Goods/Services/Contracts - S153 Flashcards
Who is required to deduct (Prescribed persona)
Any businesses which are PP irrespective of their legal status
Almost everyone except
Ind/Aop less than 100m (any preced year)
Businesses which are prescibed persons irrespective of their legal status
- developer
- contractors
- AoP u/law
- exporter
- Consortium/JV
Exclsuions from W/H
3 exclusions
- Payment by Non-PP
- Goods - aggregate in FY (Jul-Jun) < 75k
- Services - aggregate in FY (Jul-Jun) < 30k
- From Commercial importer/other selling goods in same condition (who paid u/148)
- Yarn Traders (special taxation)
- Security Deposit Refund
- Payment to construction contractor in kind by Fed Govt
- Purchase of assets under lease/buy back by Modaraba/FI
- When SPV makes payment (of recovered receivables) cto originator
- Lease payments
What is Execution of Contracts
Hybrid (Goods+Services)
Turnkey Projects
Sports contracts also included
What is amount subject to Withholding in case of partial or advance payment
All Payments whether
Full
Partial
Advance
What is situation where withholding tax will be collected instead of deduction
When an agent pays to principal after deduction of his charges. Principal shall collect from Agent.
How will be tax deduction applied where in an agency relationship agent pays to principal after deduction of his agency comission (like control of paymet is with agent)
When an agent pays to principal after deduction of his charges. Principal shall collect from Agent.
What is nute of nature of Taxation or Taxation System for Tax Deducted u/153
NTR - Manufacturer if Co. (whether lsited/unlisted); Trader (Listed Co. which is listed in Pakistanonly) for sales of goods
NTR - Contract execution by Listed Co., which is Listed in Pakistan. Not foreign listed Co.
Rest All MTR, whether Services, Sale of goods, EC
There is no FTR
,
What is FTR under S153
Nothing
Is Foreign Listed Co. engaged in Trading Business NTR
No, Co. shouldbe listed in Pakistan
In which case Services are NTR or FTR
Services are MTR in all cases
Inwhich Regimes, a taxpayer (whose tax has been deducted) can apply for W/H exepmtion certificatae
Only when NTR Regime
So
Sale of Goods - Manufacturer Co
Sale of Goods - Trader - Listed Co
EC - Listed Co
What are situations where Payer will not deduct withholding Tax
- Payment by Non-PP
- Goods - aggregate in FY (Jul-Jun) < 75k
- Services - aggregate in FY (Jul-Jun) < 30k
- From Commercial importer/other selling goods in same condition (who paid u/148)
- Yarn Traders (special taxation)
- Security Deposit Refund
- Payment to construction contractor in kind by Fed Govt
- Purchase of assets under lease/buy back by Modaraba/FI
- When SPV makes payment (of recovered receivables) cto originator
- Lease payments
What is Turnover when determining prescribe persons for Ind/AoP (100 m TO)
Gross sales (incl. ST, FED, Trade disc, comission, etc) including share of AoP.
Rates
- Goods
- Normal - 4%,4.5%
- FMCG-2%,2.5%
- Service
- Co -8%
- Ind/AoP-10%
- Contracts
- Co-7%
- Ind/AoP-7.5%
- Sports Person-10%
What if payer fails to deduct W/H tax while making payment of invoice for local purchases?
Follwoings do not require deduction of WHT, hence allowed;
WH not required to be deducted from Invoice of local goods purchase, hence allowed as expense;
- Purchases from large import house
- Purchases from large trade house
- Purchase of renewable sources of energy goods e.g solar even locally manufactured
- Payment for food to hotels & restaurants when payment in cash
- Purchase worth less than 75k in FY
- Purchase of (food items) unprocessed zinda murghi ya anday from poultry farm/industrial undertaking
