Returning expatriates’ foreign-source income is exempt from tax. Returning expats’ foreign source income in 2001 is exempt from tax under Section 51 of the Income Tax Ordinance.
Here’s what section 51 of the Income Tax Ordinance 2001 says:
(1) Any foreign source income derived by a citizen of Pakistan in a tax year who was not a resident individual in any of the four tax years preceding the tax year in which the individual became a resident shall be exempt from tax under this Ordinance in the tax year in which the individual became a resident individual and in the following tax year.
(2) Where a citizen of Pakistan leaves Pakistan during a tax year and remains abroad during that tax year, any income chargeable under the head “Salary” earned by him outside Pakistan during that year shall be exempt from tax under this Ordinance.
Definition of Returning Expatriates
An expatriate is an individual who does not reside in his native country. It also refers to a person who is intending to returning to his native country after spending a period of time in foreign country.