The Federal Board of Revenue (FBR) has announced the updated rates of withholding tax on the usage of telephone and internet services for the fiscal year 2021-2022.
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The Federal Board of Revenue is Pakistan’s apex tax agency, overseeing tax collection and policies. Pakistan Revenue is committed to providing timely updates on the Federal Board of Revenue to its readers.
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FBR notifies major reshuffle of IRS officers
ISLAMABAD: The Federal Board of Revenue (FBR) on Friday notified a major reshuffle in the top bureaucracy of BS-20 and BS-21 officers in Inland Revenue Service (IRS).
The FBR in a notification said that all officers being transferred and posted shall relinquish/assume their charges in accordance with this notification with effect from September 01, 2021:-
Following IRS officers of BS-20-21 are transferred:
01. Nazir Ahmad Shoro (Inland Revenue Service/BS-21) has been transferred and posted as Member, Federal Board of Revenue (Hq), stationed at Karachi from the post of Chief Commissioner, Regional Tax Office I, Karachi.
02. Dr. Ashfaq Ahmad Tunio (Inland Revenue Service/BS-21) has been transferred and posted as Member, (IT) Federal Board of Revenue (Hq), Islamabad from the post of Director General, Directorate General of Internal Audit (Inland Revenue), Islamabad.
03. Syed Maroof Gilani (Inland Revenue Service/BS-21) has been transferred and posted as Member, Federal Board of Revenue (Hq), stationed at Karachi from the post of Chief Commissioner, Regional Tax Office, Bahawalpur.
04. Amir Ali Khan Talpur (Inland Revenue Service/BS-21) has been transferred and posted as Director General, Directorate General of Intelligence & Investigation (Inland Revenue), Islamabad from the post of Chief Commissioner, Regional Tax Office II, Karachi.
05. Qaiser Iqbal (Inland Revenue Service/BS-21) has been transferred and posted as Member, (IR-Operations) FederalBoard of Revenue (Hq),Islamabad. (He will also hold theadditional charge of the post ofDirector General International TaxOperations as per Rules. He has been transferred from the post of Chief Commissioner, LargeTaxpayers Office, Lahore.
06. Dr.Lubna Ayub (Inland Revenue Service/BS-21) has been transferred and posted as Member, (Special Initiatives), stationed at Karachi from the post of Chief Commissioner, Regional Tax Office, Quetta.
07. Muhammad Naseer Butt (Inland Revenue Service/BS-21) has been transferred and posted as Member, (Admn/HR) FederalBoard of Revenue (Hq), Islamabad from the post of Chief Commissioner, LargeTaxpayers Office, Islamabad.
8 Mr. Sajidullah Siddiqui (Inland Revenue Service/BS-21) has been transferred and posted as Director General, (Retail) Federal Board of Revenue (Hq), Islamabad from the post of Member, (IT) Federal Board of Revenue (Hq), Islamabad.
09. Tariq Mustafa Khan (Inland Revenue Service/BS-21) has been transferred and posted as Chief Commissioner Inland Revenue Regional Tax Office I, Karachi from the post of Chief Commissioner, Regional Tax Office, Gujranwala.
10. Sardar Ali Khawaja (Inland Revenue Service/BS-21) has been transferred and posted as Member, (Accounting) Federal Board of Revenue (Hq), Islamabad from the post of Chief Commissioner, Regional Tax Office, Peshawar.
11. Ahmad Shuja Khan (Inland Revenue Service/BS-21) has been transferred and posted as Chief Commissioner Inland Revenue Large Taxpayers Office, Lahore from the post of Chief Commissioner, Regional Tax Office, Lahore
12. Bakhtiar Muhammad (Inland Revenue Service/BS-21) has been transferred and posted as Director General, DirectorateGeneral of Internal Audit (InlandRevenue), Islamabad from the post of Member, (Admin/HR) Federal Board of Revenue (Hq), Islamabad.
13. Malik Amjad Zubair Tiwana (Inland Revenue Service/BS-21) has been transferred and posted as Chief Commissioner Inland Revenue Large Taxpayers Office, Islamabad from the post of Chief Commissioner, Corporate Tax Office, Islamabad.
14. Karamatullah Khan Chaudhry (Inland Revenue Service/BS-21) has been transferred and posted as Chief Commissioner Inland Revenue Regional Tax Office, Gujranwala from the post of Director General, Directorate General of Intelligence & Investigation (Inland Revenue), Islamabad.
15. Hyder Ali Dharejo (Inland Revenue Service/BS-20) has been transferred and posted as Chief Commissioner Inland Revenue (OPS) Regional Tax Office II, Karachi from the post of Chief Commissioner, Regional Tax Office, Sukkur.
