ISLAMABAD: The income tax law has allowed final tax regime for Pakistani resident shipping company, which is registered after November 15, 2019.
According to explanation to changes made to Income Tax Ordinance, 2001 through Finance Act, 2020, the FBR said that clause (c) has been added to sub-section (1) of section 7A to provide for imposition of final tax of an amount equivalent to seventy-five US cents per ton of gross registered tonnage per annum for a Pakistani resident ship owning company registered with Securities and Exchange Commissioner of Pakistan (SECP) after November 15, 2019 and having its own sea worthy vessel registered under the Pakistan flag.
The FBR said that final tax regime for taxing gross amount received or receivable by non-resident shipping companies at fixed tax rate under section 7 did not cover shipping income of a resident person.
A new section 7A was, therefore, inserted through Finance Act, 2015, which provides for taxing shipping of residents under final tax regime.
Further, dates of applicability of section 7 and clause (98) of Part-IV of Second Schedule which exempts import of ships and other floating crafts including tugs, survey vessels and other specialized crafts purchased or bare-boat chartered by a Pakistani entity and flying Pakistani flag from applicability of provision of section 148, have been extended to 30-06-2030.
