ISLAMABAD, Sept 11: Pakistan and Vietnam on Thursday signed an agreement for avoidance of double taxation between the two countries.

The two sides exchanged the document initialled by Pakistan’s Member Direct Taxes, CBR, Vakil Ahmad Khan and Deputy Director of the International Taxation of Vietnam, Nguyen Duc Thinh here on Thursday at Central Board of Revenue.

According to an official announcement, the proposed 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 would apply in case of cross-border business transactions. Although, Pakistan’s trade with Vietnam at present was not much, there still exists considerable potential for its expansion and reciprocal investments.

The agreement would be an important step towards strengthening bilateral economic relations and promotion of investment. Thus it would be beneficial for the business communities of both the Asian countries.

Vakil welcomed the Vietnamese delegation and briefed them on the tax system of Pakistan, its economy and agreements for avoidance of double taxation that Islamabad had signed with other countries so far.

The deputy director of Vietnamese delegation also thanked members of the Pakistan delegation for their warm welcome.