ISLAMABAD: The Federal Board of Revenue (FBR) has not granted any specific tax exemptions to foreigners, including Chinese companies under China Pakistan Economic Corridor (CPEC). Taxes imposed on imports and exports by Chinese industrialists are the same as for foreigners from other countries.
Certain exemptions in customs duty, sales tax and income tax are available for power generation sector, including coal, wind, hydel energy projects which are also not specific to the Chinese companies and could be availed by every person engaged in the construction of such power generation projects
“However, a number of exemptions from duties and taxes have been granted to Chinese companies engaged in the execution of CPEC projects including Income Tax exemption to China Overseas Ports Holding Company Limited, China Overseas Ports Holding Company Pakistan (Private) Limited Gawadar International Terminal Limited, Gawadar Marine Services Limited and Gawadar Free Zone Company Limited from Gawadar Port operations for a period of twenty-three years, with effect from the sixth day of February, 2007” sources at the FBR told Customs Today.
Likewise, sources said that exemption from customs duty, sales tax and federal excise duty (FED) on import of plant, machinery and equipment had been provided to the said companies. Exemption of interest income/profit on debt derived by any foreign lender any local bank having more than 75% shareholding of the Government or the State Bank of Pakistan, under a financing agreement with the China Overseas Ports Holding Company Limited, for a period of twenty three years with effect from the first day of July, 2016.
Similarly, the sources said that income tax exemption for income derived by China Overseas Ports® Holding Company Limited being dividend received from China Overseas Ports Holding Company Pakistan (Private) Limited, Gwadar International Terminal Limited Gwadar Marine Services Limited and Gwadar Free Zone Company Limited for a period of twenty-three years with effect from the first day of July, 2016. 22
“Exemption from minimum tax on turnover, is available to China® Overseas Ports Holding Company Limited, China Overseas Ports Holding Company Pakistan (Private) Limited, Gwadar International Terminal Limited, Gwadar Marine Services Limited and Gwadar Free Zone Company Limited for a period of twenty three years, with effect from the sixth day of February, 2007” the sources added.
Exemption from withholding tax of dividend is available to China” the source added saying that Overseas Ports Holding Company Limited, China Overseas Ports Holding Company Pakistan (Private) Limited, Gwadar International Terminal Limited, Gwadar Marine Services Limited and Gwadar Free Zone Company Limited for a period of twenty three years.
An exemption from customs duty, sales tax and withholding tax under section 148 of the Income Tax Ordinance, 2001 has been provided on import by M/s China State Construction Engineering Corporation Ltd. (M/s CSCEC); and M/s China Communication Construction Company (M/s CCCC) on plant, machinery and equipment including dumpers and special purposes motor vehicles for construction of Sukkur-Multan section of Karachi-Peshawar Motorway project and Karakorum Highway (KKH) Phase-II (Thakot to Havellian Section) of CPEC project respectively” the sources added.
The sources said that exemption from customs duty, sales tax and income tax on the import of machinery, apparatus, materials etc. imported for Lahore Orange Line Metro Project by China Railway Corporation had been provided.
The sources further said that that certain exemptions from customs duty, sales tax and income tax are available for power generation projects through coal, wind, hydal energy etc which were also not specific to Chinese companies and could be availed by every person engaged in the construction of such power generation projects.
