Page 26 - The Pakistan Accountant

O THER AR TICLES Pakistan is a Tax Heaven for Foreigners  Syed Imtiaz Abbas Hussain, FCA Government of Islamic Republic of Pakistan always services rendered by TV Satellite Channels (Section endeavour to create environment conducive for 152 (1A) and (1B) of and (Clause 41, Part IV of foreigners for their comforts and satisfaction through Second Schedule attached to) the Income Tax applying soft, simple, relax and straight terms and ordinance 2001; conditions and exemptions and tax concessions in the Income tax, Sales tax & excise duty (VAT Mode) and other 2.2 Income Tax at 5% on gross amount of insurance income related laws for foreigners. premium or re-insurance premium (Section 152 (1AA) and (1BB) of Income Tax Ordinance 2001); Income tax In Income Tax Laws, non-resident foreign taxpayers may 2.3 Income Tax at 8% on gross amount of shipping be (a) an individual, whose stay in Pakistan is less than income for the carriage of passengers, livestock, 183 days in a tax year, (b) a Firm / Association of persons, mail or goods embarked in Pakistan (income if the control and management of their affairs is not receive in or outside Pakistan) or embarked outside situated wholly or partly in Pakistan at any time in the Pakistan (income receive in Pakistan) from carrying tax year, and (c) a Company, which is not incorporated or on the business of operating ships as the owner or formed by or under any law in force in Pakistan, and the charterer (Section 7 and 8 of Income Tax Ordinance control and management of their affairs are not situated 2001); wholly in Pakistan at any time in the tax year. 2.4 Income Tax at 3% on gross amount of air transport 1. The non-resident foreigners are not taxed in income for the carriage of passengers, livestock, Pakistan for their foreign source income; mail or goods embarked in Pakistan (income receive in or outside Pakistan) or embarked 2. The following Pakistan source income of non- outside Pakistan (income receive in Pakistan) from resident foreigners are subjected to special carrying on the business of operating aircraft as the concessional rate of income tax , which are owner or charterer (Section 7 and 8 of Income Tax deducted as a final tax, and the non-resident Ordinance 2001); foreigners are not required to file Income Tax Return for such income but to just furnish a statement to 2.5 Income Tax at 15% shall be deducted from the the Commissioner of Inland Revenue to that effect: gross amount paid on royalty or fee for technical services to non-resident foreigner (Section 6 and 8 2.1 Income Tax at 6% on gross amount of (a) a contract of Income Tax Ordinance 2001); under a construction, assembly or installation project in Pakistan, including (b) a contract for 3. The non-resident foreigners are not necessarily the supply of supervisory activities in relation to required to be in Pakistan for income tax purpose such project, and (c) a contract for advertisement as they are allow to have any person in Pakistan as 24 The Pakistan Accountant | Apr-Jun 2014