Preliminary Chapter- 04
(a) AOP in Pakistan while its control and management is not in Pakistan wholly or partly.
(b) An individual resident in Pakistan for a period of 185 days, however his stay in Pakistan was not
continuous.
(c) A company incorporated in Pakistan.
Solution:
Non-resident (a) Resident (b) and (c)
"Royalty" [U/s 2(54)] means any amount paid or payable, as consideration for -
(a) the use of, or right to use any patent, invention, design or model, secret formula or process,
trademark or other like property or right;
(b) the use of, or right to use any copyright of a literary, artistic or scientific work, including films or video
tapes for use in connection with television or tapes in connection with radio broadcasting, but shall
not include consideration for the sale, distribution or exhibition of cinematograph films;
(c) the receipt of, or right to receive, any visual images or sounds, or both, transmitted by satellite, cable,
optic fiber or similar technology in connection with television, radio or internet broadcasting;
(d) the supply of any technical, industrial, commercial or scientific knowledge, experience or skill;
(e) the use of or right to use any industrial, commercial or scientific equipment;
(f) the supply of any assistance that is ancillary and subsidiary to, and is furnished as a means of
enabling the application or enjoyment of, any such property or right; and
(g) the disposal of any property or right.
"Salary" [U/s 2(55)] means salary as defined in section 12;
Explanation: This refers to salary as defined in section 12 which means any amount received by an
employee from any employment, whether of a revenue or capital nature, including from clauses (a) to (g) of
the said section.
"Schedule" [U/s 2(56)] means a Schedule to this Ordinance;
Explanation: It means a schedule to this Ordinance, The schedules are as good as other parts of the
statutes and it is wrong to assume that in case of conflict between statute and schedules, the latter will
prevail. In fact, in case of such a conflict harmonious approach is to be adopted by the courts.
"Securitization" [U/s 2(57)] means securitization as defined in the Asset Backed Securitization Rules,
1999;
Explanation: "Securitization" means a process whereby any Special Purpose Vehicle raises funds by issue
of Term Finance Certificates or any other instruments with the approval of the Commission, for such
purpose and uses such funds by making; payment to the Originator and through such process acquires the
title, property or right in the receivables or other assets in the form of actionable claims;
"Share" [U/s 2(58)] in relation to a company, includes a modaraba certificate and the interest of a
beneficiary in a trust (including units in a trust);
Explanation: This is an inclusive definition which in addition to the ordinary meaning of the expression
"share" includes Modaraba Certificates and the interest of a beneficiary in a trust including unit trust. The
aim is to bring these two categories at par with shareholders of companies as far as taxation of distribution
of profit by modarabas and unit trusts is concerned.
"Shareholder" [U/s 2(59)] in relation to a company, includes a modaraba certificate holder, a unit holder of
a unit trust and a beneficiary of a trust;
Explanation: It includes Modaraba Certificate holder and beneficiary of a trust. Since this is an inclusive
definition all other shareholders automatically fall under its meaning.