05-19-2006, 02:50 PM
Well Mr. Momin it is true that ur income will be exempt from tax in Pakistan until 2016 but, there is another concept in Pakistan called minimum taxation. That is even if u r exempt from income, unless specifically mentioned in second schedule of the Income Tax Ordinance, 2001, u still have to pay minimum tax on ur gross turnover at a rate of 0.5%.
And the second thing that u asked about depreciation is a general thing. that any company using IT equipment, even the simplest hardware, will get a depreciation allowance @ 30%. it is not any thing specific to IT enabled services. and if in case u get such allowance specifically it is of no use to u until 2016, as the minimum tax is computed on gross turnover and not on the taxable income.
The use to you of this allowance is that after 2016 when u will be taxed on ur taxable income and not turnover, then u can use this allowance.
and the last question regarding the admissibility of ur allowances from Pakistan in UK totally depends upon the law of UK.
Had u been in Pakistan and doing the same thing in UK, then if u were paying tax in UK for that branch, then u would have been exempt upto the extent of the income from UK. But ur UK income would have been included in ur taxable income for rate purposes.
I know if u r not mutch fluent in tax law then u will have some queries. u r welcome to ask any.
salam
And the second thing that u asked about depreciation is a general thing. that any company using IT equipment, even the simplest hardware, will get a depreciation allowance @ 30%. it is not any thing specific to IT enabled services. and if in case u get such allowance specifically it is of no use to u until 2016, as the minimum tax is computed on gross turnover and not on the taxable income.
The use to you of this allowance is that after 2016 when u will be taxed on ur taxable income and not turnover, then u can use this allowance.
and the last question regarding the admissibility of ur allowances from Pakistan in UK totally depends upon the law of UK.
Had u been in Pakistan and doing the same thing in UK, then if u were paying tax in UK for that branch, then u would have been exempt upto the extent of the income from UK. But ur UK income would have been included in ur taxable income for rate purposes.
I know if u r not mutch fluent in tax law then u will have some queries. u r welcome to ask any.
salam