Transport and logistics businesses in Pakistan are taxed in ways that other businesses are not. Tax on goods transport vehicles is collected with the motor vehicle tax, and freight and logistics services are taxed by the provinces. Fleet businesses also carry large fixed assets with their own records.
The points where tax and accounting rules come into play are numbered.
Numbered points are explained below.
At: Book loads
Tax deducted from your freight receipts may or may not be claimable, depending on how the income is already taxed. Customers who are prescribed persons deduct tax under section 153 when they pay for transport services, and where the income is already under the final tax on vehicles the treatment of that deduction needs checking.
We check the interaction for your income and claim what can be claimed.
At: Deliver across borders
Forwarding, courier and warehousing are taxed by the province, separately from the tax on vehicles. Services such as freight forwarding, courier, cargo handling and warehousing are taxable under provincial law, and which authority applies depends on where the service is provided.
We check the schedules for your services and the registrations you need.
At: Fuel and road taxes
For many transporters the tax paid with the token tax settles the income tax on that income, so it matters what it covers. Under section 234, income tax is collected with the motor vehicle (token) tax on goods transport vehicles, and for income from plying and hiring those vehicles it is generally treated as a final tax.
We separate that income from the rest in your return.
At: Maintain and replace
Without a record for each vehicle, depreciation and the tax collected cannot be supported. Each vehicle needs its own record of cost, depreciation, token tax and tax collected, and these records support the return and the statutory audit.
We set up vehicle-level records that serve both.
The return must separate income under the final tax on vehicles from other income.
Vehicle-level records support tax claims and depreciation.
Logistics companies are subject to statutory audit, and lenders financing fleets ask for audited accounts.
For income from plying and hiring goods transport vehicles, it is generally treated as final. Income from other activities, such as warehousing or forwarding, is taxed separately.
Generally yes, under the law of the province where the service is provided. We check the relevant schedule for your services.