CAF-2 · Chapter 13 · Question 10 of 15
Mr. Tariq, a citizen of Pakistan, returns to Pakistan in Tax Year 2026 to permanently settle after living in the UAE for 6 years. He was a non-resident in Pakistan for all 6 preceding years. He sets up a business in Dubai that generates foreign-source income. For which tax years will this foreign-source income be exempt in Pakistan?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) Tax Year 2026 and Tax Year 2027.
Explanation
Any foreign-source income derived by a citizen of Pakistan who was not a resident individual in any of the four preceding tax years shall be exempt from tax in the tax year in which the individual became a resident and in the following one tax year.
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