A double taxation treaty (DTT) is an agreement between two countries that aims to avoid double taxation of income earned by residents of one country in the other country. DTTs typically provide for the reduction or elimination of withholding taxes on dividends, interest, and royalties, and they may also provide for the exemption of certain types of income from taxation altogether.
Pakistan has a network of DTTs with over 66 countries. These treaties provide relief from double taxation for residents of both Pakistan and the other country. The treaties typically cover the following taxes:
- Income tax
- Corporate tax
- Withholding tax
The benefits of a DTT
There are a number of benefits to having a DTT in place. For businesses, DTTs can help to reduce their tax liability and make it easier to do business in other countries. For individuals, DTTs can help to ensure that they are not taxed twice on their income.
The following is a list of the DTTs that Pakistan has entered into:
- Afghanistan
- Algeria
- Argentina
- Australia
- Austria
- Bahrain
- Bangladesh
- Belgium
- Bosnia and Herzegovina
- Brazil
- Brunei
- Bulgaria
- Canada
- China
- Colombia
- Croatia
- Cyprus
- Czech Republic
- Denmark
- Egypt
- Emirates
- Ethiopia
- Finland
- France
- Germany
- Ghana
- Greece
- Hungary
- India
- Indonesia
- Iran
- Iraq
- Ireland
- Italy
- Jamaica
- Japan
- Jordan
- Kazakhstan
- Kuwait
- Kyrgyzstan
- Lebanon
- Libya
- Malaysia
- Mauritius
- Mexico
- Mongolia
- Morocco
- Myanmar
- Netherlands
- New Zealand
- Norway
- Oman
- Pakistan
- Qatar
- Romania
- Russia
- Saudi Arabia
- Serbia
- Singapore
- Slovakia
- South Africa
- South Korea
- Spain
- Sri Lanka
- Sweden
- Switzerland
- Syria
- Tajikistan
- Thailand
- Tunisia
- Türkiye
- Turkmenistan
- Uganda
- Ukraine
- United Arab Emirates
- United Kingdom
- United States
- Uzbekistan
- Vietnam
- Yemen
Conclusion
DTTs are an important tool for businesses and individuals who want to avoid double taxation. If you are considering doing business in another country, it is important to check to see if Pakistan has a DTT with that country.
