Tax Consultancy for CPEC Projects
Government of Pakistan approves attractive tax exemptions for Gwadar port operators which did not rule out the opportunity of tax consultancy for CPEC Projects.
CPEC has prioritized Gwadar Port from one of four major CPEC projects. These projects include Gwadar International Airport, Eastbay Expressway and the CPEC Free Zone.
Gwadar port will be developed by China Overseas Port Holding Company and afterwards it will also manage the port.
Brief Introduction to CPEC
China-Pakistan Economic Corridor (CPEC) is one of its kind pool of projects, these projects are mostly infrastructure projects. Originally CPEC projects are valued at 46 billion US Dollars which was revised later on at $62 billion.
CPEC will bring modernization in Pakistani infrastructure and surely strengthen Pakistan’s economy through construction of modern transportation systems, it also contain energy projects, and constitution of special economic zones.
Tax and CPEC Projects
Pakistan recently approved tax concessions for Chinese companies at Gwadar port and for the businesses that will operate / run business in Gwadar Free Zone.
This exemption has been extended for a period of 40 years and it makes Gwadar important in ‘One-Belt, One-Road’ strategic initiative.
The major projects in CPEC will enjoy exemptions from taxes such as income tax, excise, custom duties etc but on the same time establishments/ organizations will have to follow Income tax laws in Pakistan.
Tax Compliance in Pakistan
They may be exempt from income tax liability but they have to comply with and deduct/ collect taxes on payments they’ll make.
Simply speaking they will have to act as withholding agent and deduct/ collect withholding taxes as applicable in Pakistan.
Apart from deduction/ collection they will also have to report it to FBR (Federal Board of Revenue) through monthly withholding tax statements under section 165 and 149 of the Income Tax Ordinance, 2001.
Choose from our tax advisory services for all kinds of businesses operating in Pakistan.
You can send us your query or send us email at info@thebscon.com, call us at +92 321 8408828.