Ads

Pages

Wednesday, June 1, 2011

FIN623 2nd GDB IDEA SOLUTION

Samsung has a branch office in Pakistan. Mr. Kim, who is the employee of head office, is dedicated to perform services for the Pakistan branch office. What will be the tax treatment of salary received by Mr. Kim according to Income Tax Ordinance

2001?

Answer:

Treatment of Salary through employment Exercised in Pakistan:

Salary received by Mr. Kim will be Taxable under (Section 101) "Pakistan

Source Income" of the Income Tax Ordinance 2001.

Additional Explanation:

As Samsung which is a foreign company but has a branch office in

Pakistan its means that Samsung is working in Pakistan through Permanent

Establishment in Pakistan so it will be a resident company here and any salary paid by a resident company is Pakistan Source income and also any salary which can be earn through employment exercised in Pakistan will be chargeable to tax under Pakistan Source Income

No comments:

Post a Comment