The Federal Board of Revenue (FBR) has placed the revised notification on Avoidance of Double Taxation between Pakistan and Switzerland, which will allow both sides (exchange of information) to access banking/financial information.
According to the media reports, FBR issued Statutory Regulatory Order SRO 187(I)/2019 on Monday. The updated convention on Avoidance of Double Taxation between Pakistan and Switzerland contains amended Article 25 (exchange of information) having more detailed procedure for accessing financial information between the two countries.
In light of Article 25, the exchange of information will be applicable for information concerning facts that relate to any fiscal year beginning on or after the first day of January of the year following the date of signature of the Convention, it added.
As per the revised notification issued by the FBR, in no case shall the provisions of agreement be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.
The provisions of the said notification shall come into force from November 29, 2018 and shall have effect in Pakistan for any fiscal year beginning on or after July 01 of the calendar year.
Recently, Minister of State for Revenue Muhammad Hammad Azhar said that the government is seeking foreign bank accounts’ data of Pakistanis from 10 more foreign tax jurisdictions, including Switzerland, under the Organisation for Economic Cooperation and Development (OECD) arrangement.
The Swiss government is cooperating with the Pakistani tax authorities and Federal Board of Revenue (FBR) has already ratified the convention on the avoidance of double taxation between the two countries, he said.
Hammad said, “We have made requests to 10 more countries for getting an automatic exchange of information as so far we have received details about 150,000 bank accounts from 29 jurisdictions under Organisation for Economic Cooperation and Development (OECD) treaty. We have also made another request to Switzerland for sharing of exchange of information in January (last month) and they are willing to share data but so far it has not yet been operationalized.”
The exchange of information will only be requested once the requesting contract state has exhausted all regular sources of information available under the internal taxation procedure.