ISLAMABAD, Dec 3: The government of Germany has granted exemption from payment of value added tax (VAT) to Pakistani traders visiting Germany for business purposes.

The VAT exemption would also apply to business community and government organisations participating in fairs and exhibitions in Germany.

According to a notification issued by the German government, received through Pakistan Embassy in Berlin, the decision of VAT refund would apply with effect retrospectively from July 1, 2008.

Hence the VAT paid from that date could be claimed as refund by the businessmen who visited Germany for business or for participation in fairs and exhibitions.

An official statement of the commerce ministry said Pakistan is participating in a large number of fairs and exhibitions in Germany every year and the VAT paid at the rate of 19 per cent would now be refundable resulting into enormous savings for the business community and the government organisations on account of their participations in fairs.

According to this decision, Pakistani business community is now not required to pay VAT for purchase of goods and services during their stay in Germany for business purposes.

The decision of the German government would help further boost trade relations between the two countries by the increased participation in trade related activities, added the announcement.