Corporate - Corporate residence

Last reviewed - 01 January 2021

A company is resident in Pakistan if it is incorporated or formed by or under the law of Pakistan or if the control and management of its affairs is situated wholly in Pakistan in that year.

The term ‘company’ includes a trust, a cooperative society, a finance society, or any other society established or constituted by or under any law; a corporate body incorporated outside Pakistan; and any foreign association, incorporated or unincorporated, that the Central Revenue authorities may declare to be a company.

Permanent establishment (PE)

A PE is a place of business through which the business of a non-resident is wholly or partly carried out. In particular, PEs are a place of management, branch, office, factory or workshop, premises for soliciting orders, warehouse, permanent sales exhibition, or sales outlet, except a liaison office; mines and other places of extraction of natural resources; a building site, a construction, assembly, or installation project, or supervisory activities connected with such site or project if such activity continued for more than 90 days within any 12-month period; or an agent acting on behalf of the company who has and habitually exercises authority to do business on behalf of the company, including furnishing of services.

The definition of a PE provided in a double tax treaty (DTT) will prevail in cases where a DTT is executed by Pakistan with the related country of origin of the PE.