Karachi, October 23, 2024 – The Federal Board of Revenue (FBR) has issued a detailed procedure outlining the tax assessment for individuals planning to leave Pakistan, ensuring compliance with Section 145 of the Income Tax Ordinance, 2001. This move seeks to address the tax liabilities of those departing the country with no intention of returning.
The FBR clarified that individuals who intend to leave Pakistan during the current tax year, or shortly after its expiration, must provide formal notice and submit their tax returns. As per Section 145 of the Income Tax Ordinance, any person likely to depart from Pakistan must inform the Commissioner at least 15 days prior to their intended departure date.
In addition to the notice, individuals are required to submit a tax return that covers the period from the end of their most recent tax year to the date of departure. If an assessment for the previous year has not been completed or a return has not been filed, they must submit a return for the relevant period ending on the departure date. This time frame will be treated as a distinct tax year for tax calculation purposes.
To further safeguard against tax evasion, the FBR emphasized that the Commissioner holds the authority to serve a notice demanding the submission of a return if they believe an individual is likely to leave Pakistan without fulfilling their tax obligations. This is particularly applicable to individuals suspected of having no plans to return, allowing the Commissioner to enforce timely tax assessments.
The taxable income of the departing individual will be charged at the rates applicable to the corresponding tax year, ensuring that all provisions of the Income Tax Ordinance are adhered to during the assessment process.
Moreover, the FBR has introduced stringent measures aimed at preventing offshore tax evasion. If the Commissioner has reason to believe that an individual leaving Pakistan is involved in offshore tax fraud or is attempting to dispose of assets to evade taxes, the FBR can take decisive action. Under this provision, the Commissioner may freeze any domestic assets, including those beneficially owned by the individual, for up to 120 days or until the completion of legal proceedings.
These measures underscore the FBR’s commitment to strengthening tax compliance and curbing potential tax evasion by individuals attempting to bypass their fiscal responsibilities upon leaving the country. The enforcement of these rules is expected to enhance transparency and accountability within Pakistan’s tax regime.