Professional Documents
Culture Documents
Companies
Index
1.
2.
3.
Section 2.
Section 94.
Section 97.
Definitions....................................................................79
Principles of taxation of companies.............................87
Disposal of asset between wholly-owned
companies ....................................................................87
4.
Section 139. Collection of tax in the case of private companies
and associations of persons..........................................89
5.
Section 200. Offences by companies and associations of
persons .........................................................................90
6.
Liability to deduct tax on company .............................90
7.
Section 113. Minimum tax on the income of certain persons.- ......100
8.
Tax Rates for Companies...........................................101
9.
Reduction In Tax Rates..............................................102
10.
Reduction In Tax Liability.........................................103
11.
Exemption From Specific Provisions ........................103
78
Companies
1.
Section 2. Definitions
Section 2. Definitions
(12)
(5B)
(7)
(14)
(24)
79
Companies
Section 2. Definitions
(New)
(25)
(28)
(34)
(35)
Substituted for the words set up by the Investment Corporation of Pakistan or by an investment company by
the Finance Act, 2003.
80
Companies
Section 2. Definitions
5
(37)
(38)
(39)
(42)
(45)
(47)
81
Companies
Section 2. Definitions
8
[(ab) a company in which 9[not less than fifty per cent of the]
shares are held by a foreign Government, or a foreign
company owned by a foreign Government 10[;]]
(b)
11
[(c) a unit trust whose units are widely available to the public
and any other trust as defined in the Trusts Act, 1882 (II of
1882);]
(New)
12
13
(50)
(52)
(53)
82
Companies
Section 2. Definitions
(57)
(58)
(59)
(60)
(70)
(72)
(71)
(73)
(74)
(1A)
14
Substituted for the words, brackets, comma and figure Venture Capital Company and Venture Capital Fund
Rules, 2001 by the Finance Act, 2004.
15
The word Company substituted by the Finance Act, 2005.
16
Inserted by the Finance Act, 2004.
83
Companies
Section 2. Definitions
[ ]
An individual;
(b)
17
84
Companies
Section 2. Definitions
(c)
(2)
(b)
company means
(i)
(c)
[(ix)
22
85
Companies
1.3
Section 2. Definitions
(d)
(e)
(2)
(b)
or
resident
25
(a)
(b)
(c)
86
Companies
2.
3.
(1)
(2)
(3)
(2)
(b)
(c)
(d)
the transferee must not be exempt from tax for the tax year
in which the disposal takes place.
26
87
Companies
(b)
(ii)
(iii)
(c)
(d)
(3)
(4)
(b)
88
Companies
4.
Section 139. Collection of tax in the case of private companies and associations of persons
(b)
shall be jointly and severally liable for payment of the tax due by the company.
(2)
Any director who pays tax under sub-section (1) shall be entitled to
recover the tax paid from the company or a share of the tax from
any other director.
(3)
(4)
(5)
89
Companies
5.
(b)
(3)
(b)
6.
6.1
Companies
The average rate of tax of an employee for a tax year for the
purposes of sub-section (1) shall be computed in accordance with
the following formula, namely:
A/B
where
6.2
6.3
Where
27
(b)
27
Substituted by the Finance Act, 2003. The substituted clause (a) read as follows:
(a) a person pays yield on a National Savings Deposit Certificate, including a Defence Savings
Certificate, under the National Savings Scheme;
28
Substituted for the word and by the Finance Act, 2003.
91
Companies
(c)
(d)
the payer of the profit shall deduct tax at the rate specified in Division I of
Part III of the First Schedule from the gross amount of the yield or profit
paid as reduced by the amount of Zakat, if any, paid by the recipient under
the Zakat and Ushr Ordinance, 1980 (XVII of 1980), at the time the profit
is paid to the recipient.
32
6.4
(2)
This section shall not apply to any profit on debt that is subject to
sub-section (2) of section 152.
[(3)
Tax deducted under this section shall be a final tax on the profit on
debt arising to a taxpayer other than a company from transactions
referred to in clauses (a), (b) and (d) of sub-section (1).]
33
29
The commas and words , other than a financial institution, omitted by the Finance Act, 2003.
