Tax regime flowcharts Flashcards
to memorize the rates and different tax regulations
The income tax rate and regime for commercial importer
Tax required to be collected shall be charged under the Minimum tax
The applicable rate for under 12th schedule is 3.5% for goods under part II and 6% for all goods other than part I and II
however for pharmaceutical which are not manufactured otherwise in Pakistan the rate shall be 4%
For goods manufactured under rescinded SRO 1125 the rate is 1% and for tax on mobile phones the rate shall be as per slab rates.
what is income tax and tax regime for manufacturing of imported goods.
Import of goods by industrial undertaking on which tax is required to be collected at the rate of 1%, 2% and 5.5% shall be subject to normal tax regime however tax collected at import stage from importers of
1. Edible Oil
2. Packaging material
3. Paper and paper board
4. Plastics
would constitute to be minimum tax in respect of income arising from such imports
Rate
1% for goods classified under Part-I either is manufacturer or commercial importer
2% for goods under Part-II
5.5% for goods under Part-III
what is the tax regime and tax rates of sale of goods by manufacturer which is a company?
Local sale of goods through manufacturing / trading and toll manufacturing
In case of company including public listed company.
The income will be assessed under the Normal tax regime and tax deductible shall be @5% for active tax payer and @10% in case of non active which shall be adjustable against NTR tax liability calculated @29% (20% for small company)
*For toll manufacturer the rate WHT will be 9%.
what is the tax regime and WHT rate for manufacturer / toll manufacturer who is individual / AOP?
Local sale of goods through manufacturing / trading and toll manufacturing
Income will be assessed under the minimum tax regime in case of sale of goods to prescribed persons and tax deductible at the rate 5.5% in case of active taxpayer and 11% in case of non active taxpayer will be treated as minimum tax liability of individual or aop manufacturers for toll manufacturing. The rate of withholding will be 11%.
Rate of tax deduction will be 1% on payment for sale of gold and silver.
In case goods are sold to a person other than prescribed person then the corresponding income from trading of those goods will be chargeable to tax under normal tax regime.
what is tax regime and WHT rate for income of Individual/AOP trader?
Local sale of goods through manufacturing / trading and toll manufacturing
Income will be assessed under the minimum tax regime in case of sale of goods who prescribed person and tax deductible at the rate 5.5% in case of active taxpayer and 11% in case of non active will be treated as minimum tax liability of individual or aop trader.
In case goods are sold to a person other than prescribed person. Then the corresponding income from trading of those will be chargeable to the tax under normal tax regime.
what is tax regime and WHT rate for the trading by company?
Local sale of goods through manufacturing / trading and toll manufacturing
In case of a company which is public listed company income from trading shall be chargeable to NTR and tax rate shall be 5% for active and 10% for non non active tax payer will be adjustable against NTR liability to be calculated @29% (20% for small company) of taxable income.
The rate of tax in case of distributed of cigarettes and pharmaceutical products. is 2.5% and 1% respectively, of gross payments.
non listed company taxation from trading depends on the stated of the customer income will be assessed under MTR in case of sale of goods to prescribed person WHT rate @5%/10% will be MTR.
in case of non prescribed person income will be chargeable under NTR.
In case company supplies goods to both prescribed persons and person other than prescribed persons, then it’s receipts from trading will be partly chargeable to tax. under normal tax regime and partly under minimum tax regime. Therefore, as per section 67 of income tax ordinance, 2001 read with rule 13 of the income tax rules, 2002 expenditure will be apportioned between the two income streams on reasonable basis taking account of relative nature and size of activities to which amount relates in case a reasonable basis cannot be determined. Such expenses will be apportioned on the basis of gross revenue.
Tax regime of services provided by companies
rendering or providing of services
Prescribed person
tax deductible shall be minimum tax
non prescribed person
Tax deductible shall be NTR
Rates
general>9% for ATL and 18% for Non ATL
4% in case of transport, freight forwarding, air cargo, courier, manpower outsourcing, hotel, security guard, software development, tracking, IT and IT enabled, advertisement (other than print, electronic media) share registrar —-ref to book
Tax regime of services provided by other than companies
rendering or providing of services
prescribed person
resident individual person/AOP the tax deductible shall be minimum tax.
non prescribed
NTR
11% for ATL and 22% rest are same as services provided by companies
ref to book pg# 208
taxation of IT export and IT enabled services
The tax deducted in case of such services shall be final discharge of tax liability FTR subject to following conditions
- return has been filed
- WHT statement for the relevant tax year have been filed
- sales tax return FED or Provincial laws have been filed
- no credit for foreign taxes paid shall be allowed
proviso of STR has been withdrawn as per finance act 2023
*if above conditions are not met then FTR would not apply and income shall be subject to NTR *
Tax rates
0.25% computer software or IT services or IT enabled services. if registered with PSEB
1% in case of person not registered with PSEB
the above service providers also has the flexibility to opt for the NTR (instead of FTR @ 1%/0.25%) by exercising such option at the time of filing of income tax return.
taxation of income of the public contractor company listed in stock exchange in Pakistan
execution of contract (other than the contract for the sale of goods or rendering of services)
> execution of contracts in Pakistan
It is calculated under NTR @ 7.5% for ATL and @15% for Non ATL
taxation of income of other than public listed company
execution of contract (other than the contract for the sale of goods or rendering of services)
> execution of contracts in Pakistan
The income shall be assessed under MTR
tax rate
7.5% for ATL and 15% for Non ATL from the gross amount received including the mobilization advance and retention money.
for non prescribed person NTR
Other tax payer taxation (individual/AOP)
execution of contract (other than the contract for the sale of goods or rendering of services)
> execution of contracts in Pakistan
Income shall be assessed under MTR
tax rate
8% for ATL and 16% for Non ATL from the gross amount of payments (including mobilization advance and retention money)
non prescribed person NTR
taxation for the contract signed by sportsperson
execution of contract (other than the contract for the sale of goods or rendering of services)
> execution of contracts in Pakistan
Every prescribed person at the tome of making payment to resident sportsperson in respect of contract signed shall deduct tax @ 10% of the gross amount and tax deducted shall be MTR
execution of contract outside Pakistan execution of contract (other than the contract for the sale of goods or rendering of services)
FTR @1% on compliance of Section 154A
NTR on non compliance of S154A
NTR if opt out
