DoubleTaxationPakistan – Italy tax treaty: residence, 183 days, rates
Convention between the Republic of Italy and the Islamic Republic of Pakistan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (signed 22 June 1984)
- Signed: 22/06/1984
- In force since: 27/02/1992
- Official text
If both countries treat you as resident
- Dual-resident individual: (a) resident of the State in which he has a permanent home available to him; if he has one in both States — the State with which his personal and economic relations are closer (centre of vital interests); (b) if that State cannot be determined, or if he has not a permanent home available to him in either State — the State in which he has an habitual abode; (c) habitual abode in both States or in neither — the State of which he is a national; (d) national of both or of neither — the competent authorities settle the question by mutual agreement. Art. 4(2) Pakistan–Italy Convention (1984)
- The Convention enters into force on the exchange of instruments of ratification (FBR copy: signed 22 June 1984, in force 27 February 1992) and has effect for taxable periods (Italy) and income years (Pakistan) beginning on or after 1 January of the calendar year in which the instruments are exchanged; the 1978 air and shipping agreement ceased to have effect. Art. 30 Pakistan–Italy Convention (1984); FBR copy header
- If you have no permanent home available in either State, the treaty goes straight to habitual abode (the centre of vital interests step applies only where there is a home in both States). Art. 4(2)(b) Pakistan–Italy Convention (1984)
- Centre of vital interests: the State with which your personal and economic relations are closer. Art. 4(2)(a) Pakistan–Italy Convention (1984)
- Habitual abode in both States or in neither — resident of the State of which you are a national; national of both or of neither — the competent authorities settle the question by mutual agreement. Art. 4(2)(c), (d) Pakistan–Italy Convention (1984)
Income: who taxes it
| Income | Treaty rule | Article |
|---|---|---|
| Salary (employment) | The country where the work is done may tax it. Exempt if all apply: no more than 183 days in the tax year; the employer is not resident there; the pay is not borne by its permanent establishment there. | Art. 15(2) |
| Self-employment, business, services | Country of residence; the other country taxes profits of a permanent establishment (fixed base) there, or if your stay there reaches 183 days in the tax year. | Art. 7, Art. 14 |
| Pension | Only the country of residence. | Art. 18 |
| Government service | Usually only the paying country; exception: service in the other country by its national. | Art. 19 |
| Government service pension | Usually only the paying country; exception: service in the other country by its national. | Art. 19 |
| Rent from real estate | The country where the property is located may tax; the country of residence relieves double taxation. | Art. 6(1) |
| Dividends | Source country: at most 25%; the country of residence relieves double taxation. | Art. 10(2)(b) |
| Interest (deposits, bonds, loans) | Source country: at most 30%; the country of residence relieves double taxation. Other rates or exemptions apply in some cases (see the article). | Art. 11(2) |
| Royalties (copyright, licences) | Source country: at most 30%; the country of residence relieves double taxation. | Art. 12(2) |
| Sale of property or shares | Real estate: the country where it is located may tax. Shares of companies deriving their value mainly (over 51%) from real estate: the same. Other property: under certain conditions the source country may also tax (see the article). | Art. 13; Additional Protocol (g)-(h) |
| Other income | The source country may tax; the country of residence relieves double taxation. | Art. 22 |
How double taxation is relieved
- Italy: credit for the tax paid in the source country, up to the country’s own tax on that income Art. 23(2)
- Pakistan: credit for the tax paid in the source country, up to the country’s own tax on that income Art. 23(1)
Data checked: 10/11/2026. A short summary for individuals; the full conditions, exceptions and protocols are in the treaty text. General information, not legal advice.