First reading of the Draft Act on the Ratification of the Agreement between the Government of the Republic of Estonia and the Government of the Islamic Republic of Pakistan for the Avoidance of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Fiscal Fraud, and the Protocol thereto (368 SE)
Session: 15th Riigikogu, 3rd session, plenary session
Date: 2024-03-06 18:43
Participating Politicians:
Total Speeches: 14
Membership: 15
Agenda Duration: 10m
AI Summaries: 14/14 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The ninth item on the Riigikogu agenda addressed the first reading of Draft Act 368 concerning the ratification of the agreement between the Government of the Republic of Estonia and the Government of the Islamic Republic of Pakistan for the avoidance of double taxation with respect to taxes on income and the prevention of tax avoidance and tax evasion. The agreement was signed in Tallinn on November 20, 2023, and is based on the OECD Model Convention.
The main points of the agreement include the taxation of dividend income and interest income at a rate of up to 12.5%, the taxation of royalties and fees for technical services at a rate of up to 10%, and a comprehensive exchange of information between tax administrations. Pakistan is currently Estonia’s 75th largest export partner; in 2023, the export of goods to Pakistan totaled 5.9 million euros and imports totaled 10.3 million euros. Estonia primarily exports refined petroleum products and wood pulp to Pakistan, while importing textile products and leather goods.
Decisions Made 1
It was decided to conclude the first reading of Draft Bill 368. The deadline for submitting amendments was set for March 20th at 5:15 PM. There was no request to open the debate.
Most Active Speaker
The most active speaker was Marek Reinaas, a member of the Finance Committee, who presented a thorough overview of the Finance Committee's February 19 session and answered questions regarding the content of the agreement. His political position is not clear from the material provided.
Aseesimees Jüri Ratas
AI Summary
The Riigikogu proceeds to the ninth item on the agenda, which is the first reading of Bill 368 — the Act on the Ratification of the Agreement between the Government of the Republic of Estonia and the Government of the Islamic Republic of Pakistan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion and Tax Fraud with respect to Taxes on Income, and the Protocol thereto — and Minister of Finance Mart Võrklaev is invited to the Riigikogu rostrum.
Rahandusminister Mart Võrklaev
AI Summary
The Double Taxation Avoidance Agreement between Estonia and Pakistan, submitted to the Riigikogu for ratification, allocates taxation rights, reduces double taxation, enhances the exchange of information and cooperation between tax authorities, and restricts the right to tax dividends, interest, royalties, fees for technical services, and pensions. This agreement is based on the OECD Model Convention and was signed in Tallinn on November 20, 2023.
Aseesimees Jüri Ratas
AI Summary
Jüri Ratas greets the waiter and the esteemed minister and announces that there are at least two questions, asking Rain Epler to present them.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler posed a brief question concerning the approximate number of Estonian companies and individuals affected, and the magnitude of the financial impact this ratification would have on the state budget compared to the current status quo (approximate orders of magnitude).
Rahandusminister Mart Võrklaev
AI Summary
Finance Minister Mart Võrklaev stated that Pakistan is Estonia's 75th export partner. In 2023, goods worth 5.9 million euros were exported to Pakistan, while 10.3 million euros were imported from Pakistan, resulting in a trade deficit of 5.14 million euros. Estonia primarily exports refined petroleum products, wood pulp, cast iron, and steel and iron scrap to Pakistan. Imports from Pakistan include leather clothing, clothing accessories, woven fabrics, and textile products. It is hoped that trade will improve following the ratification of the agreement.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
He notes that the state-owned entity mentioned under Article 11 could be the Enterprise Estonia Foundation (Ettevõtluse Arendamise Sihtasutus), which is affiliated with KredEx and has been named EISA, and asks whether the precision of the names or the fact of the affiliation is material in the context of the agreement.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas invites Arvo Aller to speak.
Rahandusminister Mart Võrklaev
AI Summary
Given that the negotiations were rather extensive, I believe that is irrelevant here; the continuity of EAS and EISA is clearly traceable and verifiable, and it causes no issues within the context of this specific agreement.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas thanked the minister, stated that there were no questions, and called upon Marek Reinaas, a member of the Riigikogu Finance Committee, to take the floor.
Marek Reinaas
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The Finance Committee discussed the draft agreement on the avoidance of double taxation with Pakistan on February 19, where the reason for the 12.5% withholding rate and the significance of the agreement were explained, and it was decided to conclude the first reading.
Aseesimees Jüri Ratas
AI Summary
Vice-Speaker Jüri Ratas called upon Evelin Poolamets to speak.
Evelin Poolamets
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The rapporteur asked how many people the agreement concerned, and noted that the minister was unable to answer the question, requesting a response from the commission.
Marek Reinaas
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Reinaas said that a specific figure had not been mentioned in the Finance Committee, and the committee was surprised and noted that Estonia primarily exports refined petroleum products, scrap metal, iron waste, and wood pulp to Pakistan, and sources leather products from there.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas announced that it was not recommended to open debates, the first reading of draft bill 368 has been concluded, and the deadline for submitting amendments is March 20th at 17:15.