Pkrevenue.com

Tag: Federal Board of Revenue

The Federal Board of Revenue is Pakistan’s apex tax agency, overseeing tax collection and policies. Pakistan Revenue is committed to providing timely updates on the Federal Board of Revenue to its readers.

  • ITO-2001 defines resident, non-resident persons

    ITO-2001 defines resident, non-resident persons

    ISLAMABAD: Income Tax Ordinance, 2001 has defined resident and non-resident Pakistan for the purpose of apply rate of income tax on domestic source of income.

    The Federal Board of Revenue (FBR) issued ITO 2001 (updated June 30, 2020) and differentiated residents and non-resident Pakistanis.

    Various sections of Income Tax Ordinance, 2001 explains the definition:

    Section 81. Resident and non-resident persons

    Sub-section (1): A person shall be a resident person for a tax year if the person is —

    (a) a resident individual, resident company or resident association of persons for the year; or

    (b) the Federal Government.

    Sub-section (2): A person shall be a non-resident person for a tax year if the person is not a resident person for that year.

    Section 82 – Resident individual: — An individual shall be a resident individual for a tax year if the individual —

    (a) is present in Pakistan for a period of, or periods amounting in aggregate to, one hundred and eighty-three days or more in the tax year;

    (ab) is present in Pakistan for a period of, or periods amounting in aggregate to, one hundred and twenty days or more in the tax year and, in the four years preceding the tax year, has been in Pakistan for a period of, or periods amounting in aggregate to, three hundred and sixty-five days or more; or

    (c) is an employee or official of the Federal Government or a Provincial Government posted abroad in the tax year.

    Section 83 – Resident company: A company shall be a resident company for a tax year if —

    (a) it is incorporated or formed by or under any law in force in Pakistan;

    (b) the control and management of the affairs of the company is situated wholly in Pakistan at any time in the year; or

    (c) it is a Provincial Government or Local Government in Pakistan.

    Section 84 – Resident association of persons: — An association of persons shall be a resident association of persons for a tax year if the control and management of the affairs of the association is situated wholly or partly in Pakistan at any time in the year.

  • KTBA identifies flaws in online tax return filing

    KTBA identifies flaws in online tax return filing

    KARACHI: Karachi Tax Bar Association (KTBA) on Saturday said that it has detected calculation errors on the online return filing portal of the Federal Board of Revenue (FBR).

    In this regard the tax bar sent a letter to Dr. Muhammad Ashfaq, Member Inland Revenue (Operations), Federal Board of Revenue (FBR) apprising him that the issues were discussed with o November 17, 2020 but the problems were same unresolved till to date.

    It is pertinent to mention that the last date for filing income tax return is December 08, 2020. Such problems may adversely affect the total number of return filing.

    The tax bar in its latest letter to the Member IR Operations highlighted the same issues for early resolution for smooth return filing.

    The tax bar said that IRIS Portal was not correctly calculating the tax on Behbood Saving Certificate and others. It said that till today working of tax on yield from Behbood Saving Certificate or Pensioners Benefit Account and Shuhada Welfare Account is still incorrect where average rate of tax exceeds 10 percent of total income.

    The tax bar suggested that to show the yield as a separate block of income in order to avoid the calculation issues.

    The KTBA said that minimum tax calculation was also showing incorrect working. The tax bar suggested that for tax year 2020, there has been a paradigm shift in taxation of incomes previously taxed under final tax regime and now are being taxed at minimum.

    “Although, the law had been amended yet there are not instructions given by the FBR as to how to cater to these situations.”

    Working under these situations is showing incorrect tax amount which renders the return defective and there is need to correct the working, the tax bar added.

    The tax bar highlighted issue in tax deducted/paid under Section 233A by a stock exchange registered in Pakistan, and said they were unable to claim tax deducted/paid in case of sale/purchase of shares under section 233A of the ordinance as the same is not available in adjustable tax regime. The tax bar suggested to provide the column for the tax year 2020.

    Similarly, in case of tax deducted/paid under section 236W on purchase of immovable property, it said that they were unable to claim tax deducted/paid in respect of property purchased before June 30, 2019 and tax under section 236W of the Ordinance is paid subsequently i.e. during the tax year 2020; as the same is not available in description/heads of Final Tax Regime (FTR)/Minimum Tax Regime (MTR).

    Therefore, it is suggested to provide the column for the tax year 2020.

