Korea and Poland have agreed on a revised double taxation avoidance agreement to help boost bilateral economic cooperation, the finance ministry said Friday.

The provisional pact was reached at a working-level meeting by tax officials in Warsaw, with a formal agreement to be signed at a later date. The agreement must be forwarded to respective parliaments for ratification.

The revised pact will replace the current agreement that went into effect in February 1992. The current taxation agreement does not sufficiently cover intellectual property rights and patent royalties, and has no provisions for financial data exchange and guidelines to prevent tax evasion.

"The original agreement, because it is 20 years old, generally does not conform to the latest Organization for Economic Cooperation and Development standards on dual taxation," said a ministry official.

The new arrangement, in addition, defines public organizations such as the Korea Finance Corporation that do not need to pay taxes on interest payments received in Poland.

The ministry said once the new rules are in place, the tax burden of local companies operating in Poland will decrease, which can contribute to greater trade and investments. (Yonhap)