November 2023
November 2023
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
CONTENTS
PREAMBLE ................................................................................................................................................ 3
SALES TAX RULES, 2006 ........................................................................................................................ 4
SRO 1525 (I)/2023 ISSUED ON NOVEMBER 10, 2023 ..................................................................... 4
DISCLAIMER .......................................................................................................................................... 16
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
PREAMBLE
Dear Readers,
As part of our monthly procedures, we are humbled to publish our document for updates in laws
stated below in the month of November 2023 through various circulars and SROs with a hope to
enlighten our respectable readers and keep them informed about changes taking in place in tax
and corporate laws of Pakistan.
With that being said, we shall continue with our newsletter explaining SROs passed in the month
of November 2023 covering following areas where applicable:
We hope this newsletter assists our readers to comprehend the amendments made to
aforementioned Acts, Ordinances and Rules during the month of November 2023.
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
150T - The registered supplier making supplies Integrated supplier shall comply with all
Issuance, under this Chapter shall simultaneously requirements specified by the Board for
recording transmit a copy of all such electronically integration, recording, storage, issuance
and issued invoices to the 190[Collector of and transmission of verifiable electronic
Transmission Sales Tax] having jurisdiction. invoices in real-time, such as provision of
of electronic any hardware, software or connectivity
invoices required under these rules for the purpose
of integration and operations of the
electronic invoicing system."
150U - Use of The registered person may use any Omitted.
formats and electronic invoice message format
controls over provided it contains all the information
transmission specified under section 23 of the Act.
of electronic
invoices The invoice shall be transmitted in a
secure environment, using industry
accepted security technologies in respect
of messages as well as communication
links and networks over which the
invoice is transferred.
timeliness of processing;
prevention of duplication of
processing by the recipient.
150W – The registered person shall allow access The integrated supplier shall allow
Audit to the record and documents maintained physical and online remote access to the
in electronic form as and when required record, system, logs and documents
by 191[an Officer of Sales Tax] as maintained in electronic form as and when
provided under section 25 of the Act. required by the officer of Inland Revenue
as provided under section 25 of the Act.";
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
150X - Same The registered buyer who receives The registered buyer who receives
conditions to electronic invoices from the registered electronic invoices from the registered
apply in supplier shall fulfill the same criterion supplier shall fulfill the same criterion and
respect of and conditions for storing them, as are conditions for storing them, as are specified
buyer for specified for the supplier in this Chapter. for the supplier in this Chapter.
receiving
electronic In case the buyer wishes to store the In case the buyer wishes to store the
invoices.- electronic invoices received from the electronic invoices received from the
supplier in a paper-based system, he can supplier in a paper-based system, he can do
do so after obtaining necessary approval so after obtaining necessary approval from
from the 194[ Collector of Sales Tax] the 194[ Commissioner Inland Revenue]
having jurisdiction. having jurisdiction.
150Y - -If the registered person has issued and In case the integrated supplier notified
Failure to stored invoices electronically but has under this chapter contravenes any of the
meet the failed to meet the conditions relating to provisions of this Chapter, he shall be liable
conditions the prescribed procedure, besides other
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
for electronic legal actions which may be taken for such to penal action as provided under relevant
invoicing failure, he shall be required to issue paper provisions of the Act.
system invoices till such time the 195[Collector]
is satisfied that the electronic system of The integrated supplier notified under this
the registered person is capable of doing chapter may apply to the Commissioner
the job. Inland Revenue having jurisdiction, for
extension in time for compliance.
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
While exercising the powers of Section 99D of income Tax Ordinance, the “Banking Companies”
are required to determine the Windfall Incomes, Profits and Gains through the method specified
below.
The tax rate shall be Forty percent (40%) for such Income, Profits and Gains.
The Windfall Incomes, Profit and Gains shall be determined according to the calculations
for Calendar Years 2021 and 2022 and then this applies to the Tax year 2022 and 2023.
The payment date of additional tax for the purpose of Section 99D shall be 30th November
and shall be extended for the period not exceeding 15 days with the approval of
Commissioner.
Provided further that such payment shall be made in Federal Treasury through a
Prescribed Challan or Computerized Payment Receipt.
The windfall income, profits and gains shall be computed using the following formula:
Windfall Income, Profits and Gains for TY 2022 (CY 2021) = [ Fx Income2021 – AM2022]
Windfall Income, Profits and Gains for TY 2023 (CY 2022) = [ Fx Income2022 – AM2023]
Where;
TY = Tax Year
CY = Calendar Year
AM = Arithmetic Mean
Fx Income2020 ] / 6
Fx Income2021 ] / 6
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
Fx Income means Foreign Exchange Income as disclosed in Financial Statement or Notes relevant
to Tax Year.
Provided that if Windfall Income for CY 2021 relevant to TY 2022 is negative then the value of
said Windfall Income shall be taken as zero for the purpose of computation of AM2023.
Provided further that, for the purpose of computation of AM2022 or AM2023, where loss has been
disclosed under the head foreign exchange income in any calendar year, such amount of loss
shall be excluded from computation along with exclusion of number of year(s), as used in
denominator of above formula.
The SRO provides following illustrations to enable users to comprehend the amendment by this
SRO.
