Group Taxation

awaisaftab · 03-09-2009, 10:24 PM

The idea of group taxation was introduced by the Finance Act 2007, Know the holding companies and their subsidiaries are alowed to be taxed as one fiscal unit. According to Section 59AA of Income Tax Ordinance,2001

(1) Holding companies and subsidiary companies of
100% owned group may opt to be taxed as one fiscal unit. In such cases,
besides consolidated group accounts as required under the Companies
Ordinance, 1984 (XLVII of 1984), computation of income and tax payable shall
be made for tax purposes.
(2) The companies in the group shall give irrevocable option for taxation
under this section as one fiscal unit.
(3) The group taxation shall be restricted to companies locally
incorporated under the Companies Ordinance, 1984 (XLVII of 1984).
(4) The relief under group taxation would not be available to losses prior
to the formation of the group.
(5) The option of group taxation shall be available to those group
companies which comply with such corporate governance requirements as may
be specified by the Securities and Exchange Commission of Pakistan from time
to time and are designated as companies entitled to avail group taxation.
(6) Group taxation may be regulated through rules as may be made by the Board.

kamranACA · 03-09-2009, 11:32 PM

Awais,

You simply pasted the wordings of the Finance Act. What sort of comments you want on this topic? I hope in your next post you would be discussing the tax treatment of corporate dividends and then the permanent establishments etc.

I saw your post on the other sub-forum thread. I wonder why you again and again mix up the taxation with accountancy. You must understand that these are two different things and must be viewed differently.

The above section may have its bearing on accounts to the extent of creating the provision for taxation to be reflected in the accounts. This would also be considered ONLY and ONLY if the option is exercised and all the conditions stipulated are met. We cannot consider this section for all groups invariably.

I would be pleased to know if you will tell me what you want to be commented upon? Please also read my reply on your other thread.

Regards,

KAMRAN.

awaisaftab · 03-11-2009, 03:42 PM

The material about which you are saying that copied from Finance Act 2007 is now part of ITO,2001 buy an updated version of ITO . Surely, soon I will discuss the topics of your choice but I shall be highly obliged if you discuss these topics in your own style.

Cheers

Awais

kamranACA · 03-11-2009, 06:49 PM

Awais,

Is there any wonder that all finance acts/ordinances always make part of ITO? There is no need to buy out a revised copy from market. It is available at FBR's website.

The purpose of my comments was to draw your attention that you have pasted the provisio of law without mentioning what you want to be commented upon? The things you have mentioned are not an interpretation or elaboration.

Further, the comments could only be given in some practical scenario. I mean if any issue of professional significance arises while opting such option and going into group taxation and assessment.

Is there any practical issue with you or any body known to you? If you have, please do share so that we can ponder on.

There is no topic of my choice. To my apprehension this forum is more of a professional nature instead of academic one, although sometimes academic questions are also raised by members. If there would be any professional query, I would be pleased to respond.

Regards,

KAMRAN.

awaisaftab · 03-11-2009, 07:36 PM

Kamran ,

Accounting and tax are two interrelated fields. You cannot separate these subjects in air tight jars. Many writer discus the tax law relevat to their discussing topics in their books.

Regards,

Awais

kamranACA · 03-11-2009, 10:15 PM

I am speechless.

awaisaftab · 03-12-2009, 07:46 PM

Consult the Book of Cost Accounting Of Matz Usry and read chapter of Direct Costing the writers discuss the tax issues also in the chapter. This is the example of Cost Accounting but there are many books of accounting where accountanats discuss tax laws and related issues in their books.

Regards

Awais

kamranACA · 03-12-2009, 08:59 PM

Dear,

I said I am speechless. If some body cannot understand what one should be doing except geting speechless?

Taxation has connection with accountancy in so far one has to provide for its impact and record the payment i.e. in so far it may affect the accounting records. However, selecting various options, preparing and submitting returns, understanding and interpretation of law, advisory, tax planning for short term and long run tenures, fighting for unjustified assesments at various appellate forums, revisions, ADRCs etc etc are quite different issues and call for entirely another spcialization. These have very meager impact on accounting.

I wonder if it is understandable.

Regards,