Inserted by the Finance Act, 2003.
The words, letters and brackets clauses (a) and (b) substituted by the Finance Act, 2003.
32
Added by the Finance Act, 2006.
33
Inserted by the Finance Act, 2006.
30
31
92
Companies
(a)
(b)
(c)
shall deduct tax from the gross amount payable under the contract at the
rate specified in Division II of Part III of the First Schedule.]
34
[(1B) The tax deducted under sub-section (1A) shall be a final tax on the
income of a non-resident person arising from a contract.]
(2)
(3)
(4)
(a)
(b)
(c)
(d)
34
93
Companies
37
(b)
(7)
37
94
Companies
6.5
(b)
(c)
shall, at the time of making the payment, deduct tax from the gross
amount payable at the rate specified in Division III of Part III of the First
Schedule.
44
(2)
45
The gross amount payable for a sale of goods shall include the
sales tax, if any, payable in respect of the sale.
[]
40
95
Companies
(4)
(5)
(b)
46
(ii)
(iii)
[ (ba)
(c)
(3)
Every prescribed person making a payment in full or part (including a payment by way of advance) to
a non-resident person on the execution of
A
[ ]
B
[ ]
(c)
a contract or sub-contract under a construction, assembly or installation project in
Pakistan, including a contract for the supply of supervisory activities in relation to such
project; or
(d)
any other contract for construction or services rendered, other than a contract to which
C
section 152 applies, [or]
D
[(e)
a contract for advertisement services rendered by T.V. Satellite Channels,] shall deduct
tax from the gross amount payable under the contract at the rate specified in Division III
of Part III of the First Schedule.
A
Omitted by Finance Act, 2005. The omitted clause (a) read as follows:
(a)
a turnkey contract;
B
Omitted by the Finance Act, 2005. The omitted clause (b) read as follows:
(b)
a contract or sub-contract for the design, construction or supply of plant and equipment
under a power project;
C
Inserted by the Finance Act, 2004.
D
Added by the Finance Act, 2004.
46 Inserted by the Finance Act, 2003.
96
Companies
(d)
48
49
[(6)
[(e)
The tax deducted under this section shall be a final tax on the
income of a resident person arising from transactions referred to
in sub-section (1) or (1A):
Provided that sub-section (6) shall not apply to companies
in respect of transactions referred to in clause (b) of sub-section
(1).]
50
[(6A)
51
[]
(8)
52
[(8A) Every person from whom tax is being collected under this section
shall disclose his National Tax Number to the withholding agent.
In case of there being no National Tax Number (NTN),
Computerized National Identity Card Number (CNIC) shall be
provided. Where a person fails to disclose his NTN or CNIC
number, as the case may be, at the time of collection or deduction
of tax, the rate of withholding tax shall be two per cent over and
97
Companies
above the rates specified in Division III of Part III of the First
Schedule;]
In this section,
(9)
56
(a)
(b)
(c)
(d)
(e)
[(f)
58
53
98
Companies
59
6.7
[(3)
(ii)
a Provincial Government;
(iii)
a local authority;
(iv)
a company;
(v)
a non-profit organization;
(vi)
(vii)
59
Substituted by the Finance Act, 2006. The substituted sub-section (3) read as follows:
(3)
In this section, prescribed person means the Federal Government, a Provincial Government, local
authority, a company, a non-profit organisation or a diplomatic mission of a foreign state.
60
Substituted by the Finance Act, 2005. The substituted section 233 read as follows:
233.
Brokerage and Commission.- (1) Where any payment on account of brokerage or commission is
made by the Federal Government, a Provincial Government, a local authority, a company or an
A
association of persons [constituted by, or under, any law] (hereinafter called the principal) to any
B
person [other than travel agents and insurance agents] (hereinafter called the agent), the
principal shall deduct advance tax at the rate specified in Part IV of the First Schedule from such
payment.
(2) If the agent retains commission or brokerage from any amount remitted by him to the principal, he
shall be deemed to have been paid the commission or brokerage by the principal and the principal
shall collect advance tax from the agent.
