FIN623 GDB No. 1 solution
Wednesday, November 03, 2010 Posted In Fin Edit ThisQuestion/Description
A Pakistani company hires the services of an expatriate employee. The employee relocation costs to move to Pakistan are paid for by the company. Will the expatriate be required to pay tax on such costs? Give reason and also mention the relevant section.
A Pakistani company hires the services of an expatriate employee. The employee relocation costs to move to Pakistan are paid for by the company. Will the expatriate be required to pay tax on such costs? Give reason and also mention the relevant section.
Solution:
Section 51 Foreign-Source Income of Returning Expatriates
Page#23
1. Any foreign-source income derived by a citizen of Pakistan in a tax year who was not a resident individual in any of the four tax years preceding the tax year in which the individual became a resident shall be exempt from tax under this Ordinance in the tax year in which the individual became a resident individual and in the following tax year.
Interpretation
A person (expatriate) who come back to Pakistan any income that he derived included his salary will be wholly exempted in the ongoing tax year in which he comes back or become the resident , and for next year , condition that the person has never been the resident of Pakistan in any tax year since last 4 tax years .
Page#23
1. Any foreign-source income derived by a citizen of Pakistan in a tax year who was not a resident individual in any of the four tax years preceding the tax year in which the individual became a resident shall be exempt from tax under this Ordinance in the tax year in which the individual became a resident individual and in the following tax year.
Interpretation
A person (expatriate) who come back to Pakistan any income that he derived included his salary will be wholly exempted in the ongoing tax year in which he comes back or become the resident , and for next year , condition that the person has never been the resident of Pakistan in any tax year since last 4 tax years .
