ITO Section 172

Representatives.

(1) For the purposes of this Ordinance and subject to sub-sections (2) and (3), “representative” in respect of a person for a tax year, means –

• (a) where the person is an individual under a legal disability, the guardian or manager who receives or is entitled to receive income on behalf, or for the benefit of the individual;
• (b) where the person is a company (other than a trust, a Provincial Government, or  [Local Government] in Pakistan), the principal officer of the company;
• (c) where the person is a trust declared by a duly executed instrument in writing whether testamentary or otherwise (including any Wakf deed which is valid under the MussalmanWakf Validation Act, 1913 (VI of 1913)), any trustee of the trust;
• (d) where the person is a Provincial Government, or  [Local Government] in Pakistan, any individual responsible for accounting for the receipt and payment of moneys or funds on behalf of the Provincial Government or  [Local Government];
• (e) where the person is an association of persons, the principal officer of the association or, in the case of a firm, any partner in the firm;
• (f) where the person is the Federal Government, any individual responsible for accounting for the receipt and payment of moneys or funds on behalf of the Federal Government; or
• (g) where the person is a public international organisation, or a foreign government or political sub-Division of a foreign government, any individual responsible for accounting for the receipt and payment of moneys or funds in Pakistan on behalf of the organisation, government, or political sub-Division of the government.

(2) Where the Court of Wards, the Administrator General, the Official Trustee, or any receiver or manager appointed by, or under, any order of a Court receives or is entitled to receive income on behalf, or for the benefit of any person,such Court of Wards, Administrator General, Official Trustee, receiver, or manager shall be the representative of the person for a tax year for the purposes of this Ordinance.

(3) Subject to sub-sections (4) and (5), where a person is a non-resident person, the representative of the person for the purposes of this Ordinance for a tax year shall be any person in Pakistan –

• (a) who is employed by, or on behalf of, the non-resident person;
• (b) who has any business connection with the non-resident person

[Explanation.— In this clause the expression “business connection” includes transfer of an asset or business in Pakistan by a non-resident;]

• (c) from or through whom the non-resident person is in receipt of any income, whether directly or indirectly;
• (d) who holds, or controls the receipt or disposal of any money belonging to the non-resident person;
• (e) who is the trustee of the non-resident person; or
• (f) who is declared by the Commissioner by  [an order] in writing to be the representative of the non-resident person.

(4) A bonafide independent broker in Pakistan who, in respect of any transactions, does not deal directly with, or on behalf of, a non-resident principal but deals with, or through a non-resident broker, shall not be treated as a representative of the non-resident principal in respect of such transactions, if –

• (a) the transactions are carried on in the ordinary course of business through the first-mentioned broker; and
• (b) the non-resident broker is carrying on such transactions in the ordinary course of its business and not as a principal.

(5) No person shall be declared  as the representative of a nonresident person unless the person has been given an opportunity by the Commissioner of being heard.