Tahseen Rehman & Co. is firm of Chartered Accountants providing high quality audit, accounting, taxation and consultancy services to small and medium size businesses across Pakistan.
State Bank of Pakistan issues the revised timings for banks and microfinance banks. These timings shall be observed with an effect from Monday, July 13, 2020.
From Monday to Thursday:
09:00 a.m. to 5:30 p.m. (with prayer / lunch break from 1:30 p.m. to 2:00 p.m.)
On Friday:
09:00 a.m. to 5:30 p.m. (with prayer / lunch break from 1:00 p.m. to 2:30 p.m.)
As per the SBP, however, banks/MFBs may prescribe business hours for branches as per their business requirement subject to observance of SBP business (banking) hours for public dealings as notified vide BPRD Circular Letter No. 20 dated April 23, 2020.
All banks are advised by the State Bank of Pakistan to ensure compliance with the prescribed timings with true spirit.
A restriction has been imposed by the Federal Board of Revenue Pakistan on the deduction of profit on a debt payable to associated enterprise in order to comply with OECD action on profit shifting.
The restriction has been imposed through the introduction of Section 106A of Income Tax Ordinance, 2001 through Finance Act, 2020, recently passed by the National Assembly of Pakistan.
As per the Tax experts, in line with Action Plan 4 of the OECD’s recommendations on Base Erosion and Profit Shifting (BEPS), the newly introduced section imposes a restriction on the deduction of profit on a debt payable to associate enterprise.
Some of the key features of newly introduced Section 106A of Income Tax Ordinance, 2001 are as follows:
The section shall not apply if the total foreign profit on debt claimed as a deduction is less than Rs10 million for a tax year;
Deduction of foreign profit on debt in excess of fifteen percent of taxable income before depreciation, amortization and foreign profit on debt shall be disallowed to a foreign-controlled resident company (other than an insurance or banking company);
Where the foreign profit on debt cannot be fully adjusted against the taxable income for a tax year, the excess amount shall be added to the amount of foreign profit on debt for the following tax year and shall be treated to be part of that deduction, or if there is no such deduction for that tax year, be treated as the deduction for that tax year and so on for three tax years following the year in which the foreign profit on debt was claimed as an expense.
As per the sources of FBR, foreign profit on deb accrued with effect from the first day July 2020 shall lie under this section even if the contract date of debts is before the first day of July 2020.
Under the Finance act 2020, an attempt of a businessman to suppress sales chargeable to tax in order to reduce tax liability shall be taxed under the head of income from the business.
Officials at Federal Board of Revenue (FBR) said that amendment has been made to Section 111 of the Income Tax Ordinance, 2001 in order to bring concealed business activity shall be treated as income from the business.
Amendments are as follows:
The suppressed amount of production, sales, or any amount chargeable to tax or of any item of receipt liable to tax shall be included in the person’s income chargeable to tax under the head ‘income from business’ to the extent it is not adequately explained.
The amount credited, the value of the investment, money, value of the article, or amount of expenditure shall be included in the person’s income chargeable to tax under the head ‘income from other sources’ to the extent it is not adequately explained.
Date for retailers to integrate their Point of Sale (POS) has been extended up to August 31, 2020, by the Federal Board of Revenue Pakistan.
Previously, the deadline to integrate the POS for Tier-1 retailers was June 30, 2020.
As per the sayings of the FBR, only those retailers can integrate their POS by August 31 who submit their intention to RTOs/LTUs by August 20, 2020.
According to the sources, FBR has taken this decision due to lockdown in the many parts of the country in order to prevent the spread of coronavirus the business activities had become standstill.
Big outlets and shopping plazas are being observed with closure during the lockdown and many of those big retailers would not able to make compliance with the regulations.
The deadline was expired on December 15, 2019, which was given by the FBR to tier-1 retailers to integrate their POSs with the FBR online system. However, the date was extended in order to give the opportunity to big retailers to make compliance.
It is the requirement for all the Tier-1 retailers to integrate all their POSs with the computerized system of the FBR.
Tier-1 retailer is defined in section 2(43A) of the Sales Tax Act, 1990, to be a person who falls in any of the following categories:
a retailer operating in an air-conditioned shopping mall, plaza or center, excluding kiosks;
A wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on a wholesale basis to the retailers as well as on a retail basis to the general body of the consumers;
A retailer, whose shop measures one thousand square feet in area or more;
a retailer operating as a unit of a national or international chain of stores;
A retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand.
