Pakistan and Hungary has signed a Convention for the Avoidance of double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income. The Article 27 of the Convention deals with Exchange of Information under Organization for Economic Cooperation and Development (OECD) approved changes in the Article on Exchange of Information in July 2012 to include provisions concerning cooperation between the tax administrations of the two Contracting States. The present article embodies the rules under which information may be exchanged to the widest possible extent to include taxes other than the income tax. Therefore, to incorporate the latest standard of administrative assistance in the extant Convention, Pakistan and Hungary decided to replace the Article on Exchange of Information with the new version through Protocol.

The Protocol was has been signed at the FBR House, Islamabad. Hungarian Ambassador to Pakistan Istvan Szabo signed the Protocol on behalf of Government of Hungary, while Dr. Muhammad Ashfaq Ahmed, Member (Inland Revenue Operations)/Additional Secretary inked it on behalf of Pakistan.

The new Article on exchange of information provides that the competent authorities of the Contracting States shall exchange such information that will not be restricted by Article 1 & 2 of the Convention 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, other financial institution or nominee or a person acting in an agency or fiduciary capacity. According to the new version of the Article, the Contracting States shall exchange such information on request as is foreseeable relevant for carrying out of provisions of the Convention or to the administration or enforcement of the domestic tax laws of the requesting state.

“The aim of the Protocol amending the Tax Convention is to improve the bilateral exchange mechanism of information in accordance with international standards,” the Hungarian Embassy said. It hoped that the next step in this forward-looking process could be the signature of the Agreement for Promotion and Reciprocal Protection of Investments.

The investment protection treaty would have utmost importance for MOL Pakistan, the Pakistani subsidiary of the Hungarian MOL Group, which has been operating in Pakistan for twenty years. The company employs 400 Pakistanis, provides 14 per cent of the country’s electricity need and it is among the 50 largest taxpayers in Pakistan. Since MOL Pakistan was founded in 1999, it has proved its commitment to the people of Pakistan. The company has invested $12.9 million for the development of the Pakistani society through its different corporate social responsibility programmes.

Meanwhile, the All Pakistan Business Forum (APBF) has signed a memorandum of understanding (MoU) with the Hungarian Export Promotion Agency (HEPA) to promote trade links through exchanges of business delegations to nurture closer understanding between Pakistan and Hungary.

The All Pakistan Business Forum president Syed Maaz Mahmood inked the MoU on behalf of his association while HEPA CEO Balázs Hendrich represented his agency. The APBF office-bearers who witnessed the signing ceremony included Khurram Niaz Khan, Amir Munir Malik, Amir Barry while Hungarian embassy officials consisted of Ambassador István Szabó, Deputy Head of Mission Tivadar Takács and Dr. István Grafjódi.

APBF president Syed Maaz Mahmood, addressing the ceremony, said the Forum will extend full cooperation and support to strengthen trade and economic ties between Pakistan and Hungary. He said that the Forum through the Hungarian Embassy will arrange B2B meetings, conducting business delegation visits for sector specific match-making and interaction between development initiatives and the stakeholders.

He said that APBF is striving to bring business leaders, chambers and trade associations on a united platform to endeavor for a Pakistan with sustainable growth. On this occasion, Ambassador of Hungary István Szabó called for creating a trilateral trade bloc of Pakistan, Hungary and Turkey with a view to eliminate barriers to investment among these nations, besides exploiting huge trade potential. He appreciated the efforts of APBF to promote bilateral trade and joint ventures between business community of Pakistan and Hungary. He said that the serious and result oriented work of APBF convinced him to get HEPA engaged with APBF to bring the business communities of the two countries closer.

Both sides agreed to boost bilateral trade and investment through proactive approach and improved engagement.

He said that the Embassy of Hungary in Islamabad has been working on strengthening economic ties with Pakistan and the two countries also signed an Economic Cooperation Agreement in 2017, which laid down the framework of the further cooperation. Based on that, organizing the first session of Joint Economic Commission in the Hungary in Sept 2019 was another milestone of the deepening relations.

He said that the Hungarian Embassy in cooperation with the Pakistan Ministry of Commerce and All Pakistan Business Forum was going to organize a bilateral Business Forum in Lahore but it was postponed due to coronavirus.