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Pakistan: Finance Act 2018, tax provisions enacted

Pakistan: Finance Act 2018, tax provisions enacted

The tax law amendments proposed by Finance Bill, 2018, have been enacted as Finance Act, 2018, with changes made in some of the proposed amendments as well as the addition of some new amendments.


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Among the tax measures are:

  • Amendments to the definition of “permanent establishment”
  • Changes to the rules for the taxation of gains from the disposal or alienation outside of Pakistan of an asset located in Pakistan by a non-resident company
  • Authority granted to the tax administration to disregard an entity or corporate structure that does not have economic or commercial substance
  • Provisions to tax income of controlled foreign companies (CFCs) in the hands of the Pakistan tax resident owners when the CFCs do not earn active business income in their jurisdictions
  • Changes to alternative dispute resolution mechanisms
  • Rules for advance tax payable by banking companies
  • A minimum tax for commercial importers


Read a June 2018 report [PDF 846 KB] prepared by the KPMG member firm in Pakistan

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