Pakistan signs multilateral convention on tax co-operation

Pakistan has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC), which is seen as the most powerful instrument against offshore tax evasion and avoidance

With this move, Pakistan has become the 104th jurisdiction to join the convention, which is seen as ‘gold standard’ for co-operation in tax administration.

Pakistan Finance Minister Mohammad Ishaq Dar signed the MAC at the OECD Headquarters in Paris on September 14 in the presence of OECD Secretary-General Angel Gurría.

By signing MAC, Pakistan — which is a member of BEPS inclusive framework — will exchange automatically country-by-country reporting as required by Action 13 of the Base Erosion and Profit Shifting (BEPS) package.

MAC was developed jointly by the OECD and the Council of Europe in 1988 and amended in 2010 to respond to the call by the G20 to align it to the international standard on exchange of information and to open it to all countries, thus ensuring that developing countries could benefit from the new more transparent environment.

Since then, the Convention has become a truly global instrument. It is seen as the ideal instrument for swift implementation of the new Standard for Automatic Exchange of Financial Account Information in Tax Matters developed by the OECD and G20 countries as well as automatic exchange of country by country reports under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project and is a powerful tool in the fight against illicit financial flows.

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