Income Tax Ordinance, 2001

CHAPTER-VII

INTERNATIONAL PART III TAXATION OF NON-RESIDENTS

From: 2023-07-01 - To: 0000-00-00 (1) The following principles shall apply in determining the income of a permanent establishment in Pakistan of a non-resident person chargeable to tax under the head “Income from Business”, namely:- (a) The profit of the permanent establishment shall be computed on the basis that it is a distinct and separate person engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the non-resident person of which it is a permanent establishment; (b) subject to this Ordinance, there shall be allowed as deductions any expenses incurred for the purposes of the business activities of the permanent establishment including executive and administrative expenses so incurred, whether in Pakistan or elsewhere; (c) no deduction shall be allowed for amounts paid or payable by the permanent establishment to its head office or to another permanent establishment of the non-resident person(other than towards reimbursement of actual expenses incurred by the non-resident person to third parties) by way of: (i) royalties, fees or other similar payments for the use of any…