ISLAMABAD: Pakistan and Hungary on Tuesday signed a protocol for the exchange of information with respect to all taxes.

Hungary’s Ambassador to Pakistan Istvan Szabo and FBR Member Inland Revenue Operation Dr Ashfaq Ahmed signed the article on behalf of their respective governments.

The new article on exchange of information provides that competent authorities of the contracting states should exchange such information that will not be restricted by Article 1 & 2 of the Organisation for Economic Cooperation and Development (OECD) Model Tax Convention. No state should decline to provide information merely for the reason that such information is of no interest to it, or because the information is held by a bank, other financial institution, or nominee or a person acting in an agency or fiduciary capacity.

According to the new version of the Article, the contracting states should exchange such information on request as is foreseeably relevant for carrying out of provisions of the convention or to the administration or enforcement of the domestic tax laws of the requesting state.

Article 27 of the Convention deals with Exchange of Information. The OECD approved changes in the Article on Exchange of Information in July 2012 to include provisions concerning cooperation between the tax administrations of the two contracting states.

The present article embodies the rules under which information may be exchanged to the widest possible extent to include taxes other than the income tax. Therefore, to incorporate the latest standard of administrative assistance in the extant Convention, Pakistan and Hungary decided to replace the Article on Exchange of Information with the new version through Protocol.

Published in Dawn, July 15th, 2020