CFAP – 05 Advanced Taxation

[Audio] About QR Codes: Under every slide, there is a QR Code, which leads to a video in which topic mentioned on slide has been explained. Each QR Code is unique and leads to a specific video. No app is required to scan QR Code. Just use your cell phone camera to scan it. A link will appear on your phone screen. Click / tap the link, which will take you to a YouTube video. About Study Material: Videos and study material has been designed to facilitate students of CFAP- 05 [ Tax Planning & Practices] of Institute of Chartered Accountants of Pakistan. Videos and study material are relevant only for June 2023 exam. Please note that links mentioned in description of videos will work only till 30th June 2023. To get maximum benefit from videos, follow the sequence of playlist. You can ask questions in comments section of relevant video. How to get soft copy of notes: This study material is available in soft form also. To get soft copy of notes, use your cell phone camera to scan above QR Code. No app required, just your phone camera. A link will appear on your phone screen. Click / tap the link, which will take you to a YouTube video. Follow the steps described in video. Download complete folder on your PC / MAC / Cell phone. Enjoy  ***** CFAP-05 | Tax Planning - June 2023.

[Audio] Specific Examinable Knowledge Reference Income Tax Income Tax Ordinance, 2001 Introduction and central concepts Sections 1 to 3, 4 to 8, 9 to 11, 74, 80 to 84 Computation of income of under normal tax regime, final tax regime, minimum tax regime and related tax liability Sections 12 to 40, 113, 113C, 168 to 169 Exemptions, tax concessions, losses, deductible allowances and tax credits Section 41 to 55, 56 to 59B, 60 to 60D, 61 to 65B, 65E to 65G Common rules, assets, principles of taxation and geographical source of income Section 66 to 73, 75 to 79, 86 to 100D, 101 to 101A Foreign source income of residents, taxation of permanent establishment, thin capitalization, avoidance of double taxation and anti-avoidance Sections 102 to 104, 105 to 106A, 107, 108 to 112 Returns, assessment, appeals, audit, penalties and offences Sections 114 to 119, 120 to 126, 127 to 136, 174 to 180, 182 to 204 Collection & recovery of tax, advance tax and final tax, refund of tax and withholding tax 137 to 146C, 147, 148 to 169, 170 to 171A, 231B to 236Q Others Sections 85, 172 to 173, 181 to 181D, 205 to 206A, 207 to 230I, 237 to 242, Schedules to the Income Tax Ordinance 2001 Income Tax Rules, 2002 Income tax rules relating to sections specified in Income Tax Ordinance. Relevant notifications, circulars issued under the Income Tax Ordinance, 2001 and rules made under therein and model double tax treaty ( country specific treaty not examinable). Sales Tax and Federal Excise Duty Sales Tax Act, 1990 Introduction, scope and payment of tax Sections 1 to 13, 73 Registration & de-registration, bookkeeping, Invoicing, records, returns and audit Sections 14 to 21A, 22 to 25AA, 26 to 29, 32A, 72B Administration, penalties, offences, appeals and recovery of arrears Sections 30 to 32, 33 to 40D, 45A to 47A, 48 Miscellaneous Sections 49 to 76, Schedules to the Sales Tax Act, 1990 Sales Tax Rules, 2006 Sales tax rules relating to sections specified in Sales Tax Act Common provisions of provincial / capital territory sales tax laws on services Relevant notifications, circulars and general orders issued under the Sales Tax Act, 1990 and rules made under therein Federal Excise Act, 2005 and Federal Excise Rules 2005 Introduction and definitions Section 1 to 2 Levy, Collection and Payment of Fed Section 3 to 18 Notifications, circulars and general orders under the Federal Excise Act, 2005 relevant to chapters I and II Ethics Code of Ethics for Chartered Accountants (revised 2019): Section 600.1 to 600.10, Section 600(Subsection 604) ***** CFAP- 05 | Tax Planning - June 2023.

[Audio] Study material has not been designed to meet all requirements of tax practitioners. A practitioner may find it deficient in some respects. ***** CFAP- 05 | Tax Planning - June 2023.

[Audio] It is imperative to classify practice material between what is important and what is not, so that it could be revised effectively before exam. CFAP level requires an in-depth understanding of the subject. Practicing 1 question 3 times is better than practicing 3 question for 1 time. Understand tricky areas properly. Dive into the scenario … you cannot make it, if you keep on swimming on surface. ***** CFAP- 05 | Tax Planning - June 2023.

[Audio] Understand difference between direct and indirect taxes. Which one is better from tax collector's point of view and from taxpayer's point of view. ***** CFAP- 05 | Tax Planning - June 2023.

