Section 59AA: Group Taxation

1[59AA. Group taxation.— (1) Holding companies and subsidiary companies of 100% owned group may opt to be taxed as one fiscal unit. In such cases, besides consolidated group accounts as required under the 2[Companies Act, 2017 (XIX of 2017)], computation of income and tax payable shall be made for tax purposes. (2) The companies in the group shall give irrevocable option for taxation under this section as one fiscal unit. (3) The group taxation shall be restricted to companies locally incorporated under the 3[Companies Act, 2017 (XIX of 2017)]. (4) The relief under group taxation would not be available to losses prior to the formation of the group. “(5) Where in computing the taxable income for any tax year, full effect cannot be given to a deduction mentioned in section 22, 23, 24 or 25 owing to there being no profits or gains chargeable for that year or such profits or gains being less than the deduction, then, subject to sub-section (12) of section 22, and sub-section (6), the deduction or part of the deduction to which effect has not been given, as the case may be, shall be added to the amount of such deduction for the following year and be treated to be part of that deduction, or if there is no such deduction for that year, be treated to be the deduction for that year and so on for succeeding years.” (5) The option of group taxation shall be available to those group companies which comply with such corporate governance requirements 1[and group designation rules or regulations] as may be specified by the Securities and Exchange Commission of Pakistan from time to time and are designated as companies entitled to avail group taxation. (6) Group taxation may be regulated through rules as may be made by the2[Board].

Effective date: 2001-09-13

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