakistan and vice versa.
These incentives would play a vital role in flow of investment towards Pakistan and generate a lot of commercial activities in the country, casting a positive effect on its economy. Besides, the convention will not only provide safeguard against double taxation on the income of the residents of both the countries, but also promote economic co-operation and would further strengthen the existing bilateral economic and trade relations between the two countries.
Yusuf expressed the hope that this convention would augment the already existing trade and economic relations between the two countries and open new avenues to the best interests of business communities of the contracting states.