An arbitration clause is included in the new tax treaty to resolve double taxation disputes.
A new tax treaty between Switzerland and Pakistan will be effective from January 1, 2019.
The tax treaty contains improvements relating 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.
An arbitration clause is included in the new tax treaty to resolve double taxation disputes.
The tax treaty also contains an anti-abuse clause in line with the minimum standard agreed under Action 6 of OECD’s base erosion and profit shifting project, and a provision on exchange of tax-related information in line with international standards.
The new tax treaty was signed in March 2017, and entered into force on November 29, 2018. It replaces the existing tax treaty between Switzerland and Pakistan.
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