In a bid to clamp down on offshore tax dodgers, Pakistan has signed OECD’s multilateral convention on mutual administrative assistance in tax matters.
Pakistan is the 104th jurisdiction to sign the convention, which was developed by the OECD and the Council of Europe in 1988.
The convention was amended in 2010 to align it to the international standard on information exchange and open it to all countries as demanded by the G20 countries.
The convention supports various forms of administrative assistance in tax matters such as information exchange on request, automatic exchange, tax examinations abroad, simultaneous tax examinations, assistance in tax collection, as well as safeguards protection of taxpayers’ rights.
Signatories to the convention implement the standard for automatic exchange of financial account information in tax matters.
The standard, developed by the OECD and G20 countries, requires jurisdictions to get information from their financial institutions and automatically share that information with other jurisdictions every year.
The convention also requires the country to implement automatic exchange of country-by-country reports under the base erosion and profit shifting (BEPS) norms endorsed by OECD/G20.