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Italy

GOVERNMENT OF PAKISTAN
MINISTRY OF FINANCE AND ECONOMIC AFFAIRS
(Revenue Division)
NOTIFICATION
Islamabad, the 12th January, 1981

INCOME TAX

S.R.O. 37(I)/81, dated the 12th January, 1981. - WHEREAS the annexed Agreement between the Islamic Republic of Pakistan and the Government of the Republic of Italy for the avoidance of double taxation on income of maritime and air transport enterprises has been made.

NOW, THEREFORE, in exercise of the powers conferred by section 163 of the Income Tax Ordinance, 1979 (XXXI of 1979), the Federal Government is pleased to direct that all the provisions of the said Agreement shall be given effect to in Pakistan.

Annexure

AGREEMENT BETWEEN
THE REPUBLIC OF ITALY AND THE ISLAMIC REPUBLIC OF PAKISTAN
FOR THE AVOIDANCE OF DOUBLE TAXATION ON INCOME OF
MARITIME AND AIR TRANSPORT ENTERPRISES.

The Government of the Republic of Italy and the Government of the Islamic Republic of Pakistan desiring to conclude an agreement for the avoidance of double taxation with respect to taxes on income derived from the exercise of maritime and air navigation in international traffic have agreed as follows:-

ARTICLE 1

For the purposes of this Agreement:

1. The expression "exercise of maritime and air navigation" means the professional activity of transportation by sea and air of persons, animals, goods and mail through proprietors, conductors, charterers and shipowners or operators of ships or aircraft, including the sale of passage tickets and similar documents for such transportation and any other activity directly incidental thereto.

2. The expression "international traffic" means any transport by a ship or an aircraft operated by a Pakistan or an Italian enterprise, except when the ship or the aircraft is operated solely between places situated in the territory of the Islamic Republic of Pakistan or of the Republic of Italy.

3. The expression "Pakistan enterprises" means the Pakistan State enterprises, the Pakistan public entities either national or local, and all individuals, resident for all fiscal purposes in Pakistan and not resident in Italy, as well as corporations, Partnerships and associations constituted according to the Pakistan law and having their place of effective management in the Pakistan territory.

4. The expression "Italian enterprises" means the Italian State enterprises, the Italian public entities either national or local, and all individuals, resident for all fiscal purposes in Italy and not resident in Pakistan, as well as corporations, partnerships and associations constituted according to the Italian law and having their place of effective management in the Italian territory.

ARTICLE 2

1. The Government of the Islamic Republic of Pakistan hereby undertakes to exempt the income derived from the exercise of maritime and air navigation in international traffic performed by Italian enterprises engaged in such activities, from the income-taxes and any other imposition levied on taxable income in Pakistan.

2. The Government of the Republic of Italy hereby undertakes to exempt the income derived from the exercise of maritime and air navigation in international traffic performed by Pakistan enterprises engaged in such activities, from the income-taxes and any other imposition levied on taxable income in Italy.

3. The fiscal exemption foreseen in the previous paragraphs I and 2 shall also apply in favour of the Pakistan and Italian maritime and air transport enterprises participating in pooled services, in joint sea and air transport operations and in other international operating agencies, but limited to the income concerning the said enterprises.

ARTICLE 3

1. This Agreement shall be ratified and the instruments of ratification shall be exchanged at Islamabad as soon as possible.

2. The Agreement shall enter into force upon the exchange of instruments or ratification and its provisions shall have effect in respect of income derived as on January 1st, 1970.

ARTICLE 4

This Agreement shall continue in effect indefinitely and may be denounced by either of the two Governments by giving six months' notice in writing. In such event it shall cease to be effective on the first day of January of the year following that of the expiry date of the notice.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this Agreement and have affixed thereto their seals.

DONE at Rome on the 8th day of June, 1978 in the Italian and English language both texts being equally authoritative.

ABDUL WAHEED
Joint Secretary.

C. No. 2(14) TL/60

Published in the Gazette of Pakistan, Extraordinary, Part II, dated 12-01-1981.

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