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    CAF2-Tax Changes by Faraz

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    The document summarizes changes made to Pakistan's tax code. Key changes include revisions to the definitions of residential status, small companies, and permanent establishments. Tax rates for individuals and companies were also changed. Deductions for certain expenses and allowances were omitted or restricted. Capital gains taxes on the sale of assets were modified, and tax credits for certain investments were removed. Auditing procedures and sales tax regulations were updated, including changes to further tax charges and retailer tax criteria.

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    CAF2-Tax Changes by Faraz

    Uploaded by

    broken GMD
    63 views2 pages
    The document summarizes changes made to Pakistan's tax code. Key changes include revisions to the definitions of residential status, small companies, and permanent establishments. Tax rates for individuals and companies were also changed. Deductions for certain expenses and allowances were omitted or restricted. Capital gains taxes on the sale of assets were modified, and tax credits for certain investments were removed. Auditing procedures and sales tax regulations were updated, including changes to further tax charges and retailer tax criteria.

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    The document summarizes changes made to Pakistan's tax code. Key changes include revisions to the definitions of residential status, small companies, and permanent establishments. Tax rates for individuals and companies were also changed. Deductions for certain expenses and allowances were omitted or restricted. Capital gains taxes on the sale of assets were modified, and tax credits for certain investments were removed. Auditing procedures and sales tax regulations were updated, including changes to further tax charges and retailer tax criteria.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    63 views2 pages

    CAF2-Tax Changes by Faraz

    Uploaded by

    broken GMD
    The document summarizes changes made to Pakistan's tax code. Key changes include revisions to the definitions of residential status, small companies, and permanent establishments. Tax rates for individuals and companies were also changed. Deductions for certain expenses and allowances were omitted or restricted. Capital gains taxes on the sale of assets were modified, and tax credits for certain investments were removed. Auditing procedures and sales tax regulations were updated, including changes to further tax charges and retailer tax criteria.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    CAF2-Tax Changes: A Bird's Eye View

    1. Definition Residential Status changed.


    2. NTR Slab Rates changed.
    3. Small Company (Definition) excluded.
    4. IT Enabled Services, Permanent Establishment and principal officer
    (definitions) included.
    5. Deductible Allowance for Profit on debt (60C) omitted so its application also
    excluded (in IFS as in concessional loans section)
    6. Definition of FTR (a little change)
    7. MTR – Exports u/s 154(5) included in section 7.4 of Chapter 4.
    8. Taxation on SMEs Deleted.
    9. IFS
     Annuities, Superannuation Fund, Special Allowance, Allowances to
    person working outside Pakistan paid by Government (excluded)
    10. IFB
     Clause added in inadmissible deductions on contribution to approved
    gratuity/pension etc funds.
     Expenditures disallowance clause for those have not integrated system
    with FBR (added).
     Exclusion Date of effectiveness of clause related to expenses disallowance
    for sales made to unregistered by undertaking.
     Depreciation reduction on first year for asset purchased in TY2021
    onwards; clause removed.
     Cost of vehicle not playing for higher increased to 7.5M from 2.5M.
     Eligible Depreciable Asset (definition changed)
     Purchase of Assets through Banking Channel (75A) added.
    11. IFCG
     Gain taxable under NTR, criteria changed.
     Cost of Capital Asset, Definition Changed.
     Capital Gains exempt from Tax (deleted)
     Capital Gain on Immovable Property Sec. 37 (1A) SBOI Rates (changed).
     Taxation on Deemed Income (7E) added
     Capital Gain on sale of securities (37A) SBOI Rates and applicability
    (changed).
    12. Tax Credits
     Investment in Shares or insurance (62) omitted.
     Investment in health insurance (62A) omitted.
     Tax Credit for exporters of computer software or IT services (65F) omitted.
    13. AOP & Individual Taxability
     Key Points in solving AOP Numerical, additional step added and
    described.
     Principles for joint Ventures (omitted)
    14. Sales Tax
     IRIS definition added
     Powers to Enforce Filing of Returns (added)
     Records (Sec 174): Clause for maintaining foreign source records for
    indefinite period added.
     NADRA (Sec 175B) added.
     Audit (Sec 177)
    i. clause added: if tax payer audit in any of past 4 years, cannot be
    audited unless commissioner get approval from board.
    ii. clause deleted: a person audited in a year shall not preclude him
    from being audited again in next and following years on reasonable
    grounds.
     Alternate Dispute Resolution Committee (a lot of changes)
     Rules for formation and working of ADRC (omitted)
     Definition of Value of Supply (a point added): excluding subsidies given
    by Government to electricity consumers for determination of VOS.
     Definition: Company (added)
     Further tax charges on supplies to person who have not obtained
    Registration Number or Not in ATL (Additional point)
     Exception to Further Tax: Fertilizers Excluded.
     Tax on Retailers Sec. 9(9): Criteria Changed (Fix Tax on Bills amounts)
    and other clauses have been added.
     Integration of invoice issuing machines with board system Sec. 3(11)
    (added)
     Discontinuance of gas and electricity connections Sec. 14(AB) added.
     Restriction on input on supplies to unregistered persons (clauses changes)
     Time and manner of payment (Sec. 6) a clause added.
     Adjustable Input Tax. (exception of public listed companies on PSX has
    been lifted for 90% output restriction)

    Note: There's a possible human error/omission in noting the differences. Cross


    confirm from your teacher/mentor. There's possibility that not all changes might be
    addressed.

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