    The KTBA pointed out that through Finance Act, 2019, tax regime for various income entities was changed from FTR to Minimum Tax. Accordingly, entities following special tax year are required to file January-June under FTR and July – December under minimum tax. However, IRIS portal does not cater for such situation.

    “For the income stream having special tax year where taxation regime is changed from final tax to minimum tax, the IRIS portal should cater both regimes,” the KTBA suggested.

  • FBR obtains information of motor vehicle buyers

    FBR obtains information of motor vehicle buyers

    The Federal Board of Revenue (FBR) is taking significant steps to obtain detailed information about motor vehicle buyers from manufacturers.

    (more…)
  • FBR notifies transfer, postings of customs officers

    FBR notifies transfer, postings of customs officers

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday notified transfer and posting of officers of Pakistan Customs Service (PCS) in BS-17 to BS-19 with immediate effect and until further orders.

    The FBR notified transfers and postings of following officers:

    01. Shoukat Ali (Pakistan Customs Service/BS-19) has been transferred and posted as Additional Director, Directorate General of Input Output Coefficient Organization, Karachi from the post of Secretary, Federal Board of Revenue (Hq), Islamabad.

    02. Syed Fazal Samad (Pakistan Customs Service/BS-19) has been transferred and posted as Additional Collector, Model Customs Collectorate of Appraisement and Facilitation (West), Karachi from the post of Secretary, Federal Board of Revenue (Hq), Islamabad.

    03. Amanullah (Pakistan Customs Service/BS-18) has been transferred and posted as Secretary, (OPS) (Customs Wing) Federal Board of Revenue (Hq), Islamabad from the post of Deputy Collector, Model Customs Collectorate of Appraisement and Facilitation (East), Karachi

    04. Shams-ur-Rehman (Pakistan Customs Service/BS-18) has been transferred and posted as Additional Director (OPS), Strategic Exports Control, Ministry of Foreign Affairs, Islamabad, on Deputation from the post of Deputy Collector, Model Customs Collectorate of Appraisement and Facilitation, Quetta.

    05. Muhammad Omer Latif (Pakistan Customs Service/BS-17) has been transferred and posted as Second Secretary, (Customs Wing) Federal Board of Revenue (Hq), Islamabad from the post of Assistant Collector, Model Customs Collectorate of Port Muhammad Bin Qasim, Karachi.

    06. Muhammad Zahid Khan (Pakistan Customs Service/BS-17) has been transferred and posted as Assistant Collector, Model Customs Collectorate of Appraisement and Facilitation, Peshawar from the post of Assistant Director, Directorate of Transit Trade, Peshawar.

    The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

  • Resident Pakistanis not allowed investing in Naya Pakistan Certificates: FBR

    Resident Pakistanis not allowed investing in Naya Pakistan Certificates: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday clarified that resident Pakistanis are not allowed to invest in Naya Pakistan Certificates (NPCs).

    The FBR issued clarification to a news appeared in a national daily. The FBR said that the only non-resident individuals can purchase Naya Pakistan Certificate, who maintain bank account abroad or foreign currency account maintained in Pakistan. “It is also clarified that such individuals are not required to file returns of income,” according to a statement issued by the FBR.

    However, the FBR clarification is contrary to the explanation of the ministry of finance and State Bank of Pakistan (SBP). In a joint press release issued by the ministry of finance and the SBP on November 12, 2020 clearly mentioned: “Resident Pakistanis who have declared their assets abroad can also invest in US denominated NPCs.”

    The FBR explained in details the legal provisions of Income Tax Ordinance, 2001 about the treatment of tax for non-resident.

    The FBR said that Naya Pakistan Certificate, a new instrument launched by the Government/ State Bank of Pakistan, qualifies as debt instrument in terms of Clause (5AA) of Part-II of the Second Schedule of the Income Tax Ordinance, 2001.

    Therefore, profit on debt on the Naya Pakistan Certificate is subject to tax at the rate of 10 percent which is final tax.

  • Rising coronavirus cases may impact revenue collection in second quarter

    Rising coronavirus cases may impact revenue collection in second quarter

    ISLAMABAD: The ministry of finance has said that the rising cases of coronavirus may slowdown economic activities and adversely impact revenue collection in second quarter (October – December) of the current fiscal year.

    (more…)
  • FBR issues simplified return form for taxpayers having turnover less than Rs50 million

    FBR issues simplified return form for taxpayers having turnover less than Rs50 million

    ISLAMABAD: Federal Board of Revenue (FBR) has launched a single page simplified draft income tax return form for business individuals and Association of Persons (AOPs) having annual turnover less than Rs50 million.

