ISLAMABAD: Federal Board of Revenue (FBR) has warned that all territories where Pakistani citizens have stashed their money are in its ‘radar’.
A top FBR official, while talking to Customs Today, said that the FBR is taking all possible measures to obtain information about the Pakistani nationals’ assets in other countries and the money kept in Swiss banks.
Upon receipt of actionable tax information about Pakistani tax resident persons, if the funds remitted out to Switzerland are found to be unexplained, tax demand could be raised that is recoverable against the assets located in Switzerland under Article 11 of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (Multilateral Convention).
It is important to mention here that both Pakistan and Switzerland are signatories to the Multilateral Convention along with 126 jurisdictions, which is an OECD initiative, geared to combating, tax evasion through Exchange of Information amongst signatory states. Pakistan under Article 5 of the Multilateral Convention can seek information from Switzerland about Pakistanis who may have stashed funds therein.
He disclosed that FBR has successfully renegotiated the Avoidance of Double Taxation Agreement (ADTA) with Switzerland which, inter alia, contains the Article on exchange of information on request for tax purposes.
This article has recently been renegotiated and updated with Switzerland on the basis of the latest OECD/UN Models which extends its scope beyond the information available with tax administration in normal course of business.
Briefly, the new Article 26 of the OECD Model Tax Convention provides that the Contracting States shall exchange information and no state shall decline to provide information merely for the reason that such information is of no interest to it, or because the information is held by a bank or other financial institution. According to the new version of the Article, the Contracting