Finance Bill defines beneficial owner under tax laws

Finance Bill defines beneficial owner under tax laws

ISLAMABAD: The Finance Bill 2022 has defined ‘beneficial owner’ for the purpose of treatment of tax under Income Tax Ordinance, 2001.

Amendments have been proposed in the Section 2 of the Income Tax Ordinance, 2001 through introduction of Finance Bill, 2022 on June 10, 2022.

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A new clause 7A has been inserted to Section 2 to define beneficial owner.

According to the proposed amendment:

“(7A) “beneficial owner” means a natural person who –

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(a) ultimately owns or controls a Company or association of persons, whether directly or indirectly, through at least ten percent shares or voting rights; or

(b) exercise ultimate effective control, through direct or indirect means, over the company or association of persons including control over the finances or decisions or other affairs of the company or association of persons;”

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Another amendment has also been introduced in the Section 2 of the Ordinance to define distributor. According to:

“(18A) “distributor” means a person appointed by a manufacturer, importer or any other person for a specified area to purchase goods from him for further supply;”

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