Category: Terms and Definitions

Definition of Non- Banking Finance Company

*Non-banking finance company means an NBFC as defined in the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003. A non-banking finance company is defined as a company that is licensed by the Commission to engage in one or more forms of business in terms of rule 5 provided that its memorandum and articles of association permits it to do so, and includes asset management company, discount house, housing finance company, investment adviser, investment finance company, […]

Definition of Profit on Debt

Profit on a debt *[whether payable or receivable, means]  any profit, yield, interest, discount, premium or other amount **[,] owing under a debt, other than a return of capital; or any service fee or other charge in respect of a debt, including any fee or charge incurred in respect of a credit facility which has not been utilized Profit on debt shall be Pakistan-source income if it is a.  paid by a resident person, except […]

Definition of Leasing Company

*Leasing company means a leasing company as defined in the Non-Banking Finance Companies and Notified Entities Regulation, 2007. “Leasing Company” means a Non Banking finance Company licensed by the Commission to provide leasing.     *The above clause substituted by the Finance Act, 2008. The substituted clause read as follows: “leasing company “means a company licensed under the Leasing Companies (Establishment and Regulation) Rules, 2000”.

Definition of Fee for Technical Services

Fee for technical services means any consideration, whether periodical or lump sum, for the rendering of any managerial, technical or consultancy services including the services of technical or other personnel, but does not include : consideration for services rendered in relation to a construction, assembly or like project undertaken by the recipient; or consideration which would be income of the recipient chargeable under the head ―Salary

Definition of Investment Company

*Investment company  means an investment company as defined in the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003. An investment company is a corporation or trust engaged in the business of investing the pooled capital of investors in financial securities. This is most often done either through a closed-end fund or an open-end fund. Investment companies are business entities, both privately and publicly owned, that manage, sell and market funds to the public.     […]

Definition of Pre-commencement Expenditure

Pre-commencement Expenditure means any expenditure incurred before the commencement of a business wholly and exclusively to derive income chargeable to tax, including the cost of feasibility studies, construction of prototypes, and trial production activities, but shall not include any expenditure which is incurred in acquiring land, or which is depreciated or amortised.

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.

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