The booklet entitled 'Saarc Limited Multilateral Agreement on Avoidance of Double Taxation and Mutual Administrative Assistance in Tax Matters' will provide for proper implementation of the convention. The Central Board of Revenue (CBR) has issued SRO 1264(I)/2006 for its implementation among Saarc member states.
According to the notification, the convention was inked among the Saarc member states on November 13, 2005. Now, the CBR has notified that provisions of the said agreement shall have effect in Pakistan pertaining to taxes withheld at source, regarding amounts paid or credited and other taxes. The agreement would also take effect in respect of tax years beginning on or after July 1, next, following the date upon which the agreement enters into force.
Under the convention, following are country-wise existing taxes to which this agreement shall apply: In Bangladesh, convention would apply on taxes on income that is direct tax;
Bhutan, income Tax imposed under Income Tax Act 2001 and the rules thereof;
India, income tax, including any surcharge thereon; Maldives, taxes on income that is direct tax Nepal, Income Tax imposed under the Income Tax Act, 2058; Pakistan, taxes on income and in case of Sri Lanka, convention would apply on income tax including the income tax based on the turnover of enterprises licensed by the Board of Investment.
Under the agreement, authorities of the member states shall exchange information, including documents and public documents or certified copies thereof, as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the member states concerning taxes covered by this agreement insofar as the taxation thereunder is not contrary to the Agreement.
Any information received by a member state shall be treated as secret in the same manner as information obtained under the domestic laws of that member state and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes covered by the agreement. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions, the notification said.