ISLAMABAD, Dec 20: The German government has agreed to include Pakistan in the list of countries whose business entities can claim refund for Value Added Tax (VAT).

According to a notification of the German Ministry of Finance, the administrative formalities in order to benefit from VAT exemption had been completed in regard to Pakistani businessmen, says an announcement of the Pakistan’s Ministry of Finance issued here on Saturday.

Pakistani business entrepreneurs will now be able to claim refund of VAT paid by them at the time of purchase of goods and services during their visit to Germany for business purposes including participation in exhibitions and trade fairs. Claims can now be lodged for VAT paid after July 1, 2008.

The business community of Pakistan and various trade promotion bodies working under the government of Pakistan including the Trade Development Authority and Engineering Development Board will be able to make enormous saving as the current rate of VAT in Germany is 19 per cent.

The amount that will be refunded will be significant as a large number of Pakistani businessmen visit Germany every year and Pakistan has a large participation in various German trade fairs and exhibitions.