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Definition of Profit on Debt

Profit on a debt *[whether payable or receivable, means]

  1.  any profit, yield, interest, discount, premium or other amount **[,] owing under a debt, other than a return of capital; or
  2. 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 where the profit is payable in respect of any debt used for the purposes of a business carried on by the resident outside Pakistan through a permanent establishment;
b. borne by a permanent establishment in Pakistan of a non-resident person.

 


*The word “means”substituted by the Finance Act, 2003.
**Comma inserted by the Finance Act, 2002.