Resident individuals with foreign income of at least US$10,000 or foreign assets worth US$100,000 must file a statement under Section 116A for Tax Year 2027.
ISLAMABAD: The Federal Board of Revenue (FBR) has made the filing of a foreign income and assets statement mandatory for resident individual taxpayers who meet specified foreign income or asset thresholds for Tax Year 2027.
According to the Income Tax Ordinance, 2001, updated up to June 30, 2026, the requirement applies to the tax year running from July 1, 2026, to June 30, 2027.
Under Section 116A, every resident taxpayer who is an individual must furnish a foreign income and assets statement if their foreign income is not less than US$10,000 or the value of their foreign assets is not less than US$100,000.
The statement must be submitted in the prescribed form and verified in the prescribed manner. It must include details of the taxpayer’s total foreign assets and liabilities as at the last day of the relevant tax year.
Taxpayers must also disclose details of any foreign assets transferred to another person during the tax year, along with the consideration received from such transfers.
In addition, the statement must contain complete particulars of foreign income earned during the tax year and the expenditure incurred in deriving that income. This includes expenditure wholly and necessarily incurred for the purpose of earning the foreign income.
FBR can compel submission
The law also gives the Commissioner authority to pursue taxpayers who fail to comply with the requirement.
Where the Commissioner has recorded reasons to believe that an individual was required to submit a foreign income and assets statement but failed to do so, a written notice may be issued requiring the taxpayer to furnish the statement by a specified date.
The provision establishes specific disclosure requirements for resident taxpayers with significant foreign income or overseas assets and provides the FBR with a mechanism to seek compliance from individuals who fall within the prescribed thresholds.
For Tax Year 2027, eligible taxpayers will therefore need to account for their foreign income, overseas assets, liabilities, transfers and related expenditure when completing their required tax declarations.