ISLAMABAD, Feb 6: Pakistan and Jordan on Thursday signed a convention for the avoidance of double taxation between the two countries.

Central Board of Revenue (CBR) official spokesman, Vakil Ahmed Khan said that the convention was initialled after extensive deliberations.

“This will be an important step towards strengthening bilateral economic relations and promotion of investment,” he said.

The two sides exchanged the document initialled by member, direct taxes, Vakil Ahmed Khan and assistant director of the legal affairs of the income tax department of Jordan, Muhammad Falah Al-Sulman.

According to spokesman, the convention is subject to ratification by the government of both the countries.

The convention essentially emphasized the concept of taxation on income of international business transactions in the home country of the recipient.

Furthermore, measures have been taken to avoid double taxation of the same income, he said and added for this, a system of tax credit has been provided in the text of the agreement.

The spokesman said that the purpose of the agreement clearly defines the tax rules that would apply in case of cross border business transactions. Although Pakistan’s trade with Jordan was not significant, potential exists for its expansion and reciprocal investments.

He said that there is need for the exploration of new markets and avenues for investment.