Resident and non-resident persons Flashcards
What is a resident person?
A person shall be a resident person for a tax year if the person is –
(a) a resident individual, resident company or resident association of persons for the year; or
(b) the Federal Government.
A person shall be a non-resident person for a tax year if the person is not a resident person for that year.
What is a resident individual?
An individual shall be a resident individual for a tax year if the individual –
(a) is present in Pakistan for a period of, or periods amounting in aggregate to, 183 days or more in the tax
year; or
(c) is an employee or official of the Federal Government or a Provincial Government posted abroad in the tax
year;
(d) is a citizen of Pakistan and
o is not present in any other country for more than 182 days during the tax year or
o who is not a resident taxpayer of any other country.
What is a resident company?
A company shall be a resident company for a tax year if –
(a) it is incorporated or formed by or under any law in force in Pakistan;
(b) the control and management of the affairs of the company is situated wholly in Pakistan at any time in the year;
or
(c) it is a Provincial Government or Local Government in Pakistan.
What is a resident association of persons?
An association of persons shall be a resident association of persons for a tax year if the control and management of
the affairs of the association is situated wholly or partly in Pakistan at any time in the year.
What is a person?
The following shall be treated as persons under Income Tax Ordinance, 2001, namely:
(a) An individual;
(b) A Company or an association of persons incorporated, formed or established in Pakistan or elsewhere;
(c) The Federal Government, a foreign government, a political sub division of a foreign government, or public
international organization.
Define a company.
―Company‖ means the following:
(a) a company as defined in the Companies Act, 2017;
(b) a body corporate formed by or under any law in force in Pakistan;
(c) A Modaraba;
(d) a body incorporated under the law of a country outside Pakistan relating to incorporation of companies;
(e) a co-operative society, a finance society or any other society;
(f) a non-profit organization;
(g) a trust, an entity or a body of persons established by or under any law for the time being in force;
(h) a foreign association, whether incorporated or not, which the Board has declared to be a company for the
purposes of ITO 2001;
(i) a Provincial Government;
(j) a Local Government in Pakistan; or
(k) a Small Company;
Define trust.
Trust means an obligation attached to the ownership of property and arising out of the confidence given to and
accepted by the owner, for the benefit of another, or of another and the owner, and includes a unit trust.
What is a unit trust?
Unit trust means any trust under which beneficial interests are divided into units so that the rights of the
beneficiaries to income/capital are determined by the number of units held.
Define Associations of persons.
―Association of persons‖ includes the following
(a) A firm
(b) A Hindu Undivided Family
(c) Any Artificial Juridical Person
(d) Any body of persons formed under a foreign law. However a company is not included in association of person.
What is firm?
Firm means the relation between persons who have agreed to share the profits of a business carried on by all or any
of them acting for all.
Define member.
in relation to an association of persons, includes a partner in a firm;
Tax on taxable income.
(1) Income tax shall be
(a) imposed for each tax year,
(b) charged at the rates specified in 1st Schedule,
(c) charged on every person who has taxable income for the year.
(2) The income tax for a tax year shall be computed
(a) by applying the rate of tax to the taxpayer‘s taxable income for the year, and
(b) tax credits shall be subtracted from above figure.
