Karachi, December 6, 2024 – The Federal Board of Revenue (FBR) has issued instructions to Chief Commissioners of Inland Revenue (CCIRs) to expedite property transactions for overseas Pakistanis, ensuring that the verification and approval process is completed within a single business day.
This initiative is part of the FBR’s continued efforts to streamline the process for overseas Pakistanis involved in real estate transactions, making it more efficient and accessible.
This directive comes in response to the recent extension of tax exemptions for overseas Pakistanis engaging in property transactions. The FBR aims to make these exemptions more easily accessible and efficient, thus encouraging expatriates to invest in the Pakistani real estate market. The move is designed to facilitate property sales and purchases by overseas Pakistanis who hold a Pakistan Origin Card (POC) or a National Identity Card for Overseas Pakistanis (NICOP).
The tax exemptions, introduced through the Finance Act of 2022 under Clause 111AC of the Income Tax Ordinance, 2001, provide relief to non-resident individuals by exempting them from higher tax rates under Sections 236C and 236K, even if they are not listed on the Active Taxpayers List (ATL). This provision is aimed at making property transactions smoother for overseas Pakistanis by eliminating additional tax burdens that would typically apply to non-residents.
To streamline the process, the FBR has updated its IRIS tax system. Overseas Pakistanis wishing to claim these exemptions must upload their POC or NICOP details when creating their withholding tax challan under Sections 236C and 236K. Once submitted, a provisional Payment Slip ID (PSID) will be generated, which will be forwarded to the CCIR for review and approval.
Upon receiving the PSID, the CCIR will assign the case to the relevant Commissioner Inland Revenue (CIR) for verification of the applicant’s non-resident status. After confirming eligibility, the exemption will be granted, and the taxpayer will receive an SMS and email notification, allowing them to proceed with their property transaction without incurring higher taxes.
The FBR’s initiative underscores its commitment to simplifying the tax process for overseas Pakistanis and encouraging investment in the country’s real estate sector. By ensuring faster processing and greater transparency, the FBR aims to build trust with expatriates, recognizing their significant contributions to the national economy. This effort is expected to further boost confidence in Pakistan’s property market and attract more investment from overseas Pakistanis.