05-17-2006, 06:49 AM
I am looking at the possibility of starting a Call center in Pakistan that will primarily be getting Call center and back office business from the USA, UAE and Europe and servicing the business in Pakistan. Now i have read about some of the incentives that the Pakistan Government is extending but i want to know what they exactly mean in terms of a US company doing business in Pakistan (Or a Pakistani company owned by Pakistani and US individuals doing the work).
1) One incentive by the Pak Govt says that there is a complete Tax Holiday on Corporate profits until 2016? What does this mean in terms of paying taxes in Pakistan, and in terms of paying taxes in the US? I am assuming that there will be no double taxation due to the taxation treaty between the US and Pakistan (I dont know much about this treaty). So if there is no double taxation then does this mean that this Corporation will not be paying any Pakistani Taxes untill 2016 and not paying any US taxes until 2016?
2) Pakistan Government offers that all the IT/Call center and related equipment can be depreciated at the rate of 30% per annum. What does this mean to a company? My confusion here is that if i was paying corporate taxes then i could offset these taxes each year with 30% of the cost of the equipment. BUT if there are no Taxes until 2016 then what exactly am i ofsetting? Also if i am paying US taxes and not Pakistani Taxes then can i offset the US taxes with this 30%.
Anyway, i suppose my questions are about the above two issues intertwined with the issue of Possible double taxation (or lack there off) between Pakistan and The US or between Pakistan and the UAE. I would REALLY APPRECIATE any explanation and clarity on these questions as well as any other things that may be beneficial to a person who is looking at the possibility of starting this business.
Thanks and Best Regards,
Momin Durrani.
1) One incentive by the Pak Govt says that there is a complete Tax Holiday on Corporate profits until 2016? What does this mean in terms of paying taxes in Pakistan, and in terms of paying taxes in the US? I am assuming that there will be no double taxation due to the taxation treaty between the US and Pakistan (I dont know much about this treaty). So if there is no double taxation then does this mean that this Corporation will not be paying any Pakistani Taxes untill 2016 and not paying any US taxes until 2016?
2) Pakistan Government offers that all the IT/Call center and related equipment can be depreciated at the rate of 30% per annum. What does this mean to a company? My confusion here is that if i was paying corporate taxes then i could offset these taxes each year with 30% of the cost of the equipment. BUT if there are no Taxes until 2016 then what exactly am i ofsetting? Also if i am paying US taxes and not Pakistani Taxes then can i offset the US taxes with this 30%.
Anyway, i suppose my questions are about the above two issues intertwined with the issue of Possible double taxation (or lack there off) between Pakistan and The US or between Pakistan and the UAE. I would REALLY APPRECIATE any explanation and clarity on these questions as well as any other things that may be beneficial to a person who is looking at the possibility of starting this business.
Thanks and Best Regards,
Momin Durrani.