Dividends
Tax and withholding on profit distributions.
Menu
Company decisions have tax consequences that are easy to miss: issuing shares, paying dividends, restructuring a group, transferring assets, borrowing from a foreign parent or paying a foreign vendor. Our corporate tax advisory gives boards and CFOs clear, written advice on these decisions before they are made.
A company's most expensive tax mistakes are usually made in the boardroom rather than the accounts department: a dividend declared without considering withholding, an asset moved within a group without checking the conditions for relief, or a loan from a foreign parent priced without regard to the rules.
Under the Income Tax Ordinance, 2001, many corporate transactions carry specific tax rules. Dividends are taxed separately from company profit and are subject to withholding when paid. Transfers of assets between wholly owned group companies, and disposals under schemes of arrangement and reconstruction, can be tax-neutral under sections 97 and 97A if their conditions are met. Payments to non-residents, such as interest, royalties and fees for technical services, carry withholding under section 152, subject to treaty relief. Transactions with associated persons must be at arm's length under section 108, and foreign-controlled companies need to consider the thin capitalisation rules in section 106.
We also advise on the interaction between tax and company law: the tax effect of share allotments, transfers and buy-backs, changes in shareholding that may affect losses or group relief, and the documentation SECP and FBR each expect. Our advice is written for decision-makers, stating the facts relied on, the law, the conclusion, the risks and the actions required.
Timing is the key to useful corporate advice. We ask to see a transaction while it is still a proposal: the draft board resolution, term sheet, loan agreement or scheme document. That allows the tax analysis to shape the terms, for example who bears withholding on a foreign payment, how consideration is described, or which conditions must be met for relief. Once the decision is taken, we help implement it, so that deductions are made, filings are completed and records match what the board approved.
Corporate tax advisory answers specific company questions. For an overall plan, see corporate tax planning. The SECP side of transactions is handled by our share transfer and share allotment teams, and our company valuation service supports transactions where value must be established.
A fixed fee per question or transaction, or a retainer for regular board support.
Tax and withholding on profit distributions.
Transfers and reconstructions under sections 97 and 97A.
Allotments, transfers and buy-backs.
Withholding and treaty relief under section 152.
Arm's length analysis under section 108.
Debt, equity and thin capitalisation.
Tax sections for board and audit committee papers.
Finance Act changes for your company.
Each of these is easier to prevent than to defend.
Failure to deduct makes the company liable under section 161.
We confirm withholding.Group transfers that fail section 97 conditions can be taxed as disposals.
We check conditions.Payments to non-residents carry obligations under section 152.
We apply treaty rules.Related-party deals can be adjusted under section 108.
We document pricing.Foreign-controlled companies face thin capitalisation limits.
We review financing.Corporate changes not reflected in tax records cause problems.
We align both.Ideally before the board meets.
You tell us the decision or transaction.
Scope, timing and fee confirmed.
Facts, documents and law reviewed.
Written advice for the board.
Filings, withholding and records handled.
Board-level tax decisions.
Restructuring and intra-group transactions.
Payments to parents and treaty relief.
An adviser for difficult questions.
Share issues and funding rounds.
Succession and profit distribution.
We combine tax, accounting and corporate law qualifications, and we write for decision-makers.
Clear, written conclusions.
ACCA and ICAP Chartered Accountant qualifications and an FBR-registered income tax practitioner.
LLB-qualified advocate on company law questions.
Both sides of a transaction handled.
International tax team for foreign parties.
Agreed per question or transaction.
Have a question that is not here? Send it to us on WhatsApp and we will reply the same day.
Tell us what the board is considering. We will confirm the scope, timing and a fixed fee for written advice.
Book your free consultationThis page is general information about our services, not tax, legal or financial advice for your specific situation. Laws, rates and deadlines change with each Finance Act and official notification.