OGDCL Exchangeable Bonds: non-resident investors allowed tax relief

The Federal Board of Revenue (FBR) has notified income tax exemption for non-resident investors of OGDCL''s Exchangeable Bonds. In this connection, the FBR issued an SRO64(I)/2012 to amend the Second Schedule of the Income Tax Ordinance 2001 here on Wednesday. According to the notification, income tax exemption would be applicable on any income derived by a non-resident from investment in OGDCL exchangeable bonds issued by the federal government.
The Cabinet had granted tax exemption to OGDC exchangeable bonds after being informed that, as per precedent, international investors in government of Pakistan sovereign bonds are exempted from tax on interest derived from such bonds and are also exempted from any tax emerging out of capital gains on the trading of bonds.
Following is the text of the SRO64(I)/2012 issued here on Wednesday: In exercise of the powers conferred by sub-section (2) of section 53 of the Income Tax Ordinance, 2001 (XLIX of 2001), the Federal Government is pleased to direct that the following further amendment shall be made in the Second Schedule to the said Ordinance, namely: In the said Schedule, in Part I, after clause (135A) the following new clause (135A) shall be inserted, namely: "(135A) Any income derived by a non-resident from investment in OGDCL exchangeable bonds issued by the Federal Government."