C
[(3) Where any payment on account of brokerage or commission is made by the principal to a travel
agent or an insurance agent, the principal shall deduct advance tax at the rate specified in Part IV
of the First Schedule from such payment.]
D
[(4) Where any tax is collected from a person under sub-section (1) or sub-section (3), the tax so
collected shall be the final tax on the income of such persons.]
A
Inserted by the Finance Act, 2003.
B
Inserted by the Finance Act, 2004.
C
Added by the Finance Act, 2004.
D
Added by the Finance Act, 2004.
61
The word resident omitted by the Finance Act, 2006.
99
Companies
7.
(2)
(3)
Where any tax is collected from a person under sub-section (1), the
tax so collected shall be the final tax on the income of such
persons.]
(2)
64
(a)
the aggregate of the persons turnover for the tax year shall
be treated as the income of the person for the year
chargeable to tax; 62[ ]
(b)
the person shall pay as income tax for the tax year (instead
of the actual tax payable under this Ordinance), an amount
equal to one-half per cent of the persons turnover for the
year 63[; and]
[(c)
where tax paid under sub-section (1) exceeds the actual tax
payable under Part I, Division II of the First Schedule, the
excess amount of tax paid shall be carried forward for
62
100
Companies
8.
(b)
(c)
(d)
65
Tax
Year
Banking
Company
(1)
2003
2004
2005
2006
2007
(2)
47%
44%
41%
38%
35%
Public company
other than a
banking
company
(3)
35%
35%
35%
35%
35%
101
Private company
other than a
banking company
(4)
43%
41%
39%
37%
35%
Companies
8.1
[(ii)
67
[(iii)
in
9.
[(8)
The tax collected from a person under this section on the import of
edible oil for a tax year shall be final tax.]
Clause (16)
(17)
(18)
66
102
Companies
(19)
(20)
69
10.
11.
69
70
70
103
Companies
(i)
(ii)
71
(iii)
(iv)
(v)
(vi)
104
Companies
(x)
(xi)
(xii)
72
(xiv)
(xv)
(xvi)
105
Companies
75
[ ]
76
[ ]
77
[ ]
78
[ ]
79
[ ]
[(xvii)
73
106
Companies
(16)
The provisions of sections 113, 148, 151, 153, 155 80[and 156]
shall not apply to the institutions of the Agha Khan Development
Network (Pakistan) listed in Schedule 1 of the Accord and Protocol
dated November 13, 1994, executed between the Government of
the Islamic Republic of Pakistan and Agha Khan Development
Network:
Provided that such institutions shall continue to collect and deduct
tax under section 81[149, 151, 152, 153, 155, 156 or 233] from
others persons, wherever required thereunder:
Provided further that in respect of application of section 82[113],
this clause shall take effect from the first day of July, 1991.
(1979: Clause 21)
83
[ ]
84
[ ]
(19)
The provisions of sections 113 and 151 shall not apply to non
residents, (excluding local branches or subsidiaries or offices of
foreign banks, companies, associations of persons or any other
person operating in Pakistan), in respect of their receipts from Pak
rupees denominated Government and corporate securities and
redeemable capital, as defined in the Companies Ordinance, 1984
(XLVII of 1984), listed on a registered stock exchange, where the
investments are made exclusively from foreign exchange remitted
into Pakistan through a Special Convertible Rupee Account
maintained with a bank in Pakistan.
(1979: Clause 30)
80
Substituted for the comma, figures and words ,156 and 157 by the Finance Act, 2003.
Substituted for the figure 113 by the Finance Act, 2003.
82
A
Substituted for the figures, commas and word [149, 151, 152, 153, 155, 156 or 233 by the Finance Act,
2004.
A
Earlier the figure 113 was substituted by the Finance Act, 2003.
83
Omitted by the Finance Act, 2005. The omitted clause (17) read as follows:
A
(17)
The provisions of section 113, shall not apply to [Provincial Governments and] local authorities,
B
C
qualifying for exemption under section 49 and other [ ] [Government or semi-Government bodies
which are otherwise exempt from income tax]:
Provided that nothing contained in this clause shall be construe to authorize any refund of tax already
paid or the collection of any outstanding demand created under the said section.
