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BUSINESS TAX PLANNING IN PAKISTAN
BUSINESS TAX PLANNING
Business tax planning involves analyzing a company’s financial situation or strategy from a taxation perspective. Tax planning is persistently aimed at ensuring tax efficiency. Using tax planning, all foundations of the financial strategy are coordinated in the most tax-efficient way.
TAXOCRATE’s tax practice combines over four decades of experience in dealing with Pakistan’s tax laws. Tax professionals can identify solutions to business problems across a variety of sectors, as well as objectively analyze other people’s solutions.
As an experienced team of tax planning and compliance experts, we serve both Pakistani and international clients with sound, dependable and cost-effective services. Our headquarters are located in Lahore and we deliver our services across the nation, including capital cities like Karachi, Islamabad, and Rawalpindi. Our team of experts goes that extra mile – establishing credibility with tax authorities while keeping track of the frequent changes and amendments to tax laws to maintain the TAXOCRATE value proposition. Furthermore, we ensure our clients are not left in the dark, informing them about important changes in Pakistan’s tax laws and reminding them about impending deadlines through frequent tax alerts, reminders, and a tax calendar.
PAKISTAN'S BUSINESS TAX PLANNING PROCESS
Planning for taxes involves taking into account various tax options and determining when, whether, and how to conduct business and personal transactions to minimize or eliminate taxes.
Particularly if you own a small business, there are countless tax planning strategies available. Some are targeted at your own tax situation, while others are directed at the business as a whole. Tax strategies, however simple or complex, are based on structuring transactions to achieve one or more of these often overlapping objectives:
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AN ESSENTIAL COMPONENT OF THE OVERALL FINANCIAL PLAN
Taking care of your finances during the year can help you reduce your taxes and achieve your financial goals. This guide provides information about tax rates, credits, deductions, and related considerations that may affect you.
You should not plan your taxes in isolation, but rather integrate them with your overall financial plan based on your financial goals. Developing and implementing appropriate strategies to reduce or shift current and future tax liabilities can improve your prospects for long- and short-term success. A detailed projection of income taxes for the upcoming year, for example, may be able to assist you in determining the cash flow available to you.
It is important to keep in mind that tax laws are often complex and frequently change. Before making investment or tax decisions, you should consult your tax advisor.
TAX PLANNER SERVICES
While managing slightly, tax can be an incredibly nerve-wracking and possibly precarious aspect of work. However, full compliance and good retention can both be achieved with expert knowledge and careful planning.
We will make the most of your individual situation as a widely-recognized industry leader in tax planning. We offer the following services:
THE FINANCIAL PLANNING PROCESS FOR CONSULTANTS
By leveraging local government benefits and your personal financial situation, you can maximize your income.
TAX COMPLIANCE
Surely the most important aspect of any overseas contract is to remain fully compliant in the eyes of your host country. By planning ahead and taking care of your local tax return for you, we ensure that this is always the case.
TAXATION OF EXPATRIATES
From a tax perspective, contracting abroad offers a number of advantages, but you must be sure to remain compliant both in your host country and at home.
ISSUES RELATED TO OFFSHORE TAXATION
In regard to offshore tax, there are a number of misconceptions and inaccuracies that are often repeated. Depending on your circumstances, there may be widely divergent laws in effect and varying advantages, but detailed local knowledge and attention to detail are required: There is no “one-size-fits-all” answer.
We can assist you in taking advantage of advantageous tax situations, thus avoiding the common pitfalls of international taxation. You can rely on us to give you guidance throughout the entire process of signing your contract, and we will take every detail into consideration so that your retention and compliance are maximized.
Our company can assist with anything you may be unsure about, from a simple question to a complex project. Contact us if you have any doubts, and we will assist you.
ADVICE AND ISSUES RELATED TO OFFSHORE TAXATION
There has been a great deal written over the years about offshore taxation, offshore bank accounts, offshore trusts, offshore payments, and offshore tax havens. When dealing with any of these issues, it is certainly worth thinking very carefully before entering into an offshore tax planning arrangement.
As a starting point, it is important to clarify that only a limited number of individuals are actually employed offshore in the Oil and Gas industry – and they are typically working on oil platforms or in similar locations. Those whose issues fall within this category should consult a specialist who is familiar with tax law.
The majority of offshore facilities are used to reduce taxes, which on the surface seems like a good thing, but the methods used don’t often meet the local or international tax compliance requirements. For example,
Offshore trusts have been legally used in the past from the UK, for an individual working in the UK and adhering to all of the relevant UK tax rules for Trusts. If, however, the individual then moves to a contract in Afghanistan, India, Pakistan, EU Member Country, or the Middle East and is working in (and therefore under the jurisdiction of) that country, the same tax rules for trusts will not apply, and therefore income going into the trust may be viewed as fully taxable. This will result in an additional tax bill, on top of the cost of the trust.
It is important to maintain tax compliance when working abroad (or at home) – but many offshoring opportunities can work against that compliance when viewed in a broader context.
You can legally do things to minimize your tax liability and ensure that your tax compliance is managed effectively.
Please contact our international tax planning specialists for appropriate advice, and allow us to structure a solution that meets your needs.
TAX COMPLIANCE INTERNATIONALLY
It doesn’t matter whether you are working on a contract overseas or in your home country, some things remain the same. Where money is earned, the tax will be due. It is, however, a complex process to ensure compliance with the relevant tax legislation – particularly when there are multiple countries and tax authorities involved.
For example, you should be aware of tax compliance issues, such as
- The 180-day rule and tax residency;
- Working country tax legislation;
- Regulations and restrictions for offshore ex-pats;
- Interactions between domicile rules and contract/assignment length;
- Tax-efficient ways to manage your international earnings.
When you move to a new country of work, it is not enough to carry on as you did at home. Tax authorities rarely apply the same regulations, and ignorance of local tax laws is not a defense. Therefore, to ensure your international tax compliance, it is important that you and your agency understand the issues involved.
TAXOCRATE Understands the Issues of International Tax Compliance
TAXOCRATE understands the issues of international tax compliance. To ensure that you have peace of mind when you are working abroad, we simplify the international taxation compliance planning process for our clients and provide local expertise and international tax experience. In order to receive appropriate advice, we recommend contacting our international tax planning specialists.
