Tax Book 2023

Deduction / Payment of Tax Chapter- 23

152(2A)(c)
iv) Execution of contracts:
i) In case of sport person
ii) In the case of any person

10%

7%

2 0%

14 %

Nil do do do

152(4B)
in case of payment that constitutes part of an overall
arrangement of a cohesive business operation as
referred to in paragraph (ii) of sub-clause (g) of clause
(41) of section 2. 20% 40% Nil do

On application made by

the person making

payment and after

making such inquiry, as

the Commissioner thinks fit,

allow by order in writing, on

such payment under sub-

section (1A): do

IMPORTANT NOTES

IMPORTANT NOTES:

1. Where a person claims to be a representative of a non-resident person for the purposes of clause (c) of sub-section (3), the person shall file a declaration to
   that effect with the Commissioner prior to making any payment to the non-resident person. 152( 4 ).


2. Before making payment, the representative of a non resident shall file a declaration that he is the representative of the non resident.


3. 20% withholding tax shall not apply on payments that are subject to deduction of tax under section 149, 150, 156 or 233.


4. 20% withholding tax shall not apply on payments with the written approval of the CIR, that is taxable to PE in Pakistan of the non resident person.


5. 20% withholding tax shall not apply on payments where the non-resident person is not chargeable to tax in respect of the income.
   6.^ Where a person intends to make a payment to a non resident person without deduction of tax under this section (other than payments liable to reduced rate
   under relevant agreement for avoidance of double taxation/ the person shall before making the payment, furnish to the CIR a notice in writing by stating
   therein the name and address of the non-resident person and the nature and amount of the payment.


6. The commissioner may, on application made by the recipient of the payment referred above and after making such an inquiry as he thinks fit, may allow in the
   cases where the tax deductible as above is adjustable, by order in writing, any person to make the payment, without deduction of tax or deduction of tax at a
   reduced rate. [152(4A)]
   8.^ The information required in note 6 above shall not apply to a payment on account of –^ an import of goods where title to the goods passes outside Pakistan
   and is supported by import documents, except an import that is part of an overall arrangement for the supply of goods, their installation, and any commission
   & guarantees in respect of the supply where –

a. the supply is made by the head office outside Pakistan of a person to a PE of the person in Pakistan;

b. the supply is made by a PE of the person outside Pakistan to a PE of the person in Pakistan;

c. the supply is made between associates; or the supply is made by a resident person or a Pakistan PE or a non-resident person; or educational and

medical expenses remitted in accordance with the regulations of the SBP.

9. The Commissioner may, on application made by the recipient of payment referred to in sub-section (1A) having PE in Pakistan, or by a recipient of
   payment referred to in sub-section (2A), as the case may be, and after making such inquiry as the Commissioner thinks fit, allow by order in writing, in
   cases where the tax deductable under sub-section (1) or sub-section (2A) is adjustable, any person to make the payment without deduction of tax or