ISLAMABAD, Oct 15: Pakistan and Switzerland on Tuesday signed the revised convention on the avoidance of double taxation between the two countries.

Member direct taxes, Vakil Ahmed Khan said that the convention was initialled after extensive deliberations by tax experts of both the countries.

This will be an important step towards strengthening bilateral economic relations and promotions of investment between the two countries, said the spokesman.

The two countries had already held seven round of talks to develop consensus on some articles to conclude the revised agreement of the double taxation, which was finally resolved in the eighth round of face to face talks held here in Islamabad.

Mr. Khan said that re-negotiation of operative tax agreements was not an unusual phenomenon. It was part of updating existing agreements in view of fast changing business environment all over the world. That was why many operative tax treaties have already been revised and the process was going on, he added.

The convention for avoidance of double taxation between Pakistan and Switzerland was concluded in the late 50s and made operative in October 1960. It was subsequently modified in respect of some of the provisions through a supplementary protocol in 1964.

The convention essentially emphasizes the concept of taxation of income of international business transaction in the home country of the recipient, the spokesman said.

The two countries exchanged the documents signed by deputy head of the division for international fiscal law and double taxation matters of federal tax administration of Switzerland, Eric Hess and Vakil Ahmed Khan, member, direct taxes.