Section 172 of the Income Tax Ordinance, 2001, specifies who may represent individuals, companies, trusts, associations and non-residents for tax purposes in Pakistan.
The Federal Board of Revenue (FBR) has defined the categories of persons who may act as representatives of taxpayers under Pakistan’s income tax law for Tax Year 2027.
The FBR has issued the Income Tax Ordinance, 2001, updated up to June 30, 2026, for Tax Year 2027, covering the period from July 1, 2026, to June 30, 2027.
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Under Section 172, a taxpayer’s representative depends on the person’s legal status and circumstances.
For an individual under a legal disability, the representative is the guardian or manager who receives, or is entitled to receive, income on the individual’s behalf or for their benefit. For a company, the principal officer acts as the representative, while a trustee may represent a trust established through a valid written instrument.
In the case of provincial or local governments, the representative is the individual responsible for accounting for public funds. For an association of persons, the principal officer acts in this capacity, while any partner may represent a firm. A designated individual responsible for accounting for funds may represent the Federal Government or a qualifying foreign government or public international organisation.
The provision also covers circumstances in which a Court of Wards, Administrator General, Official Trustee, receiver or court-appointed manager receives or is entitled to receive income on behalf of another person.
Representatives of non-residents
Section 172 provides specific rules for non-resident taxpayers. A person in Pakistan may act as their representative if they are employed by the non-resident, have a business connection with them, facilitate the receipt of their income, control their money, act as their trustee or are formally appointed by the Commissioner.
The law clarifies that a business connection may include the transfer of an asset or business in Pakistan by a non-resident.
However, a bona fide independent broker is not treated as the representative of a non-resident principal for qualifying transactions conducted through a non-resident broker in the ordinary course of business, provided the prescribed conditions are met.
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The Commissioner cannot declare a person to be the representative of a non-resident without first providing that person with an opportunity to be heard.
These provisions establish the legal framework for determining taxpayer representation and accountability under the Income Tax Ordinance, 2001.