Double Taxation Agreement

For business information, annual reports, laws, ordinances, regulations and articles.

BUSINESS PROFITS

ARTICLE 7

44	Scope.
45.	Business profit from transaction outside.
45.1	Business profits are taxable to the extent attributable to permanent establishment.
45.2	Attribution rule and Income Tax Ordinance, 1979.
45.2-1	Doing business/doing business with or within a country.
46.	Determination of profits and arm’s length method.
47.	Relevant questions regarding taxability of income in Pakistan.
47.1	Business and trading activity.
47.1-1	Concept of business.
47.1-2	Business includes professional and commercial services.
47.2	Income from business or trading activity.
47.2-1	Concept of real income.
47.2-2	Tests to determine whether income is diverted at source.
47.2-3	Diversion versus application of income.
47.2-4	Whether gain on account of fluctuation in exchange rate amounts to income.
47.2-5	Exploitation of commercial asset, whether business income.
47.2-6	Letting/leasing of commercial assets, whether business income.
47.2-7	Investment income vis-a-vis business income.
47.2-8	Technical fee.
47.2-9	Lump sum amount received for transfer of right to receive interest.
47.2-10	Whether investment income can be taken as business income.
47.3	Computation of business income.
47.3-1	Deductibility of Expenses.
47.3-2	Non-deductibility of expenses.
47.3-3	Arm’s length method.
48.	Apportionment method.
48.1	Insurance business.
48.1-1	Computation of income from insurance business in Pakistan.