PoD (S7 & 151)

Question 1

What PoD

is subject to specific Charging (FTR)

and

What PoD is subject to Withholding

Answer 1

PoD received by Ind/AoP upto 36m - S7B - FTR

All PoD subject to Withholding exempt exept 2nd sch PIV (like inter Co, SPV for Sukuk, Venture Capital Co.)

Question 2

What is Nature of PoD Income Taxation

Answer 2

Ind/Aop - upto 36m - FTR, if deduction@source u/151 less thanchargeable u/7B. Tax payer himself will pay

Ind/Aop above 36m - MTR

Company - NTR

Question 3

Transactions

Answer 3

Deposit Accounts

Loan by Co

Bond/certificate/debenture/security/instrument

Question 4

Rate

Answer 4

Withholding - 15% general

10%-Ind/AoP where interest less than 500k

Charging

Co-NTR

Ind/AoP, POD above 36m - Ind/AoP rates

Other15%-20%; 5m, 5m-25m,25-36m

Question 5

What if payer fails to deduct W/H tax from interest expense?

Answer 5

1. Interest on bank loan
2. inter corporate interest when group taxation
3. interest paid to special purpose vehicle
4. interest paid to venture capital company
5. Interest payment on security issued to non resident by resident with FBR approval
6. Profit on debt to International Finance Corporate (IFC) (Worldbank group)
7. Foreign payment of interest in respect of (project finance foreign loan) private loan, approved by FBR