Residential Status Flashcards
(10 cards)
Residential Status of an Individual
(Section 82)
Physical Stay in Pakistan in Tax Year
183 Days or more
120 Days or more in a tax year and 365 or more days in preceding 04 years
A government employee posted abroad in the tax year irrespective of his physical stay in Pakistan.
Rules to count days
Rules to count days
Part of the day is counts as a whole day including:
The day of arrival in Pakistan
The day of Departure from Pakistan
A Public Holiday
A day of leave
A day that an individual’s activity in Pakistan is interrupted because of a strike, lock-out, or delay on receipts of supplies
A holiday spent in Pakistan before, during or after any activity in Pakistan.
–A day or a part of day where an individual is in Pakistan solely by reason of being in transit between two different places outside Pakistan does not count as a day present in Pakistan–
Residential Status of a company
(Section 83)
1- A Company incorporated in Pakistan, Provincial Government & Local Government without any condition.
2- Other company incorporated outside Pakistan is resident if Control and Management of affairs is situated wholly in Pakistan in the Tax Year.
Residential Status of an AOP
(Section 84)
AOP shall be resident if control and management is situated wholly or partly in Pakistan in a Tax Year
Income with Reference to Resident and Non-Resident
A resident person is taxable for his worldwide income subject to Tax Treaty.
A non-resident person is taxable only for his Pakistan-source income subject to Tax Treaty.
Tax Treaty:
(Section 107)
Agreement for avoidance of Double Taxation
Tax treaty shall apply in case of any contradiction between Local Laws and Foreign Laws.
Exemption of Foreign Source income of a short-term resident (Section 50)
1- If Foreign source income is not brought/received in Pakistan
2- He is resident only by reason of his employment
3- If he is Present in Pakistan for a period not exceeding 03 Years.
This section does not apply on business established in Pakistan an individual foreigner
Exemption of Foreign Source income of a Returning Expatriate (Section 51)
If a returning expatriate is resident in Tax Year but was a non-resident in the four preceding tax years, his foreign-source income shall be exempt in the current tax year and in the following tax year.
Foreign Source salary of a Resident Individual (Section 102)
Foreign source salary of a Resident Individual is exempt in Pakistan if he has paid foreign income tax on foreign source salary, or his employer has deducted tax at source from salary and paid to the revenue authority of that foreign country
Salary earned outside Pakistan shall exempt if a citizen of Pakistan leaves Pakistan during Tax Year and remains abroad during that tax year-
Section 51(2)
All cases when Foreign Source Income of a Resident Person is Exempt
Tax Paid in the foreign country- Tax Treaty
Short term resident
Returning Expatriate
A citizen of Pakistan leaves Pakistan during a tax year & remain abroad during that tax year (Only Salary will be exempt)
