Withholding Tax on Inter Company Transactions

[awaisaftab]

Under section 59AA of Income tax ordinance,2001 the holding companies can opt the option of group taxation . My question is which NTN NO(S) will be used for this purpose whether it will be the NTN of holding company or subsidiary companies.

whether withholding tax shall be charged or not in intercompany transaction ?
whether withholding tax shall be charged in case of transaction among associates company (as defined in IAS) or not ?


Regards,


Awais Aftab

[faisal_desperado]

The Federal Board of Revenue has issued draft of the detailed procedure for group taxation of 100 percent owned group of companies under section 59AA of the Income Tax Ordinance 2001 as on April 09th 2009; Under which,
The return for the tax year following the option for group taxation shall be prepared as one fiscal unit under the name of the <b>holing company</b> and the tax liability shall be discharged or the refund shall be claimed respectively as if the business of the subsidiary companies were the business of the holding company,thus NTN of holding Company shall be used, Furthermore,
the subsidiary companies shall furnish their returns of income in their respective tax jurisdiction along with a copy of application for group taxation for record and future adjustments and intimating non-taxability of the returned income since the Income / Loss of subsidiary shall be clubbed with that of its holding company for the purpose of Taxation.

All the provisions of the ordinance including WHT, subject to the conditions shall be applied on Subsidiary / Associates.

Best Regards,

[awaisaftab]

Thanks a lot for your response

which are conditions which shall be applied on Subsidiary / Associates regarding WHT

Best Regards,

Awais Aftab