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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Peer Review Report Phase 1 Legal and Regulatory Framework - Pakistan

This report for Pakistan has been published on 3 Aug 2015. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Information on settlors and beneficiaries of foreign trusts operated by Pakistan resident trustees may not be available in all cases as foreign trusts are not covered by obligations under Pakistan’s trusts law ensuring that trustees are required to keep identification of settlors and beneficiaries.  Pakistan should ensure that information is available to their competent authority that identifies the settlor and beneficiaries of foreign trusts having a trustee resident in Pakistan. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Tax authority’s access and compulsory powers are primarily granted for domestic tax purposes. Their application in cases where there is no domestic tax at stake is based on treaty prevails rule which covers only agreements for avoidance of double taxation.  Pakistan should ensure that it can obtain and provide information requested under exchange of information agreements regardless of their form. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.   Out of Pakistan’s 65 EOI agreements four do not meet the international standard and only one contains OECD model wording including Articles 26(4) and 26(5).  Pakistan should continue to renegotiate its older treaties and bring all of them in line with the international standard. 
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.   Domestic restrictions in giving full effect to EOI agreements providing solely for administrative assistance may have negative impact on Pakistan’s ability to conclude EOI agreements regardless of their form with all relevant partners who are interested in entering into such agreement.  Pakistan should continue to develop its network of EOI mechanisms (regardless of their form) with all relevant partners. 
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.   A small number of Pakistan’s DTCs may allow disclosure of exchanged information which goes beyond the standard.  Pakistan should ensure that all of its agreements meet the standard concerning confidentiality of information received.  
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.