On 12 June 2020, Pakistan's Budget 2020-2021 was presented to parliament. One of the main tax measures is the introduction of a new restriction on the deduction of foreign profit on debt (interest) payable to associated enterprises by a foreign-controlled resident company (other than an insurance company, or a banking company) during a tax year. This includes that a part of the deduction will be disallowed according to the formula (B) – ((A + B) x 0.15), where:
- A is the taxable income before…