A
Inserted by the Finance Act, 2003.
B
The word than omitted by the Finance Act, 2004.
C
Substituted for the words and commas corporate, Government or semi-Government bodies, not otherwise
liable to income tax by the Finance Act, 2003.
84
Omitted by the Finance Act, 2005. The omitted clause (18) read as follows:
(18)
The provisions of section 113 shall not apply to Pakistan Red Crescent Society.
81
107
Companies
85
[ ]
86
[ ]
87
[ ]
88
[ ]
89
[ ]
90
[ ]
91
[ ]
(33)
The provisions of sections 151 and 233 shall not apply to any
person making payment to National Investment (Unit) Trust or a
mutual fund established by the Investment Corporation of Pakistan
or an investment company registered under the Investment
Companies and Investment Advisers Rules 1971 or a unit trust
scheme constituted by an Asset Management Company registered
under the Asset Management Companies Rules, 1995 92[or a real
investment trust, approved and authorized under the Real Estate
Investment Trust Rules, 2006, established and managed by a REIT
85
Omitted by the Finance Act, 2005. The omitted clause (20) read as follows:
(20)
The provisions of section 113 shall not apply to special purpose, non-profit companies engaged in
securitizing the receivables of Provincial Governments or the companies.
86
Omitted by the Finance Act, 2005. The omitted clause (21) read as follows:
A
(21) The provisions of section 113 shall not apply to non-profit organisations [approved under clause (36) of
section 2 or clause (58) or included in] clause (61) of Part-I of this Schedule.
A
Substituted for the words, brackets and figures including those approved or included in clause (58) or by
the Finance Act, 2003.
87
Omitted by the Finance Act, 2005. The omitted clause (22) read as follows:
(22) The provisions of section 113 shall not apply to a taxpayer who qualifies for exemption under clause
(133) of Part-I of this Schedule.
88
Omitted by the Finance Act, 2005. The omitted clause (22A) read as follows:
A
(22A) The provisions of section 113 shall not apply to a resident person engaged in the business of
shipping who qualifies for application of reduced rate of tax on tonnage basis as final tax under clause
(21) of Part II of the Schedule.
A
Inserted vide S.R.O. 248(I)/2003, dated 05.03.2003.
89
Omitted by the Finance Act, 2005. The omitted clause (23) read as follows:
(23)
The provisions of section 113 shall not apply to a venture capital company and venture capital fund
which is exempt under clause (101) of Part-I of this Schedule.
90
Omitted by the Finance Act, 2005. The omitted clause (24) read as follows:
(24)
The provisions of section 113 shall not apply to a modaraba registered under the Modaraba
Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980).
91
Omitted by the Finance Act, 2005. The omitted clause (25) read as follows:
(25)
Nothing in section 113 shall apply to Corporate and Industrial Restructuring Corporation (CIRC).
92
Inserted by the Finance Act, 2006.
108
Companies
95
[(38A) The provisions of sections 150, 151 and 233 shall not apply to a
Venture Capital Company;]
(New)
94
[(46) The provisions of sub-section (1) of section 153 shall not apply
to any payment received by an oil distribution company or an oil
refinery for supply of its petroleum products.]
(New)
[(57) The provisions of sections 96[113,] 148 and 153 shall not apply to
companies operating Trading Houses which(i)
(ii)
own fixed assets exceeding Rs.300 million at the close of
the Tax Year;
(iii)
(iv)
(v)
(vi)
Provided that the exemption under this clause shall not be available if any
of the aforementioned conditions are not fulfilled for a tax year 97[:] ]
98
93
109
Companies
[(58) The provisions of section 205 shall not apply to telecom companies
for default of not collecting withholding tax under section 236 (1)(b) on
sale of prepaid cards during tax year 2004, if the amount not collected is
deposited within three months:
Provided that nothing contained in this clause shall apply to the amounts
collected under section 236(1)(b), but not deposited in the Treasury.]
(New)
100
101
[(62)
(i)
(ii)
(b)
belong to a
companies.
wholly-owned
group
of
resident
Provided that:
(i)
99
110
Companies
(ii)
(iii)
(iv)
(v)
111