ISLAMABAD, Oct 11: Pakistan and Yemen have inked an agreement on the avoidance of double taxation between the two countries to promote bilateral trade.

The agreement was signed in Sana on October 8 following extensive deliberations between the two sides in Yemen from October 5 to 8, said the CBR official spokesman here on Saturday.

The Yemeni delegation was led by Mahfood Omer Bin Shuaib, assistant deputy chairman, Tax Authority of Yemen, while the Pakistani side was represented by member direct taxes Vakil Ahmad Khan.

Mr Khan told reporters that the agreement essentially emphasized the concept of taxation on income of international business transactions in the home country of the recipient. It clearly defines the tax rules that will apply in case of cross-border business transactions, he added.

Although Pakistan’s trade with Yemen at present is not much, there still exists considerable potential for its expansion and reciprocal investments.

The agreement will be an important step towards strengthening bilateral economic relations between the two Muslim countries.

The delegation visited field formations at Aden and Taiz to have an understanding about the working of Yemeni tax department at grass-roots level.