Government of Pakistan
Ministry of Finance, Economic Affairs,
Statistics and Revenue Division
Islamabad, July 1, 2004
Circular No. 06 of 2004
(Capital Value Tax)
Subject: COLLECTION OF CAPITAL VALUE TAX BY A REGISTERED STOCK EXCHANGE ON PURCHASE OF SHARES.
A registered stock exchange in Pakistan shall collect Capital Value tax (CVT) at the rate of 0.01%, with effect from July 1, 2004, of the purchase value of any modaraba certificates or any instrument of redeemable capital as defined in the Companies Ordinance, 1984 (XLVII of 1984), or shares of a public company listed on a registered stock exchange in Pakistan transacted through its automated trading system in ready, future, provisional and any other counter(s).
2. Any purchase of shares carried by the brokerage houses and/or their agents either manually and/or through electronic system including matching of orders in any internet based trading system and not routed through the stock exchange automated system, shall also be liable to be taxed at the same rate. The member concerned of the stock exchange shall collect CVT from its clients, and together with tax on proprietary trading, if any, shall pay tax on such purchases alongwith the statement specified in para 4 of this circular to the stock exchange. In case of no transactions, a nil statement shall be submitted by the member concerned.
3. Non-resident persons/institutions seeking refund shall file their claims with the taxation officer holding jurisdiction in their case together with supporting document(s) and bill(s) from concerned member of stock exchange. All bills issued by the member of stock exchange should clearly indicate the amount of CVT on such purchases.
4. The amount of tax collected shall be deposited on 25th of each month into govt. treasury. The copy of paid challan alongwith the following statement shall be forwarded to the CIT concerned holding jurisdiction over the concerned stock exchange.
STATEMENT REGARDING COLLECTION OF CAPTAL VALUE TAX UNDER CLAUSE (E) OF SUB-SECTION (2) OF SECTION 7 OF FINANCE ACT 1989 (V of 1989).
NAME OF REGISTERED STOCK EXCHANGE __________________________
STATEMENT FOR THE MONTH _________________________________
S.No. Name of the Member/Broker Amount of Total Purchases of shares CVT collected Date of payment into govt. treasury.
(Farooq A. Nasir)
Secretary (Other Taxes)