ISLAMABAD: Top foreign investors, including an international hotel chain and a beverage company, have approached the Federal Board of Revenue (FBR) for obtaining 'advance rulings' for assessment of income tax on the investment being to be made by these companies/joint ventures under Income Tax Ordinance 2001.
Sources told reporters on Friday that Kingdom Lusaka Hotel (Netherlands) has asked the board to issue advance ruling under section 206A of the Income Tax Ordinance. The company intends to open a hotel in Lahore, for which an advance ruling pertaining to income tax related matters has been sought from the board. The board would convene a meeting on October 6 to discuss the matter with the income tax department and Ministry of Law and Justice.
Sources said that the rulings would clarify the taxation structure to be applicable on the proposed investment projects. It would be a big incentive for foreign investors to work out income tax liability before making actual investment.
A leading beverage company--Coca Cola Export Corporation--has also requested the FBR to issue an 'advance ruling' on the applicability of income tax on the promotional expenditure to be made in Afghanistan.
Sources said that the company, registered with the Large Taxpayer Unit (LTU), Lahore, wanted to obtain ruling whether payment made in the project would attract provisions of section 152(6) of the Ordinance 2001.
Under section 152 of the Ordinance 2001, every person paying an amount of royalty or fees for technical services to a non-resident person that is chargeable to tax shall deduct tax from the gross amount paid at the rate specified in Division IV of Part I of the First Schedule. If the commissioner has reasonable grounds to believe that the non-resident person is chargeable to tax in respect of the payment, the income tax department may direct the person making the payment to deduct tax from the payment.
The company also wanted 'advance ruling' regarding promotional expenditure to be made on a cycle race to be held in Afghanistan. Sources said that 'MWH International', a non-resident foreign firm providing consultancy energy services to Wapda, wanted an advance ruling on business transactions and sale of shares. The company also wants interpretation of law on the gain on sale of immovable property in Pakistan.
The company, having joint venture with Wapda, wanted advance ruling on various provisions of the Ordinance 2001. Advance ruling helps the non-resident companies in planning for their income tax affairs well in advance, and also gives clarity to the local partners about their liabilities under the tax laws. It is an inexpensive and expeditious procedure to ensure determination of the foreign investor's tax liability avoiding long drawn and expensive litigation between the non-resident companies and income tax department, sources added.
Source: http://www.accountancy.com.pk/
Sources told reporters on Friday that Kingdom Lusaka Hotel (Netherlands) has asked the board to issue advance ruling under section 206A of the Income Tax Ordinance. The company intends to open a hotel in Lahore, for which an advance ruling pertaining to income tax related matters has been sought from the board. The board would convene a meeting on October 6 to discuss the matter with the income tax department and Ministry of Law and Justice.
Sources said that the rulings would clarify the taxation structure to be applicable on the proposed investment projects. It would be a big incentive for foreign investors to work out income tax liability before making actual investment.
A leading beverage company--Coca Cola Export Corporation--has also requested the FBR to issue an 'advance ruling' on the applicability of income tax on the promotional expenditure to be made in Afghanistan.
Sources said that the company, registered with the Large Taxpayer Unit (LTU), Lahore, wanted to obtain ruling whether payment made in the project would attract provisions of section 152(6) of the Ordinance 2001.
Under section 152 of the Ordinance 2001, every person paying an amount of royalty or fees for technical services to a non-resident person that is chargeable to tax shall deduct tax from the gross amount paid at the rate specified in Division IV of Part I of the First Schedule. If the commissioner has reasonable grounds to believe that the non-resident person is chargeable to tax in respect of the payment, the income tax department may direct the person making the payment to deduct tax from the payment.
The company also wanted 'advance ruling' regarding promotional expenditure to be made on a cycle race to be held in Afghanistan. Sources said that 'MWH International', a non-resident foreign firm providing consultancy energy services to Wapda, wanted an advance ruling on business transactions and sale of shares. The company also wants interpretation of law on the gain on sale of immovable property in Pakistan.
The company, having joint venture with Wapda, wanted advance ruling on various provisions of the Ordinance 2001. Advance ruling helps the non-resident companies in planning for their income tax affairs well in advance, and also gives clarity to the local partners about their liabilities under the tax laws. It is an inexpensive and expeditious procedure to ensure determination of the foreign investor's tax liability avoiding long drawn and expensive litigation between the non-resident companies and income tax department, sources added.
Source: http://www.accountancy.com.pk/
1 comment:
The most important thing for any business is to make sure the work is done. A business that does not maintain good accounting records is doomed to make uniformed decisions or miss opportunity to improve their bottom line.Business Accountant Sydney
Post a Comment