Pakistan and Bulgaria have enforced the convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income to be applicable from July 1, 2020.
The convention was signed on May 21, 2019 in Islamabad and now it has been enforced.
According to the SRO 323(I)/2020 issued by the Federal Board of Revenue (FBR) here on Thursday, the convention shall apply to taxes on income imposed on behalf of a Contracting State (Pakistan or Bulgaria) or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.
There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, as well as taxes on the total amounts of wages or salaries paid by enterprises.
The existing taxes to which the convention shall apply are in particular: in the case of Bulgaria, the convention would be applicable on personal income tax; corporate income tax and patent tax. In the case of Pakistan, convention would be applicable on income tax and super tax.
Under the convention, the income derived by a resident of a contracting state from immovable property (including income from agriculture or forestry) situated in the other contracting state may be taxed in that other state.
The competent authorities of Pakistan and Bulgaria shall exchange such information as is foreseeably relevant for carrying out the provisions of this convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the contracting states, or of their political subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the convention, it added.
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