Withholding Tax Card 2016/2017: bonus shares issued by companies not quoted on stock exchange
KARACHI: Federal Board of Revenue (FBR) has updated withholding tax on bonus shares issued by companies not listed on stock exchange during 2016/2017.
Bonus shares issued by companies not quoted on stock exchange under Section 236N of Income Tax Ordinance, 2001.
Sub-Section (1): Notwithstanding anything contained in any law for the time being in force, every company, not quoted on stock exchange, issuing bonus shares to the shareholders of the company, shall deposit tax, within fifteen days of the closure of books, at the rate of five percent of the value of the bonus shares on the first day of closure of books, whether or not tax has been collected by the company under sub-section (3).
Sub-Section (2): Issuance of bonus shares shall be deemed to be the income of the shareholder and tax deposited under sub-section (1) shall be treated to have been deposited on behalf of the shareholder.
Sub-Section (3): A company liable to deposit tax under sub-section (1), shall be entitled to collect and recover the tax deposited under sub-section (1), from the shareholder, on whose behalf the tax has been deposited, before the issuance of bonus shares.
Sub-Section (4): If a shareholder neither makes payment of tax to the company nor collects its bonus shares, within three months of the date of issuance of bonus shares, the company may proceed to dispose of its bonus shares to the extent it has paid tax on its behalf under sub-section (1).
Sub-Section (5): Tax paid under this section shall be a final tax on the income of the shareholder of the company arising from issuance of bonus shares.
Sub-Section (6): The Board may prescribe rules for determination of value of shares under sub-section (1).