Pakistan: FBR Circular states that JV that has a non-resident company as a partner will be regarded as an AOPJanuary 31, 2013
The Pakistan Federal Board of Revenue issued Circular No. 1 of 2013 dated 18 January 2013 stating that income arising to a joint venture (JV), in which a JV partner is a non-resident company, shall in all circumstances be assessed in the capacity of an association of persons (AOP).
Income of an AOP is per se liable to tax under Pakistan Income Tax Ordinance (ITO) and, therefore, Pakistan source income will be subject to withholding tax provisions in ITO.
It has been further brought to the notice of the tax authorities that exemption certificates should not be issued in such cases.
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