PRESS RELEASE

Revision of Income Tax Treaty between Japan and Pakistan

 

PRESS RELEASE N0: 08-005

                                                          Islamabad: 23rd January, 2008           

    Japan and Pakistan have signed a new treaty between the two countries for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. The old treaty was signed in 1959.

    This new bilateral treaty was signed between His Excellency Mr. Seiji Kojima, Ambassador of Japan to Pakistan and Mr. Abdullah Yusuf, Secretary General, Revenue Division, Government of Pakistan, in Islamabad today.

    The new treaty, based on the international model income tax treaty, modernizes the regulations of the existing treaty with a view to positively promoting mutual investment. The new treaty revises the taxation formula for business income and royalties paid between the two countries.

    Ambassador Kojima speaking on the occasion said that this treaty is a significant step in facilitating competitiveness of the Japanese and Pakistani companies and incorporating the bilateral taxation relations between the two countries into a modern tax treaty network of the world. The revision of the existing treaty, on the other hand, reflects the close economic relations between the two countries. He said that this updated agreement is important for the future economic relations between the two countries and that it is of benefit to these business activities in the light of the Pakistan’s pivotal role as a gateway to Central Asia and the Middle East.

    The new agreement will minimise a number of major disincentives to the expansion of international trade and investment between Japan and Pakistan by clearly allocating tax jurisdictions between the two contracting parties.

    Ambassador Kojima expressed a hope that this agreement would surely strengthen the bilateral relationship between Japan and Pakistan in the long term, as it would provide safeguards against double taxation on the income of the residents of both countries, thus promoting economic cooperation and investment between the two countries. (End)