Tax Book 2023

Final Tax Regime and Minimum Tax Chapter- 22

(a) Profit on Profit and loss sharing account (PLS) account received by individual and tax deducted

@ 1 5 %.

(b) Profit on regular income certificates received by an AOP, if gross profit on debt is Rs.

7,000,000.

(c) Profit on PLS account received by company.

(d) Profit on PLS account received by individual, however, tax was not deducted.

Solution:

Case a, d fall under Minimum Tax regime and case (b) and (c) taxable under normal tax regime

4. Payments to non-residents [Section 6 and 152 ]:

Section Nature of payment/transaction Tax rate^ on

gross amount Exemption^

Status

payment

for non

resident

Deduction/

collecting

authority

152(1)

Royalty & fee for technical

services & offshore digital

services:

Income from above in Pakistan

15% (^) Nil Minimum Tax Every person
152(1A)
Contracts:
(a) 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
(b) any other contract for
construction or services
rendered relating thereto; or
(c) a contract for advertisement
services rendered by T.V.
Satellite Channels.
7 %
Nil
Minimum
Tax Every^ person^
152(1AA)
Insurance Premium or Re-
insurance premium:
Insurance premium or re-insurance
premium paid to non-resident person
This shall not apply to an amount,
with the written approval of the
Commissioner Inland Revenue that
is taxable to a permanent
establishment [PE] in Pakistan of
the non-resident person
5 % Nil
Minimum
Tax Any person^
152(1AAA)
Advertisement services:
Payment for advertisement services
to a non-resident person
10% Nil Minimum Tax Any person
152(1C)
Tax shall be deducted on remittance
outside Pakistan, of fee for off-shore
digital services, chargeable to tax u/s
6, to a non-resident person on behalf
of any resident or a permanent
establishment of a non-resident in
Pakistan.
5% of the
gross amount Nil^
Minimum
Tax Any person^
152(1D)
Every banking company or a
financial institution maintaining
special convertible rupee account
(SCRA) of a non-resident company
having no permanent
establishment in Pakistan shall
deduct tax from capital gain arising
on the disposal of debt instruments
10% of
amount of
Capital gain.
Nil Final
Banking
company or
Financial
institution