CAF-2 · Chapter 13 · Question 9 of 15
Mr. Smith, a UK national, comes to Pakistan solely for employment purposes and stays for two years, making him a resident individual. He earns rental income from a property in London, which is deposited into his UK bank account. Is this rental income taxable in Pakistan?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) No, it is exempt because he is a short-term resident and the income is not brought into or received in Pakistan.
Explanation
The foreign-source income of a short-term resident individual (present for not exceeding three years and resident solely for employment) is exempt, provided the income is not derived from a business established in Pakistan or brought into/received in Pakistan.
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