ISLAMABAD, March 23: The government of Denmark is to ratify the protocol to the existing agreement for the avoidance of double taxation with Pakistan.

The Danish foreign minister is expected to visit Islamabad in the next month to formally sign the protocol with his Pakistani counterpart on the part of their respective governments, Vakil Ahmed Khan, CBR official spokesman and Member Direct Taxes told Dawn on Friday.

He, however, said if the Danish government ratified the protocol in the first week of the next month, then it is likely that during the forthcoming visit of the Danish foreign minister, the protocol will be signed.

Khan said that Pakistan has already ratified the protocol to the existing agreement.

Pakistan and Denmark had signed a protocol for the avoidance of double taxation between the two countries in 1963, but it was further amended in 1987, which was effective from 1998.

Under the new agreement, the revenue raised from Danish shipping companies in Pakistan will be taxed at a rate of 50 per cent. Moreover, the definition of tax bearing has also been improved under the new protocol, Khan added.

Elaborating further, Vakil said that this will be an important step towards strengthening bilateral economic relations and promotion of investment between the two countries.

He said that following the expiry of the confessional provisions of the existing convention in 1998, the business community of both the countries were facing hardships.