Category: FAQs

Definition of Principal Officer

*Principal officer used with reference to a company or association of persons includes:  a director, a manager, secretary, agent, accountant or any similar officer; and any person connected with the management or administration of the company or association of persons upon whom the Commissioner has served a notice of treating him as the principal officer thereof   *Inserted by the Finance Act, 2003.

Definition of Royalty

*[Royalty]means any amount paid or payable, however described or or computed, whether periodical or a lump sum, as consideration for: the use of, or right to use any patent, invention, design or model, secret formula or process, trademark or other like property or right;  the use of, or right to use any copyright of a literary, artistic or scientific work, including films or video tapes for use in connection with television or tapes in connection […]

Definition of Whistleblower

Whistleblower means a person who reports concealment or evasion of income tax leading to detection or collection of taxes, fraud, corruption or misconduct, to the competent authority having power to take action against the person or an income tax authority committing fraud, corruption, misconduct, or involved in concealment or evasion of taxes.

Definition of Venture Capital Company and Fund

*Venture Capital Company and Venture Capital Fund shall have the same meanings as are assigned to them under the **[Non-Banking Finance ***[Companies] (Establishment and Regulation) Rules, 2003] According to Non Banking Finance Companies Establishment and regulation Rules 2003, venture capital company means a company licensed by the Commission to invest in venture projects through equity or other instruments whether convertible into equity or not and provides managerial or technical expertise to venture projects, or acts […]

Definition of Stock in Trade

Stock-in-trade means anything produced, manufactured, purchased, or otherwise acquired for manufacture, sale or exchange, and any materials or supplies to be consumed in the production or manufacturing process, but does not include stocks or shares.

Definition of Small Company

*Small Company means a company registered on or after the first day of July, 2005, under the Companies Ordinance, 1984 (XLVII) of 1984, which: has paid up capital plus undistributed reserves not exceeding **[fifty] million rupees ***has employees not exceeding two hundred and fifty any time during the year has annual turnover not exceeding two hundred ****[and fifty] million rupees; and is not formed by the splitting up or the reconstitution of company already in […]

Definition of Public Company

Public company means: a company in which not less than fifty per cent of the shares are held by the Federal Government *[or Provincial Government]; ** a company in which ***[not less than fifty per cent of the] shares are held by a foreign Government, or a foreign company owned by a foreign Government ****[;]] a company whose shares were traded on a registered stock exchange in Pakistan at any time in the tax year […]

Definition of Resident Company

A company shall be a resident company for a tax year if: it is incorporated or formed by or under any law in force in Pakistan;  the control and management of the affairs of the company is situated wholly *[ ] in Pakistan at any time in the year; or  it is a Provincial Government or **[Local Government] in Pakistan.   *The words “or almost wholly” omitted by the Finance Act, 2003. **The words “local […]

Definition of Private Company

Private company means a company that is not a public company. A private company is a firm held under private ownership. Private companies may issue stock and have shareholders, but their shares do not trade on public exchanges and are not issued through an initial public offering (IPO). As a result, private firms do not need to meet the Securities and Exchange Commission’s (SEC) strict filing requirements for public companies. In general, the shares of these […]

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