International tax law is applicable to the taxing of activity that takes place in two or more countries in form of international tax agreements between two or more countries, are also known as income tax treaties, or tax conventions or double taxation agreements or DTAs. International tax law also exists in domestic tax laws that consider the jurisdiction to tax entities, and that concern the taxation on foreign income of residents, domestic income of non-residents and cross-border transactions.
A global business can become entangled in a complex web of tax rules and regulations in unfamiliar territories. We can help align your tax strategies with your business needs, meeting compliance obligations wherever they arise. Similarly, governments and tax authorities around the world are responding to globalization, economic uncertainty and the connected economy by imposing tighter trading rules and pursuing tax revenues with ever more determination.
Multinational organizations now face more and more demands from different jurisdictions as individual authorities endeavor to collect taxes on cross-border activities. At ZA-LLP, we believe that dedicated international tax professionals are best equipped to tackle these demands, as well as uncover planning opportunities that can lead to enhanced financial performance.
BROAD CAPABILITIES
Our professionals focus on the critical field of transfer pricing, providing services ranging from comprehensive supply chain restructuring to transfer pricing planning to controversy management to aiding in compliance with documentation requirements.
FOREIGN TAX DESKS
The ZA-LLP foreign tax desk programme has revolutionized the provision of international tax services. Professionals serving on desks work side-by-side with colleagues on similar rotations, creating a dynamic, team-based environment that fosters the development of truly integrated planning solutions – whenever and wherever they are needed.
SCOPE OF PRACTICE
ZA-LLP’s tax practice group, under the aegis of Sr. Partner, Dr. Zafar, advises clients in virtually all areas of domestic and international taxation, including income taxation, corporate taxation, real estate taxation, intellectual property taxation and value-added tax. We specialize in developing creative solutions to complex problems inherent in structuring cross-border commercial, investment and technology transfer transactions, making full use of the global network of double-taxation treaties and off-shore tax solutions. We have assisted both domestic and foreign multinationals in resolving sensitive tax-related issues both in Pakistan and around the globe. We have developed a network of international taxation experts around the globe with whom the tax practice group regularly consults regarding foreign tax ramifications on cross-border deals. Representation also extends to tax and other investment incentives under national, regional and multilateral regimes. ZA-LLP’s representation extends to all relevant tax authorities as well as to both civil and white-collar litigation in the courts.
Lawyers in the Firm’s International Tax group routinely advise clients with respect to the extraterritorial aspects of Pakistan income taxation, both in connection with the Firm’s transactional work for business and individual clients, and as special tax counsel to smaller law firms with an international business practice and in other situations. We advise clients on the Pakistan tax consequences of numerous cross-border transactions and assist in structuring inbound and outbound business and financial relationships.
EVOLUTION OF TAX CULTURE
Let’s take a look at the insight as given by Dr. Zafar, Senior Partner on Evolution of Tax Culture for the Revival of Economy “The very issue of tax and its administration vis-à-vis economy is not only the concern of this gathering or that of our country alone falling in the category of developing countries, this is very much crucial and highly debatable topic even in the United States and other developed countries of this globe.” Paper read during National Tax Conference at Karachi on Feb. 21-22, 2003.
The following are among the areas where members of the International Tax group have advised foreign and domestic clients:
- Investments in hybrid and specialized foreign and domestic securities
- Cross-border joint ventures and global strategic alliances
- Asset purchase and sale transactions within and outside Pakistan
- Cross-border licensing
- Pakistan and foreign branch operations
- Pakistan and foreign purchasing transactions
- Cross-border equipment leasing transactions
- Investments in foreign and domestic real estate
- Domestic and foreign project finance transactions
- Transactions involving emerging markets including former Soviet Bloc countries
- Cross-border transfers of employees
- Tax aspects of international philanthropy
- Cross-border aspects of e-commerce and transfers of intangibles
Members of the International Tax group also work closely with the client’s other advisors, including in-house counsel and accountants, public accountants and investment bankers. Our lawyers also have established good working relationships with tax professionals in many foreign countries, including law firms, accounting firms and tax consulting firms and work with such foreign professionals as needs dictate.
AGREEMENTS AS TO AVOIDANCE OF DOUBLE TAXATION
The Government of Pakistan has so far signed agreements to avoid double taxation with 64 countries including almost all the developed countries of the world. These agreements lay down the ceilings on tax rates applicable to different types of income arising in Pakistan. They also lay down some basic principles of taxation which cannot be modified unilaterally. The list of countries with which Pakistan has concluded tax treaties is given below:
| AustriaAzerbaijanBahrainBangladeshBelarausBelgiumBosnia HerzegovinaBruneiCanadaChinaDenmark | EgyptFinlandFranceGermanyHungaryIndonesiaIranIrelandItalyJapanJordan | KazakhstanKorea (Republic of)KuwaitKyrgystanKenyaLebanonLibyaMalaysiaMaltaMauritiusMorocco | NepalNetherlandsNigeriaNorwayOmanPhilippinesPolandPortugalQatarRomaniaSaudi Arabia | SerbiaSingaporeSouth AfricaSpainSri LankaSwedenSwitzerlandSyriaTajikistanThailandTunisia | TurkeyTurkmenistanUkraineUnited Arab EmiratesUnited KingdomUnited StatesUzbekistanVietnamYemen |
Table: Consulates Abroad
Members of the International Tax group have assisted clients in connection with controversies involving international tax issues before the Central Board of Revenue. Working with members of the Firm’s Individual Clients Department, lawyers in the International Tax group regularly assist in estate, family and business planning structures for expatriates, nonresident aliens and Pakistani citizens with foreign family and business interests.
Our tax lawyers are well conversant that how the multinationals’ international transactions are taxed in Pakistan. They deal with the matters of banking sector, non-resident companies, petroleum / gas exploration companies, pharmaceuticals, telecommunication, satellite TV channels and mobile phone companies. Our legal experts are capable to examine international transactions of permanent establishments with particular reference to e-commerce, e-communications, electronics / computer softwares, splitting of contracts and determination of beneficial ownership and attribution concepts of investment income. The Federal Board of Revenue (FBR) of Pakistan is going to reform International Tax Rules and our advisors are keenly watching the changes to be made so that all the effectees may not suffer more than their due share. Although the complexity and inconsistency of the International Tax Law in Pakistan annoy the executives of multinational companies but our tax lawyers have the expertise to soothe their displeasure.