PRESS RELEASE N0: JPNEMPAK 08-032           

Islamabad: 10th October, 2008

His Excellency Mr. Chihiro Atsumi, Ambassador of Japan to Pakistan and Mr. Irfan Nadeem, Member Direct Tax, Revenue Division, Government of Pakistan, have exchanged Notes to enter into force a new Convention between Japan and Pakistan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income signed on January 23rd,, 2008, in Islamabad today.

This new Convention, which will enter into force on November 9th 2008, modernizes the regulations of the existing Convention signed in 1959 with a view to positively promoting mutual investment between Japan and Pakistan. Based on the international model income tax treaty, the new Convention revises the taxation formula for business income and royalties paid in the respective countries and contains extensive revisions of the existing convention for the first time in forty-nine years.

Ambassador Atsumi, speaking on the occasion, said that this Convention 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 Convention framework. Ambassador Atsumi also said that this updated Convention is significant in light of Pakistan’s pivotal role as a gateway to Central Asia and the Middle East. The new Convention will minimise a number of major disincentives presented to the expansion of international trade and investment between Japan and Pakistan by defining tax jurisdictions between the contracting parties.

Ambassador Atsumi expressed hope that this Convention would strengthen the long term bilateral relationship between Japan and Pakistan, providing safeguards against double taxation on the income of the residents of the respective countries, thus promoting economic cooperation and investment between the two countries. (End)