16. Afaque Ahmed Qureshi (Inland Revenue Service/BS-20) has been transferred and posted as Member, (OPS) (IR-Policy) Federal Board of Revenue (Hq), Islamabad from the post of Chief Commissioner, (OPS) Regional Tax Office, Abbottabad.
17. Sajid Nazir Malik (Inland Revenue Service/BS-20) has been transferred and posted as Chief Commissioner Inland Revenue (OPS) Regional Tax Office, Abbottabad from the post of Commissioner-IR, Commissioner Inland revenue (Appeals-IV), Karachi.
18. Dr. Muhammad Sarmad Qureshi (Inland Revenue Service/BS-20) has been transferred and posted as Chief Commissioner Inland Revenue (OPS) Regional Tax Office, Bahawalpur from the post of Commissioner, (Legal) Large Taxpayers Office, Lahore.
19. Ms. Tehmina Aamer (Inland Revenue Service/BS-20) has been transferred and posted as Director General, (OPS) Directorate General of Broadening of Tax Base, Islamabad. (The officer shall also hold additional charge of the post of Chief (FATE), FBR (Hq), as per Rules. The officer has been transferred from the post of Chief, (FATE Wing) Federal Board of Revenue (Hq), Islamabad.
20. Qasim Raza Khan (Inland Revenue Service/BS-20) has been transferred and posted as Chief Commissioner Inland Revenue (OPS) Corporate Tax Office, Islamabad from the post of Chief, (Legal-III) Federal Board of Revenue (Hq), Islamabad.
21 Mr. Shahid Mehmood Sheikh (Inland Revenue Service/BS-20) has been transferred and posted as Chief Commissioner Inland Revenue (OPS) Regional Tax Office, Quetta from the post of Regional Tax Office II, Karachi.
22. Mohammad Farooq Azam Memon (Inland Revenue Service/BS-20) has been transferred and posted as Chief Commissioner Inland Revenue (OPS) Regional Tax Office, Sukkur from the post of Commissioner, Commissioner Inland Revenue (Appeals-II), Karachi.
23. Nasir Iqbal (Inland Revenue Service/BS-20) has been transferred and posted as Chief Commissioner InlandRevenue (OPS) Regional TaxOffice, Lahore has been transferred and posted as Commissioner, (Enforcement) Large Taxpayers Office, Islamabad.
24. Khurshid Ahmad Khan Marwat (Inland Revenue Service/BS-20) has been transferred and posted as Chief Commissioner Inland Revenue (OPS) Regional Tax Office, Peshawar from the post of Chief, (Admin Pool) Federal Board of Revenue (Hq), Islamabad.
The FBR said that the officers, who are drawing a performance allowance prior to issuance of the notification, shall continue to draw this allowance on the new place of posting.
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Taxation on permanent establishment in Pakistan
Section 105 of the Income Tax Ordinance, 2001 explains the taxation on non-resident persons established as permanent residents.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following is the text of Section 105 of the Income Tax Ordinance, 2001:
105. Taxation of a permanent establishment in Pakistan of a non-resident person.— (1) The following principles shall apply in determining the income of a permanent establishment in Pakistan of a non-resident person chargeable to tax under the head “Income from Business”, namely: —
(a) The profit of the permanent establishment shall be computed on the basis that it is a distinct and separate person engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the non-resident person of which it is a permanent establishment;
(b) subject to this Ordinance, there shall be allowed as deductions any expenses incurred for the purposes of the business activities of the permanent establishment including executive and administrative expenses so incurred, whether in Pakistan or elsewhere;
(c) no deduction shall be allowed for amounts paid or payable by the permanent establishment to its head office or to another permanent establishment of the non-resident person (other than towards reimbursement of actual expenses incurred by the non-resident person to third parties) by way of:
(i) royalties, fees or other similar payments for the use of any tangible or intangible asset by the permanent establishment;
(ii) compensation for any services including management services performed for the permanent establishment; or
(iii) profit on debt on moneys lent to the permanent establishment, except in connection with a banking business; and
(d) no account shall be taken in the determination of the income of a permanent establishment of amounts charged by the permanent establishment to the head office or to another permanent establishment of the non-resident person (other than towards reimbursement of actual expenses incurred by the permanent establishment to third parties) by way of:
(i) royalties, fees or other similar payments for the use of any tangible or intangible asset;
(ii) compensation for any services including management services performed by the permanent establishment; or
(iii) profit on debt on moneys lent by the permanent establishment, except in connection with a banking business.