[Audio] Permitted Books in Exam: Only the Original Book duly bound, bound addendum to the books from the same publisher and Clip version of Bare Laws shall be permitted. Bare Act, containing the history of amendments in the legislation, by way of foot notes are allowed in Examination Hall. However, Bare act which include commentary/ explanation on laws is not allowed in the Examination Hall. Finance Act or Ordinance, and notifications and circulars relating to Finance Act or Ordinance, issued four months prior to the month of examinations shall be considered forming part of the syllabus. The sole purpose of open book examination is to shift examinees' focus from "memorizing" to " understanding and application" Therefore, you need to eat, drink, move and sleep with bare Act/ Ord. Although legislation is never drafted like dictionary. Yet there is always a sequence and arrangement which is followed. Develop a mind map about what is written where in it. Memory and its retrieval is a two way process. Practice to retrieve what you learn. Tax law is about commercial scenarios. If you understand relevant commercial situation / transaction, then tax law becomes very easy to understand. So first understand transaction / situation addressed by tax law. Understand bigger picture first – the zoomed-out view and then then zoom-in carefully. ***** CFAP- 05 | Tax Planning - June 2023.

[Audio] A taxpayer can be responsible for any or all of following taxes: During tax year when; tax is withheld, as withholding agent by taxpayer, while making payments. This is not a tax on his own income. Advance tax is paid or deposited. After tax year; when taxpayer files return of income OR statement of final tax. Taxpayer's withholding tax is deposited with FBR, during the tax year, by some other withholding agent, which at time of filing of return is adjustable against tax payable or is final tax or is minimum tax. This will be discussed in detail in " Tax Regimes" While reading Income Tax Ordinance 2001, learn to locate provisions of withholding tax, advance tax and tax calculation at time of filing of return. That's how you can have a firm grip on Income Tax. ***** CFAP- 05 | Tax Planning - June 2023.

[Audio] Do not proceed to solve any income tax scenario unless you have correct answers to all of 6 basic questions. Any change / error in any one of these questions can invert the tax conclusions. ***** CFAP- 05 | Tax Planning - June 2023.

[Audio] Tax year is the time bracket for which tax is calculated. The concept of tax year is simultaneously applicable to tax laws as well. This simultaneous application will determine the relevant tax law which will be applied to financial year of taxpayer. ***** CFAP- 05 | Tax Planning - June 2023.

[Audio] Commissioner Inland Revenue, through a written order, can allow to change Tax year (TY) from normal TY to special TY or from special TY to normal TY or from one special TY to another special TY. Taxpayer can file review application to FBR. Decision of FBR shall be final. ***** CFAP- 05 | Tax Planning - June 2023.

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[Audio] Although there are so many common provisions of tax laws, yet these may differ for different type of person(s) It is imperative to identify which type of person you are going to solve. ***** CFAP- 05 | Tax Planning - June 2023.

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[Audio] Although there are so many common provisions of tax laws, yet these may differ for different type of person(s) It is imperative to identify which type of person you are going to solve. ***** CFAP- 05 | Tax Planning - June 2023.

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[Audio] The attribute of a person being " Resident" or " Non-resident" has a direct connection with attribute of income being " Pakistan Source Income" or " Foreign Source Income". ***** CFAP- 05 | Tax Planning - June 2023.

[Audio] FBR Circular No: 15 of 2022- 23 dated 21" July, 2022 Para 12: Definition of Resident Individual The scope of the definition of resident individual has been further expanded through insertion of clause (d) to section 82. Now a person being a citizen of Pakistan whose stay in any other country is not more than one hundred and eighty-two days during a tax year or who is not a resident taxpayer of any other country will also be treated as resident individual for the purpose of the Ordinance. ***** CFAP- 05 | Tax Planning - June 2023.

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[Audio] Further Discussion Video CFAP- 05 | Tax Planning - June 2023.

[Audio] Tax Regime is the most important aspect you need to understand about an Income. If an income is placed in an incorrect regime, entire calculation will become erroneous. Laws of taxation are different for every regime. Normal Tax Regime is the residuary regime. There is no list of income(s) to be taxed in this regime. Whereas for all other tax regimes and exempt income, tax law has given list of incomes to be taxed in each regime. To decide, whether an income is to be taxed or not to be taxed in Normal Tax Regime, you must know list of incomes to be taxed in other regimes. If an income is not listed / mentioned in list of exemptions or Final Tax Regime or Minimum Tax Regime, then it will be taxed in Normal Tax Regime. ***** CFAP- 05 | Tax Planning - June 2023.

[Audio] The attribute of a person being " Resident" or " Non-resident" has a direct connection with attribute of income being " Pakistan Source Income" or " Foreign Source Income". ***** CFAP- 05 | Tax Planning - June 2023.

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[Audio] Six basic questions can be located in Income Tax Ordinance 2001 by reading above sections in given sequence. Remember, your every learning about tax laws should have its roots in relevant Ordinance / Act. You must get a strong grip on it. ***** CFAP- 05 | Tax Planning - June 2023.