Tax laws

Finance bill defines beneficial owner under tax laws

ISLAMABAD: The Finance Bill 2022 defined “beneficial owner” for tax treatment purposes under the Income Tax Ordinance 2001.

Changes have been proposed in Section 2 of the Income Tax Ordinance 2001 through the introduction of the Finance Bill 2022 on 10 June 2022.

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A new clause 7A has been inserted in section 2 to define the beneficial owner.

According to the proposed amendment:

“(7A) “beneficial owner” means a natural person who –

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(a) holds or ultimately controls a company or association of persons, directly or indirectly, through at least ten percent of shares or voting rights; Where

(b) exercise ultimate effective control, by direct or indirect means, over the company or association, including control of the finances or decisions or other affairs of the company or association ; »

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Another amendment was also introduced in section 2 of the ordinance to define the distributor. According:

“(18A) “distributor” means a person appointed by a manufacturer, importer or other person for a specified area to purchase goods from him for subsequent supply;”

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