ISLAMABAD: Pakistan and Germany on Tuesday signed the first draft of an agreement for the elimination of double taxation on income and the prevention of tax evasion between the two countries.

The delegates of both countries met here for the first round from Sept 18-22 to reach broader parameters of the re-negotiations of the treaty.

An official announcement said that the Federal Board of Revenue (FBR) initiated re-negotiations on the agreement and reached a mutual agreement on key articles of the draft agreement.

The existing agreement for the avoidance of double taxation between Pakistan and Germany was signed in 1994 and requires revision to cater to changing tax rules and regulations as per international and domestic needs.

The revised agreement once finalised will not only strengthen the existing safeguards against double taxation on the income of the residents of both countries without creating opportunities for non-taxation or reduced taxation through abusive arrangements.

It will also promote economic cooperation, strengthen the existing bilateral economic relations and enhance investments in both countries while ensuring adequate certainty for taxation rules applicable to cross-border business transactions.

Taxpayers of both countries will get relief from double taxation resulting in boosting the trading activities in both countries.

Published in Dawn, September 27th, 2023