Rs. in Billion
CY 2015 2016 2017 2018 2019 2020 2021 2022
FX 1.0 1.1 1.5 2 1.3 1.5 2.5 3.0
Income
Arithmetic mean for AM2022= (1.0+1.1+1.5+2+1.3+1.5)/6 1.4 -
TY 2022
Arithmetic mean for AM2023= (1.1+1.5+2+1.3+1.5+1.4)/6 - 1.46
TY 2023
Windfall Income, profits, and gains 2.5-1.4 = 3.0-1.46
1.1 = 1.54
Windfall Income, profits, and gains for CY 2021 1.1
Windfall Income, profits, and gains for CY 2022 1.54
Total Windfall Income, profits, and gains (CY 2021 + CY 2022) 1.1+1.54 = 2.64
Additional Tax under section 99D @ 40% 1.056
Rs. in Billion
CY 2015 2016 2017 2018 2019 2020 2021 2022
FX 1.0 -1.1* 1.5 2 1.3 1.5 2.5 3.0
Income
Arithmetic mean for AM2022= (1.0+1.5+2+1.3+1.5)/5* 1.46 -
TY 2022
Arithmetic mean for AM2023= (1.5+2+1.3+1.5+1.46)/5* - 1.55
TY 2023
Windfall Income, profits, and gains 2.5-1.46 3.0-1.55
= 1.04 = 1.45
Windfall Income, profits, and gains for CY 2021 1.04
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
Cases From To
All Cases of Builders Commissioner Special Zone for Respective ClRs' RTOS Abbottabad /
& Developers Builders & Developers, RTO Peshawar / Rawalpindi / Faisalabad /
Islamabad Gujranwala / Sargodha / Sialkot as per
their original / previous jurisdiction i.e.,
before the issuance of Notification No.
7(401) Jurisdictionl2019l280620-R dated
3'd Dec, 2019, except Cases Registered
under l00D
All Cases of Builders Commissioner Special Zone for Respective ClRs' RTOS Multan / Sahiwal
& Developers Builders & Developers, CTO / Bahawalpur as per their origanal /
Lahore previous jurisdiction i.e., before the
issuance of Notification No. 7(401)
Jurisdiclionl2019l281620-R dated 3'd
Dec, 2019, except Cases Registered
under l00D
All Cases of Builders Commissioner Special Zone for Respective ClRs' RTOs Hyderabad /
& Developers Builders & Developers, MTO Sukkur / Quetta as per their original /
Karachi previous jurisdiction i.e., before the
issuance of Notification No. 7(401)
Jurisdiction l2]19l280620-R dated 3'd
Dec, 2019, except Cases Registered
under l00D
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
https://www.secp.gov.pk/document/circular-section-172-of-the-securities-act-2015-revised-ipo-
timelines/?wpdmdl=49642&refresh=6568d823c91b91701369891
The relevant portion of letter issued by Ministry of Information and Broadcasting is reproduced
below for ease of reference:
“These are originally gambling, betting and casino companies. Such operations are mostly run from some"
hostile countries with the motive to destroy the moral fabric of Pakistan, to introduce corruption in
Pakistan team and to put Pakistan into further economic turmoil through moving untaxed money out of
the country in dollars. Many advertisements of such betting surrogate companies are being run on digital,
electronic, social and print media in Pakistan
It is critical to stop all such surrogate betting companies from operating in Pakistan. Therefore, Pakistan
Cricket Board, Pakistan Super League, PSL franchises, club cricket, private leagues, television channels,
radio broadcasters, internet platforms, newspapers, magazines and other media/ advertisement platforms
are strictly advised to not make any agreements and business relations with such surrogate companies and
to not promote them through any kind of advertisement. Moreover, it is advised to immediately terminate
all existing agreements with such surrogate companies.”
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
“The auditor shall include all the matters which are required to be included in accordance with the
Ordinance and must state that internal controls commensurate with the size and nature of services and
furthermore regulatory function has appropriate resources including human resource.”
Following substitutions are made in the clauses regarding future exchange with this SRO;
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
profits on unutilized funds of futures such an amount in equal proportion till June 30, 2025
brokers or their customers for any other with an option of earlier phase-out.
purpose other than permitted under
this Regulation shall gradually phase-
out utilization of such an amount in
equal proportion till June 30, 2025.”
The amendment involves the insertion of following new clause (viii) in Para (b) Educational
Qualification and Experience;
“In case of promoters of a futures exchange, such person should have an established and proven track
record of successfully running a business enterprise for at least 10 years”
Furthermore, the amendment involves the insertion of following new sub-clause (vii) in
clause (2) of Annexure-III (Terms of Reference of Operational, Regulatory and System
Audit of Future Exchange Under Regulation 19(8) and Special Audit under Regulation
19(9));
“(vii) assess that the scope, resources including human resource, procedures and reporting mechanism
of the regulatory function including entity level compliance were adequate and effective to ensure
compliance with relevant legal requirements and detect and report any non-compliance in a timely
manner.”
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
Approved- Other Lending Apps (i.e. EWA, BNPL, B2B, B2C, etc)
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
Through these SRO multiple officers and designations filled have been announced.
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
DISCLAIMER
This document is purely based on our understanding of SROs, circulars and guidelines passed
during the month and therefore, it is advised to consult to original document (SRO, circulars and
guidelines) to make a more informed decision.
Further, it is a fact that laws and regulations are regularly amended as per requirements of a
country. Therefore, it is requested to consult this document for SROs, circulars and guidelines
only discussed in the document.
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MONTHLY TAX & CORPORATE UPDATES –NOVEMBER 2023
CONTACT US
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Islamabad International Hospital, E-11/2 Islamabad
Tel: 041-8502082-83
Tel: +92-51-2762012
[email protected]
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102, QM, The Plaza, Block 9, Kehkashan, Clifton, 2A, 2nd Foor, 10 Civic Centre, Barket Market
Karachi. Garden Town, Lahore.
Tel:+92-42-35882201
Tel+92-21-35361701, 3-4
[email protected]
[email protected]
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KARACHI OFFICE
Tel:+92-4236299250
LAHORE OFFICE - 2
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