July 14, 2006	Friday	Jumadi-ul-Sani 17, 1427

ISLAMABAD, July 13: The Central Board of Revenue (CBR) has issued new income tax rules for application of initiation of mutual agreement procedure (MAP) to facilitate Pakistani nationals residing abroad in case of having any complain against the host country taxation authority.

The new rules 19A were notified through an income tax notification SRO714 of 2006 issued here on Thursday by amending the Income Tax Rules 2002, which could only be applied in case of those countries with home Pakistan has signed an agreement for the avoidance of double taxation.

The CBR has also prescribed a form in this connection to make an application to the CBR seeking to invoke the provision of the MAP, if any, provided therein, in the Form prescribed in rule 19C. The application would be processed following having satisfaction that the taxpayer has reasonable grounds to justify CBR assistance; the application has been made within two years from the date of notification of the cause of grievance; and the double taxation or other impending grievance is more than a mere possibility; shall cause to take up the matter with the Competent Authority of the country concerned and endeavour to resolve the matter through consultative measures.

In case the CBR decides not to intervene in the matter, it will inform the taxpayer applicant, within 30 days of the receipt of the application, of its decision and grounds thereof in writing.

If during the course of mutual agreement proceedings, the competent authority of the other country requires any clarification, verification of facts, or guarantees, that shall be communicated to the applicant taxpayer, and after the receipt of the same shall be passed on to the competent authority of the other country.

At any time, if the terms and conditions of the impending resolution are not satisfactory to the taxpayer, he may withdraw from the MAP proceedings and pursue any right of appeal under the normal course available.

The CBR would communicate the outcome of the MAP proceedings taken up with the other country to the applicant taxpayer in writing.

Almost a similar kind of rules were notified through the same notification as 19B for taking action on an application received through the competent authority of a treaty partner country.

Where a reference is received from the competent authority of a country outside Pakistan under an agreement with that country with regard to any action taken by any income-tax authority in Pakistan, the CBR shall call for a report from the Commissioner concerned and, if required, examine the relevant records, and shall endeavour to arrive at a resolution of the case on unilateral basis in terms of the liberal interpretation of the legal provisions applicable.

But certain conditions were also notified in case of which no action would be taken on complaint received from the other country.