ISLAMABAD (APP) - Pakistan and Morocco ratified the agreement for the 'Avoidance of Double Taxation and Prevention of Fiscal Evasion which was signed between the two countries in May 2006 in Rabat, Morocco with an aim to promote bilateral trade and commerce. The ceremony for exchange of instrument of ratification was held at FBR house here on Thursday where the Ambassador of Morocco to Pakistan, Mohammad Rida El-Fassi and Chairman Federal Board of Revenue, Sohail Ahmad represented their respective countries. The 'Avoidance of Double Taxation and Prevention of Fiscal Evasion agreement would be effective from October 8, 2009. According to the document, double taxation of income tax has been eliminated between the two states to promote inter-state trade and commerce. It also laid down principle for taxation of all sources of income. The agreement has settled the principle for determination of residential status of individuals and corporate entities besides exempting tax from the funds received by students for the purpose of education. The agreement comprehensively provides for cooperation in all important areas of international taxation including exchange of information. Speaking on the occasion, Chairman FBR, Sohail Ahmad highlighted the importance of the agreement and expressed the hope that this would help enhance bilateral trade relations. He observed that it would not only provide safeguards against double taxation on the income of the residents of both the countries but would also promote economic cooperation, investment and would further strengthen the existing economic relations between the two countries. He said that the agreement would create a conducive atmosphere for trading and investment in the two countries by ensuring certainty of tax treatment. On the occasion, Moroccan Ambassador expressed the hope that the new agreement would be significant step in improving economic relations between the two brotherly countries. Later, talking to newsmen, FBR Spokesman and Member Direct Tax Policy, Asrar Raouf said that Value Added Tax would be introduced in July 2010. He said that all the stakeholders would be taken into confidence before its implementation adding that specialist teams of the board would visit South Africa and India to study their VAT systems and seek their relevance for Pakistan. To a question about audit, he said that the board has already signed Memorandum of Understanding with ICAP adding that chartered accounts would be outsourced to conduct the audit, however added that the internal audit would be done by the board officials.