Computation of Taxable Income Chapter- 06
(a) relief from the tax payable under this Ordinance;(b) the determination of the Pakistan-source income of non-resident persons;
(c) where all the operations of a business are not carried on within Pakistan, the
determination of the income within and outside Pakistan, or the income chargeable to tax
in Pakistan in the hands of non-resident persons, including their agents, branches, and
permanent establishments in Pakistan;
(d) the determination of the income to be attributed to any resident person having a special
relationship with a non-resident person; and(e) the exchange of information for the prevention of fiscal evasion or avoidance of taxes on
income chargeable under this Ordinance and under the corresponding laws in force in
that other country. Any agreement referred above may include provisions for the relief from tax for any period
before the commencement of this Ordinance or before the making of the agreement.- Transactions between associates [U/S 108]
The Commissioner may, in respect of any transaction between persons who are
associates, distribute, apportion or allocate income, deductions or tax credits between the
persons as is necessary to reflect the income that the persons would have realised in an arm‘s
length transaction. In making any above adjustment, the Commissioner may determine the source of income and
the nature of any payment or loss as revenue, capital or otherwise. Every taxpayer who has entered into a transaction with its associate shall:(a) maintain a master file and a local file containing documents and information as may
be prescribed;
(b) keep and maintain prescribed country-by-country report, where applicable;
(c) keep and maintain any other information and document in respect of transaction
with its associate as may be prescribed; and(d) keep the files, documents, information and reports specified in clauses (a) to (c) for the
period as may be prescribed. A taxpayer who has entered into a transaction with its associates shall furnish, within 30
days the documents and information to be kept and maintained as above if required by
the Commissioner in the course of any proceedings under this Ordinance.; The Commissioner may, by an order in writing, grant the taxpayer an extension of time
for furnishing the documents and information under this section, if the taxpayer applies in
writing to the Commissioner for an extension of time to furnish the said documents or
information:
Provided that the Commissioner shall not grant an extension of more than 45 days, when
such information or documents were required to be furnished as above, unless there are
exceptional circumstances justifying a longer extension of time.- Report from independent Chartered Accountant or cost and management accountant [U/S
108 A]
Where the Commissioner is of the opinion that a transaction has not been declared at
arm’s length, the Commissioner may obtain report from an independent chartered
accountant or cost and management accountant to determine the fair market value of
asset, product, expenditure or service at the time of transaction. The scope, terms and conditions of the report shall be as may be prescribed.