The third protocol to the agreement between the Government of the people"s Republic of China and the Government of the Islamic Republic of Pakistan for the Avoidance of Double Taxation and the prevention of fiscal evasion with respect to taxes on income.

(TO BE PUBLISHED IN THE GAZETTE OF PAKISTAN - EXTRAORDINARY PART.I) GOVERNMENT OF PAKISTAN REVENUE DIVISION Islamabad, the February 16, 2017 N O T I F I C A T I O N Income Tax S.R.O. 145(I)/2017.- WHEREAS the Third Protocol as set out in the Annexure to this Notification to amend the Agreement between the Government of the People’s Republic of China and the Government of the Islamic Republic of Pakistan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed at Islamabad on November 15, 1989, hereinafter referred to as the Agreement, as well as the Second Protocol to the Agreement, signed at Beijing on the April 17, 2007,hereinafter referred to as the Second Protocol; Whereas, in terms of Article 2 of the Third Protocol, the contracting States shall notify each other through diplomatic channels that the procedures required by its laws for the entry into force have been complied with. This Third Protocol shall enter into force on the date of the receipt of the later notification; NOW, THEREFORE, in exercise of the powers conferred by sub-section (1) of section 107 of the Income Tax Ordinance, 2001 (XLIX of 2001), the Federal Government is pleased to direct that the provisions of the Third Protocol, shall have effect: “For the provisions of Article 1 of the Second Protocol, the Industrial and Commercial Bank of China and the Silk Road Fund are included as “State Banks”, but only for the purpose of interest income they derive from loans in Pakistan for the Energy Projects mentioned in the China-Pakistan Economic Corridor Energy Projects Cooperation Agreement signed at Beijing on the November 8, 2014”.

Annexure THE THIRD PROTOCOL TO THE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE ISLAMIC REPUBLIC OF PAKISTAN FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME The Government of the People’s Republic of China and the Government of the Islamic Republic of Pakistan: Desiring to establish a favorable financing environment for the Energy Projects mentioned in the China- Pakistan Economic Corridor Energy Projects Cooperation Agreement signed at Beijing on November 8, 2014, by concluding a Protocol to amend the Agreement between the Government of the People’s Republic of China and the Government of the Islamic Republic of Pakistan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed at Islamabad on November 15, 1989 (hereinafter referred to as “the Agreement”), as well as the Second Protocol to the Agreement, signed at Beijing on April 17, 2007 (hereinafter referred to as “the Second Protocol”), Have agreed as follows: Article 1 For the provisions of Article 1 of the Second Protocol, the Industrial and Commercial Bank of China and the Silk Road Fund are included as “State Banks”, but only for the purpose of interest income they derive from loans in Pakistan for the Energy Projects mentioned in the China-Pakistan Economic Corridor Energy Projects Cooperation Agreement signed at Beijing on November 8, 2014. Article 2 The Contracting States shall notify each other through diplomatic channels that the procedures required by its laws for the entry into force of this Third Protocol have been complied with. This Third Protocol shall enter into force on the date of the receipt of the later notification. In Witness Whereof the undersigned, being duly authorized representatives of the two Governments, have signed this Protocol in the Chinese and English languages at Islamabad on December 8th, 2016, both texts being equally authentic. For the Government of For the Government of the People’s Republic of China the Islamic Republic of Pakistan [C.No.2(14)Int.Taxes/83] -Sd- (Rehmat Ullah Khan Wazir) Additional Secretary/Member (IR- Policy)