Double taxation agreement with Pakistan enters into force

The new double taxation agreement (DTA) between Switzerland and Pakistan entered into force on 29 November 2018. It replaces the existing agreement between the two countries. The provisions of the agreement will be applied from 1 January 2019.

Switzerland and Pakistan signed the new DTA in Islamabad on 21 March 2017. It entered into force on 29 November 2018 after completion of the approval process in both contracting states. Among other things, the DTA contains improvements with regard to the taxation of service charges and profits resulting from the sale of significant interests. These rules promote economic exchange in bilateral relations between the countries. It additionally contains an arbitration clause, which should guarantee the avoidance of double taxation.

Moreover, the agreement contains a provision on the exchange of information in accordance with the international standard and an anti-abuse provision in accordance with the minimum standard as part of the BEPS project of the G20/OECD.

Press release of the Swiss Federal Government of 3 December 2018 – www.admin.ch