A company is considered a resident company for tax purposes if it is incorporated under the laws of Pakistan, has its control and management situated wholly in Pakistan at any time during the tax year, or if it is a provincial government or local authority in Pakistan. To be a resident company, a business must meet one of these three criteria relating to where it is established under law and where its management and control is located.

1. Definition

2. Resident company.-
A company
shall be a resident company
for a tax year
if –

3. it is incorporated
or
formed
by
or
under any law
in force in Pakistan;

4. the control and management
of the affairs
of the company
Is situated Wholly
in Pakistan
at any time
in the year;
or

5. it is a Provincial Government
or
local authority
in Pakistan.

6. I hope now you understand what conditions
are necessary to make a person resident
or non resident. Which is know as the
“Residential status of a tax payer”
Please answer Q5 (a) March 2007