05-28-2011, 12:14 AM
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?
Proper Answer:
Treatment of Salary through employment Excercised in Pakistan:
Salary received by Mr. Kim will be Taxable under (Section 101) "Pakistan Source Income" of the Income Tax Ordinance 2001.
Additional Explaination:
As Samsung which is a foreign company but have 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 excercised in Pakistan will be chargeable to tax under Pakistan Source Income.
Proper Answer:
Treatment of Salary through employment Excercised in Pakistan:
Salary received by Mr. Kim will be Taxable under (Section 101) "Pakistan Source Income" of the Income Tax Ordinance 2001.
Additional Explaination:
As Samsung which is a foreign company but have 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 excercised in Pakistan will be chargeable to tax under Pakistan Source Income.
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