Attitudes to tax are changing. Organizations of all sizes are ever more exposed to new trends in tax regulation, not just locally but globally:

PKF F.R.A.N.T.S Chartered Accounants is at the forefront of an evolving tax landscape

Rapidly changing tax environment across the globe has enhanced focus on the effective and efficient management of the taxes both globally and locally. In this new era understanding the tax impact on business operations and transactions in multiple jurisdictions is vital for a company’s survival.

Tax function role has gone miles ahead from managing and optimizing an organization’s tax impact and as tax advisor to managing the global tax exposure and as business advisor.

Effective and efficient tax services provide competitive advantage by lowering the tax and administrative costs yet keeping your business compliant with the tax laws and regulations.

Our industry professionals have vast and extensive function knowledge that is accompanied by technical proficiency and strong relationship with our business partners. We understand the industry needs and business issues that our business partners face which help us formulating business feasible and tax compliant solutions for them.

We offer a wide range of tax services including corporate and individual planning and compliance, as well as global projects that involve designing and implementing tax strategies to help produce sustainable long term tax saving.

Indirect Tax

We have established a practice to meet clients’ needs providing a wide range of indirect tax services.

Sales Tax is a tax on value addition and a multi-point tax, which is levied at every stage of sale. Sales Tax encompasses the entire value addition process and supply chain partners. In view of that its importance to business has phenomenally increased.

Federal Excise Duty is a levy on manufacturing sector as well as on services sector.

After 18th Amendment to the Constitution of Pakistan, provinces have been given right to levy tax on services in their territorial jurisdiction. Consequently, scope of indirect taxes and its importance has increased manifolds.

In Pakistan there are four provinces and a capital territory and all the provinces and the capital territory have enacted their own piece of legislation for services taxation.

To meet the compliance and regulatory requirements and be tax efficient at the same time is a daunting tasks for the businesses.

We assist the business in fulfilling this task.

Indirect Tax Laws in Pakistan comprises of:

  • Sales Tax Act, 1990
  • Federal Excise Act, 2005
  • Sindh Sales Tax on Services Act, 2011
  • Punjab Sales Tax on Services Act, 2012
  • Khyber Pakhtunkhwa Sales Tax on Services Act, 2013
  • Baluchistan Sales Tax on Services Act, 2015
  • Islamabad Capital Territory Sales Tax on Services Ordinance, 2001.

How can we add value?

Strategic Level

Developing detailed planning strategies (including industry specific issues) to help reduce clients’ administrative and tax costs from indirect taxes which interiliac includes.

  • Identification of tax efficient and effective planning opportunities.
  • Formulating indirect tax efficient business models.

Operational level

  • Advising on the sales tax/excise duty treatment / disclosures under periodic tax returns and potential liabilities of specific transactions.

Advisory Level

  • Advice on classification, valuation, applicability of taxes on transactions and admissibility to tax benefits/exemptions.
  • Opinions on indirect tax issues.

Tax Health Check and Due Diligences

  • Carry out diagnostic health check analysis from a tax perspective.
  • Buy-side and sell-side tax due diligence for strategies acquisitions and disposals.
  • Ascertaining the tax liabilities (if any) that affect the financial performance of the entity, once the investment or disinvestment has been concluded.

Litigation

  • Assisting clients on disputes with tax authorities including representation before tax and appellate authorities and liaison with lawyers in appeals before the High Court and Supreme Court

International Tax Services

Are you ready to go global?

Managing international tax profiles matters for any international player whether a veteran or simply testing cross-border opportunities. Tax laws change frequently- but to succeed in today’s global marketplace it is not enough to simply adapt to the tax requirements of each jurisdiction in which you operate.

Companies must be forward thinking and anticipate or understand the potential short- and long-term consequences of tax planning decisions at a coordinated, global level and in the context of their wider business objectives.

Company executives should be asking:

•  Where should they locate?
•  What are the tax costs and benefits of entering into a new market?
•  Which entity should be used?
•  What are the tax regulatory requirements?
•  How should operations be financed?
•  What is the impact to the effective global tax rate?

Additionally, frequent changes to tax legislations and greater scrutiny of tax structures now also require executives to:

•  Ensure that their tax planning remains appropriate given changes in business operations and consistent with the company’s culture
•  Keep track of frequent changes in tax law in multiple jurisdictions
•  Manage compliance and internal control requirements
•  Address greater scrutiny of tax decisions by an increasing range of regulators

How we can help:

Our team can help you avoid the pitfalls and seize tax opportunities by helping you manage the complexities of multiple tax systems and international regulations around the world.

We address your concerns with an international mindset. We have helped several clients plan expansion and implementation of tax structures across the Middle East, Africa, Asia and Europe.

Our services include:

•  International tax planning for business change, expansion into new jurisdictions and cross border transactions
•  International group restructuring
•  Coordination of international tax reporting and global compliance management
•  Group tax health checks
•  Global capital structure planning, including efficient cross-border finance, repatriation and cash access planning

Merger and Acquisition

Looking for synergies

Closing a successful deal efficiently requires a calculated approach to address the potential tax implications of a merger or acquisition. Business today is under increasing pressure to deliver better results for stakeholders. Whether you’re buying, selling, partnering, funding or fixing a company, the process can be complex and risky.

We can help add value well beyond traditional tax compliance and due diligence by focusing on opportunities that arise within, and because of an acquisition.

