ISLAMABAD: The Federal Board of Revenue (FBR) said in a statement on Wednesday that the exchange of information between Pakistan and Hungary under the new version of income tax evasion and prevention of financial theft. The agreement has been signed.
The Protocol was signed by the Hungarian Ambassador to Pakistan Astvan Shazbo on behalf of the Hungarian Government, while Dr. Muhammad Ashfaq Ahmed, Member (Inland Revenue Operations) / Additional Secretary signed it on behalf of Pakistan.
Article 27 of the Convention deals with the exchange of information. The Organization for Economic Co-operation and Development (OECD) approved changes to the Information on Exchange Article in July 2012 to include provisions on co-operation between the tax administrations of the two treaty states.
The present article sets out the rules under which information can be exchanged as much as possible to include taxes other than income tax.
Therefore, in order to incorporate the latest standards of administrative assistance in the current Convention, Pakistan and Hungary decided to replace the Article of Exchange of Information with a new version of the Protocol.
The new article on the exchange of information provides that the competent authorities of the treaty states will exchange information which is not bound by Articles 1 and 2 of the Convention and no state will refuse to provide information for this reason alone. Will not be interested in the existence of such information, or because the information is in the possession of a bank, other financial institution or agent or a person or person working in a person or agency.
According to the new version of the article, the contracting states will exchange information on request that is explicitly relevant to the implementation of the provisions of the Convention or the administration or enforcement of the requesting state’s domestic tax laws.