(2) No deduction shall be allowed in computing the income of a permanent establishment in Pakistan of a non-resident person chargeable to tax under the head “Income from Business” for a tax year for head office expenditure in excess of the amount as bears to the turnover of the permanent establishment in Pakistan the same proportion as the non-resident’s total head office expenditure bears to its worldwide turnover.
(3) In this section, “head office expenditure” means any executive or general administration expenditure incurred by the non-resident person outside Pakistan for the purposes of the business of the Pakistan permanent establishment of the person, including —
(a) any rent, local rates and taxes excluding any foreign income tax, current repairs, or insurance against risks of damage or destruction outside Pakistan;
(b) any salary paid to an employee employed by the head office outside Pakistan;
(c) any travelling expenditures of such employee; and
(d) any other expenditures which may be prescribed.
(4) No deduction shall be allowed in computing the income of a permanent establishment in Pakistan of a non-resident person chargeable under the head “Income from Business” for —
(a) any profit paid or payable by the non-resident person on debt to finance the operations of the permanent establishment; or
(b) any insurance premium paid or payable by the non-resident person in respect of such debt. (Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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Taxability of expenses incurred on foreign income
Section 104 of the Income Tax Ordinance, 2001 explains the taxability of expenses incurred on foreign income.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following is the text of Section 104 of the Income Tax Ordinance, 2001:
104. Foreign losses.— (1) Deductible expenditures incurred by a person in deriving foreign-source income chargeable to tax under a head of income shall be deductible only against that income.
(2) If the total deductible expenditures referred to in sub-section (1) exceed the total foreign source income for a tax year chargeable to tax under a head of income (hereinafter referred to as a “foreign loss”), the foreign loss shall be carried forward to the following tax year and set off against the foreign source income chargeable to tax under that head in that year, and so on, but no foreign loss shall be carried forward to more than six tax years immediately succeeding the tax year for which the loss was computed.
(3) Where a taxpayer has a foreign loss carried forward for more than one tax year, the loss for the earliest year shall be set off first.
(4) Section 67 shall apply for the purposes of this section on the basis that —
(a) income from carrying on a speculation business is a separate head of income; and
(b) foreign source income chargeable under a head of income (including the head specified in clause (a)) shall be a separate head of income.
(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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FBR slashes tax rate on petrol sale
ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday reduced rate of sales tax on supply of petrol (Motor Spirit).
The revenue body issued SRO 1072(I)/2021 to make change in sales tax rate on supply of petrol.
According to the notification the sales tax rate on supply of petrol has been reduced to 10.54 per cent. The FBR brought down the sales tax rate from 10.77 per cent. Previously, the revenue body notified the sales tax rate on petroleum products through SRO 937(I)/2021 dated July 26, 2021.
The uniform rate of sales tax is 17 per cent. However, the government has reduced the rate of sales tax on various petroleum products in order provide relief to the masses.
Despite providing relief to general public through reduced rate of sales tax, the government increased the prices of various petroleum products with effect from August 16, 2021.
The government has increased the prices of kerosene oil and Light Diesel Oil (LDO) for next fortnight effective from August 16, 2021.
The prices of kerosene oil have been increased by Rs0.81 per liter, from Rs87.49 to Rs 88.30.
Likewise, the prices of Light Diesel Oil (LDO) have been increased by Rs1.10 per liter from Rs84.67 to Rs85.77.
However, the government kept prices of petrol and diesel unchanged with effective form August 16 for next fortnight.
According to the latest notification, the FBR has kept sales tax rates at reduced level for other petroleum products. However, sales tax rate on high speed diesel is remained at 17 per cent.
The sales tax rate on supply of kerosene oil is 6.70 per cent and on supply of light diesel oil is 0.20 per cent.
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Tax credit on residents’ foreign income
Section 103 of the Income Tax Ordinance, 2001 explains the tax credit on residents’ foreign income. The Federal Board of Revenue (FBR) issued the updated Income Tax Ordinance, 2001.
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Tax exemption on foreign source of income
Section 102, outlines the tax exemption on foreign-source income for resident individuals, underlining the importance of foreign income tax payments in the exemption process.
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Taxation of geographical source of income
Section 101 of the Income Tax Ordinance, 2001 explains about the taxation of the geographical source of income.
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Special provisions related to SMEs
In a bid to support and promote the growth of Small and Medium Enterprises (SMEs), the Federal Board of Revenue (FBR) has introduced special provisions under Section 100E of the Income Tax Ordinance, 2001.
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Special provisions related to builders, developers
Special provisions related to builders and developers have been introduced by the Federal Board of Revenue (FBR).
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