Pkrevenue.com

Day: August 14, 2020

  • Withholding tax rates for brokerage, commission updated

    Withholding tax rates for brokerage, commission updated

    ISLAMABAD: Federal Board of Revenue (FBR) has updated withholding tax rates for brokerage and commission income for tax year 2021.

    The FBR issued withholding tax card 2020-2021 incorporating amendment to Income Tax Ordinance, 2001 made through Finance Act, 2020.

    Under Section 233 of Income Tax Ordinance, 2001 federal government, provincial government, local authority, company, association of persons (AOP) are required to collect/deduct withholding tax at the time the brokerage or commission is actually paid.

    The deducted amount shall be minimum tax.

    The withholding tax rates for brokerage and commission shall be:

    In case of:

    (i) advertising agents shall pay 10 percent and persons not on the Active Taxpayers List (ATL) shall be 20 percent.

    (ii) life insurance agents where commission received is less than Rs0.5 million per annum the tax rate shall be 8 percent and for persons not appearing on the ATL the tax shall be 16 percent.

    (iii) the persons not covered in 1 & 2 the tax rate shall be 12 percent and for persons not appearing on the ATL the tax shall be 24 percent.

    Under Section 233AA of the ordinance the members stock exchange (margin financier & lenders) trading finance shall pay withholding tax.

    The National Clearing Company of Pakistan Limited (NCCPL) will collect withholding tax at 10 percent of the mark-up or interest from the members stock exchange (margin financier & lenders) trading finance at the time of mark-up / interest is paid.

    The tax is adjustable against total tax liability.

  • FBR asks taxpayers to update profile to avoid penalty

    FBR asks taxpayers to update profile to avoid penalty

    ISLAMABAD: Federal Board of Revenue (FBR) has asked taxpayers to update their profile with necessary information by December 31, 2020 in order to avoid fine and penalty.

    The FBR in a statement on Thursday said that complexity of return forms was an embodiment of the complexity of tax law. “Nevertheless, there is a dire need to simplify return forms without compromising on data required to verify accuracy of the declared version,” it added.

    Instead of endeavoring to obtain all the relevant information in the income tax return, a new section has been introduced under which taxpayers profile may be prescribed in order to capture data relevant to the taxpayer.

    Persons who are already registered before September 30, 2020 and are deriving business income or incomes subject to final taxation, trusts, welfare institutions, non-profit organizations and such other persons prescribed by the board are required to submit updated profit by December 31, 2020.

    Persons who obtain their registration after September 30, 2020 will require to furnish such profile within 90 days of registration. In case of any change in particulars of information, such persons shall update their profile within 90 days of the change in particulars.

    The profile contains information relevant to income regarding bank accounts, utility connections, business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer, types of businesses etc.

    Moreover, if a person fails to submit updated profile within the due date or time period as extended by the FBR under Section 214A of Income Tax Ordinance, 2001, such person shall not be included in the Active Taxpayers List for the latest tax year ending prior to the aforesaid due date or extended date.

    However, upon filing or updating the profile, such persons shall be allowed to be placed on the active taxpayers list upon payment of surcharge which will be Rs20,000 in the case of a company, Rs10,000 in the case of Association of Persons (AOP) and Rs1,000 in the case of an individual.

    Further, a penalty for non-filing or not updating the profile is also proposed at the rate of Rs2500 for each day of default subject to a minimum penalty of Rs10,000.

  • Duty drawback payment to be made on FIFO basis

    Duty drawback payment to be made on FIFO basis

    ISLAMABAD: Federal Board of Revenue (FBR) has said that payment of duty drawback will be paid on First-in First-out (FIFO) basis taking into account the date of filing of claim.

    The FBR on Thursday issued SRO 714(I)/2020 to issue rules for processing duty drawback claims.

    The FBR said that comprehensive audit of duty drawback payments would be carried out by the Directorate General of Post Clearance Audit 9pcA) of the FBR.

    Any recovery detected by the PCA may be deducted from the next duty drawback claim of the exporter besides initiating recovery proceedings under the recovery rules.

    According to the rules a consolidated discrepancy report would be sent by the Collectorate to State Bank of Pakistan (SBP) on monthly basis. “The SBP shall also send a scroll of all the duty drawback payments made to the exporters,” the FBR added.

    For calculation amount of customs duties paid at the time of import, past six months import data may be used taking the average quantity or value of each class or description of the materials, including packing materials, from which a particular class or description of goods is ordinarily produced or manufactured. Average exchange rates of the same period may be taken into consideration.

    The average amount of customs duties paid on imported materials used in the manufacture of components, intermediate of semi-finished products which are exported as such or further used for manufacture of goods shall be taken into account for the purpose of calculation of duty drawback.

    The average amount of customs duties paid at the effective rate on the imported input materials shall be calculated for the last six months import data.

    The average freight on board (FOB) value of each class or description of the goods exported during the last six months may be taken into consideration for the class or description of goods for which export drawback rates are being determined.

    The FBR said that the duty drawback as may be admissible shall be part of the process of assessment of cargo for export and the amount so admissible to the exporter shall be computed and processed by Customs Computerized System on sale proceeds amount repatriated into the country and Form-E settlement from the commercial bank.