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AOP Tax
05-07-2010, 01:31 AM
Post: #1
AOP Tax
Is this correct that Association of Persons (AOP) company can benefit from this tax exemption.

Income from exports of computer software or IT services or IT enabled services is exempt from tax upto the period ending on 30th day of June, 2016.(See Clause 133 of Second Schedule of ITO,2001)

So this means no corporation tax to pay. Correct?

How would the companies profits be divided between partners? Is dividend tax applicable to AOP. is there any document on internet which tells me how AOP works in terms of taxes etc?

I am from outside pakistan but a pakistani citizen.

Appreciate your help.

regards,
triwhdxk
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05-07-2010, 02:51 AM
Post: #2
 
triwhdxk Bhai,,
AOP Tax naam ki koi cheez nahi hay pakistan may, kam say kam ye tax may nay to nahi suna pahly kabhi,,

dosri baat ye k pakistan may Income tax nature of income pay lagta hay,,,,,, Business Status (proprietor, AOP, Company) par nahi.... koi business status na to taxable ho sakta hay or na hi exempt.
Nature of income taxable ho sakti hay or exempt bhi.

AOP ki jo bhi income ho usi k hisab say us par income tax lagy ga,,, agar normal income hay to normal tax rate, agar FTR ki income hay to FTR k rate.

AOP ka profit partner k darmeyan usi hisab say divide ho ga jo k partnership deed may darg ho ga,,, AOP k profit ko Dividend nahi kaha jata,,, or na hi is par Dividend 10% income tax lagta hay,,

AOP us profit par tax ada kar chuki hoti hay is waja say jab koi partner us profit ko apni dosri income k sath jama kar k tax laibility nikalta hay to us surat may usy AOP rebat milta hay,
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05-29-2010, 06:45 AM
Post: #3
 
@Laptop,

Kia ye aisa nahin hay keh partner bas apni tax rate/slab ki ditermination kay liye AOP ka share add kerta hay, liability uski other incomes p hi establish hoti hay???
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05-29-2010, 08:13 PM
Post: #4
 
<b>92. Principles of taxation of associations of persons.-</b> (1) An
association of persons shall be liable to tax separately from the members of the association and where the association of persons has paid tax the amount received by a member of the association in the capacity as member out of the income of the association shall be exempt from tax.
<b>
65. Miscellaneous provisions relating to tax credits.- </b> (1) Where the person entitled to a tax credit under this Part is a member of an association of persons to which sub-section (1) of section 92 applies, the following shall apply –

(a) component A of the formula in sub-section (2) of section 61, sub-section (2) of section 62, sub-section (2) of section 63 and sub-section (2) of section 64 shall be the amount of tax that would be assessed to the individual if any amount derived in the year that is exempt from tax under sub-section (1) of section 92 were chargeable to tax; and

(b) component B of the formula in sub-section (2) of section 61, sub-section (2) of section 62, sub-section (2) of section 63 and sub-section (2) of section 64 shall be the taxable income of the individual for the year if any amount derived in the year that is exempt from tax under sub-section (1) of section 92 were chargeable to tax.

(2) Any tax credit allowed under this Part shall be applied in accordance with sub-section (3) of section 4.

(3) Subject to sub-section (4), any tax credit or part of a tax credit allowed to a person under this Part for a tax year that is not able to be credited under sub-section (3) of section 4 for the year shall not be refunded, carried forward to a subsequent tax year, or carried back to a preceding tax year.

(4) Where the person to whom sub-section (3) applies is a member of an association of persons to which sub-section (1) of section 92 applies, the amount of any excess credit under sub-section (3) for a tax year may be claimed as a tax credit by the association for that year.

(5) Sub-section (4) applies only where the member and the association agree in writing for the sub-section to apply and such agreement in writing must be furnished with the association’s return of income for that year.

Zeeshan bhai,,, AOP ka profit agar partner ki business income hay to us may add ho jaye ga, par chon k us profit par AOP already tax day chuki hay is liye agar sirf yehi income hoti partner ki to ye us k liye exempt thi, par agar us ki or bhi business income hay to phir AOP profit us ki business income may add kar k us ki tax liability nikali jaye gi or AOP rebate diya jaye ga,,,, missal k tor par…

Mr A ki business Income 300000 hay or un ko 150000 AOP say profit mila hay to un ki total income 450000 ho gai hay,,,
450000 par tax rate 10% lagany say un ki tax liability 45000 nikalti hay,,,

Ab chon k AOP ka profit taxed hay is liye AOP rebate ki calculation k liye formula lagayen gay jo k ye hay..

AOP Rebate = AOP Share Income X Tax liability / Total Income

AOP Rebate = 150000 X 45000 / 450000
AOP Rebate = 15000

Ab ham Tax liability may say AOP rebate Less kar dayn gay

45000 – 15000 =30000

As tarhan 30000 tax dayna pary ga.
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12-27-2010, 08:52 PM
Post: #5
 
Yes Triwhdxk! You are right AOP[Associations of Persons], Sole Proprietor, Private Limited and Public Limited can get benifit from this exemption. Here is what PSEB says about it

What about taxes?

IT firms and companies which earn through exports are exempt from corporate taxes till 2016; personal income taxes of employees, however, have to be paid.

Companies deriving revenues through the domestic IT market will be taxed.

Software houses/companies are exempt from customs duties and leviable taxes on import of hardware/software tools which are not manufactured locally and which are to be used for software development and export purposes.

(above text is taken from PSEB website please see following link)
http//www.pseb.org.pk/UserFiles/documents/YouWant_Become_Entrepreneur.pdf

and you can also find it in Income Tax Ordinance on FBR website

3[(133) Income from exports of computer software or IT services or IT enabled services upto the period ending on 30th day of June, 2016.

Explanation.-

For the purpose of this clause –

a) “IT Services” include software development, software maintenance, system integration, web design, web development, web hosting, and network design, and

b) “IT enabled services” include inbound or outbound call centres, medical transcription, remote monitoring, graphics design, accounting services, HR services, telemedicine centers, data entry operations 4[, locally produced television programs] and insurance claims processing.]

(above text is taken from Income Tax Ordinance 2001 please see following link for full document)

http//www.fbr.gov.pk/newdt/ITordinance/ITOrdinance2009/ITaxOrdinance2001ut28-10-2009.pdf

I hope this clears every thing.

Regards,
Imran Subhani
dot5ive.com
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