How we can help:

We can assist you through the following stages:♣

  • Conceptualization
    • Have detailed objectives
    • Gain an understanding of the long-term approach
    • Conceptualize on structures based on desired business objectives
    • Review business plans from a tax and regulatory perspective
  • Management discussions
    • Gain an understanding of the management concerns
    • Provide a trusted approach
    • Conduct a SWOT analysis
    • Pre-deal evaluation
  • Devising structure options
    • Devise tax efficient structures in line with desired operating and financial controls.
    • Analyzing the industry trends and evaluating feasibility of the available options.
    • Starting the critical path towards a desired structure.
      ♣
  • Evaluation/due diligence
    • Assist in adopting a global approach to uncover tax risks and in identifying existing exposures in the various approaches.
    • Reviewing and considering tax provisions in contracts.
      ♣
  • Regulatory approval
    • Assist in obtaining regulatory approvals for establishing or consummating the transaction structure.♣
  • Execution
    • Transaction implementation
    • Contract assistance from tax perspective
    • Negotiation support in completion phases
    • Thorough project management
      ♣
  • Integration
    • Foster smooth tax integration through utilization of accumulated tax losses and fiscal incentives.
  • Post deal support
    • Facilitate completion of regulatory formalities.
    • Post-closure discussions with the management and its advisors.

Our key service offerings:

Our M&A tax team handles conceptualization and implementation of M&A deals with respect to the following:

  • Acquisition/divestment structuring
  • Corporate restructuring: merger, demerger, business/asset sale
  • Capital reduction, buyback, balance sheet right sizing
  • Inbound or outbound acquisition, sale of shares/business.

In addition, we conduct tax due diligence, provide negotiation support and offer structuring and documentation review for private equity, strategic and financial deals.

We also work closely with family and promoter driven businesses and help in the areas of succession, next generation handover, governance, growth, exit strategies and wealth preservation.

Tax Compliance and Management

Compliance failure can result in reputational and financial risk which can tarnish strategic vision and mission.

We support local and international businesses to achieve their business goals in a most competitive manner. Understanding their business operations and transactions in multiple jurisdiction is of prime importance for a company’s survival in the competitive age.

We provide full range of services to meet their business needs from tax advisory, consulting and cross border restructuring by analyzing the best possible strategies that meet their business objectives through analyzing tax and regulatory implications of transactions and finally implementation assistance, from the perspectives of domestic law and the international tax treaty network.

How we can add value to your business:

Strategic level

  • Guiding on tax effective and efficient strategies for both inbound and outbound investments.
  • Advising on the planning opportunities presented by domestic tax laws and international treaty network.
  • Tax savings through structural reorganization in the shape of acquisition, divestment and mergers.

Tactical level

  • Analyzing the business structure in light of the business goal.
  • Conceptualization of tax optimum business structure to meet the business needs and to provide competitive advantage.
  • Implementation of the structure envisaged considering the business needs for restructuring from a tax and regulatory point of view.

Operational level

  • Tax return preparation and its filing with tax authorities.
  • Representation services before the tax authorities including assistance in tax audits by the tax authorities.
  • Assistance in appeal proceedings and tax litigation support.
  • Tax withholding advisory.
  • Review of tax status and evaluation of tax exposures.
  • Approval of retirement benefit funds from taxation authorities and other related matters thereto.

Advisory Level

  • Advice on various domestic as well as international tax matters including cross-border transactions.
  • Advice from a tax perspective in respect of
    agreements to be entered into by various parties.
  • Advice on withholding tax obligations on payments to residents/non-residents.
  • Tax advisory for positions to be adopted in the tax return.
  • Advice on permanent establishment exposure and its tax impact.
  • Advising on repatriation strategies.
  • Review of operations and analyze the impact of Base Erosion and Profit Shifting (BEPS) measures.

Tax Health Check and Due Diligences

  • Carry out diagnostic health check analysis from a tax perspective.
  • Buy-side and sell-side tax due diligence for strategic acquisition and disposals.
  • Ascertaining the tax liabilities (if any) that affect the financial performance of the entity, once the investment or disinvestment has been concluded.

Litigation

  • Assisting clients on disputes with tax authorities including representations before tax and appellate authorities and liaison with lawyers in appeals before the High Court and Supreme Court.

Trade and Customs

Whether you’re a global organization seeking to enter into the Pakistan market or a local business expanding your reach to new markets, we understand the challenges you face.

We work with clients to deliver value and efficiency for their business, including:

  • Establishing and maintaining tax efficient cross-border operations, keeping costs down to maintain strategic advantage.
  • Ensuring compliance with local tax laws and regulations associated with cross-border trade.
  • Customizing trade processes and controls for a business unit, company, or industry for tax efficiency.
  • Mitigating tax risk issues related to conducting cross-border business.

How we can add value:

  • Logistics planning for potential savings in tax and other costs relating to customs and excise duties and indirect taxes.
  • Valuation planning to highlight duty saving opportunities by looking at transfer pricing strategies.
  • Advising client on how they can take advantage of simplified customs procedures and different regimes of customs as applicable under concessionary customs notifications, warehousing schemes, temporary import schemes, duty and tax remission for exports, etc.
  • Identification of Harmonized System Codes of the imported goods and advising on applicable rates of customs duty and other import related levies.
  • Advising on industry specific tax issues in view of Import and Export Policies and Trade Policy of Government of Pakistan.
  • Assisting clients in lodging claims of duty drawbacks.
  • Advising on trade and duty concessions under Preferential / Free Trade Agreements with specified countries.