    (more…)
  • Appeals against tax orders to be filed electronically from January 01

    Appeals against tax orders to be filed electronically from January 01

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued draft rules for filing appeals electronically from January 01, 2021.

    The FBR issued SRO 1262(I)/2020 to propose amendments in Income Tax Rules, 2002.

    According to the SRO the FBR proposed amendments to rule 70 to 70O.

    The draft rules are as follow:

    76. Appeal to the Commissioner Inland Revenue (Appeals) on web portal: An appeal under Section 127 of the Income Tax Ordinance, 2001 shall be filed, as prescribed on Iris web portal from January 01, 2021.

    76A. Date of filing of appeal: The date of appeal shall be the date on which it was filed electronically.

    76B. Documents to accompany appeal: (1) the appellant shall electronically attach documents along with appeal namely:

    (a) the order appealed against;

    (b) notice of demand; and

    (c) proof of payment of appeal fee.

    (d) any other supporting document(s).

    (2) the appellant shall annex an electronic index showing the documents filed under this rule.

    76C. Intimation of filing of appeal to the respondent: the appeal shall also be electronically transmitted to the respondent through Iris.

    76D. Filing of affidavit regarding contrary facts: Where a fact, which cannot be borne out by or is contrary to the record, is alleged, it shall be stated clearly and concisely by a duly sworn affidavit and shall have to be filed electronically with appeal and shall be produced in original before the Commissioner (Appeals).

    76E. Defective appeals etc. (1) Where an appeal is not filed electronically in the manner specified in these rules, an electronic notice shall be issued within three days requiring the appellant or his authorized representative, if any to bring the appeal in conformity with the rules, within the time limitation as specified in sub-section (5) of Section 127 of the Ordinance subject to just exception under sub-section (6) of the aforesaid section and the appeal so received shall not be deemed to have been filed unless the provisions of these rules have been fully complied with.

    (2) Where the appellant or his authorized representative does not meet the requirement under sub-rule (1), the matter shall be decided by the Commissioner (Appeals) through appropriate orders.

    76F. Power of attorney etc., by authorized representative: Where an authorized representative has been appointed or declared as defined in Section 172 of Ordinance, such representative shall electronically attach with the appeal, the document showing his authority and his/her acceptance thereof, which shall be signed and dated by the representative and shall also specify his capacity in which he/she is acting as such. Further, this shall be produced in original before the Commissioner (Appeals).

    76G. Procedure for filing and disposal of stay application: (1) On receipt of say application electronically the official authorized in this behalf shall fix the application for hearing in the following manner, namely:

    (a) For application received before 01:00PM on a working day, hearing shall be fixed on the next working day; and

    (b) For applications received after 01:00PM on a working day, hearing shall be fixed on the day after the next working day.

    (2) Stay applications shall be disposed by the Commissioner (Appeals) electronically within seven days of fixation.

    76H. Date and place of hearing of appeal and stay applications: (1) The Commissioner (Appeals) shall issue notices electronically to both the parties to the appeal informing them about the date and place of hearing of appeal or the stay application as the case may be.

    (2) The Commissioner Inland Revenue (Appeals) may, where deemed necessary, require the respondent department to submit para-wise comments electronically in response to the appellant’s electronic submissions, if any, on or before the date of hearing.

    76I. Hearing of Appeal or stay application: (1) On the day fixed for hearing or any other day to which the hearing is adjourned the appellant shall be heard and the Commissioner (Appeals) shall then hear the respondent against the appeal or stay application and in that case the appellant shall have a right to replay.

    (2) The Commissioner Inland Revenue (Appeals) may from time to time adjourn the hearing of the appeal.

    76J. Notice to be issued electronically to both parties under Sub-Section (2) of Section 129: The Commissioner Inland Revenue (Appeals) shall issue notices electronically to both parties for providing them a reasonable opportunity to present their stance in case of increase in the amount of any assessment order or decrease in the amount of any refund.

    76L. Reports: (1) The Commissioner Inland Revenue (Appeals) shall submit electronically a monthly performance report as prescribed on Iris web portal by the 5th of every month.

    (2) Commissioner Inland Revenue (Appeals) shall submit the stay applications disposal report as prescribed on Iris web portal by the 5th and 20th day of every month.

    76M. Uploading Manual Orders/Letters Received: The Commissioner Inland Revenue (Appeals) shall make it sure that orders/decisions received from the Tribunal or Higher Courts and all other documents which have been received manually from quarters other than the appellant, are immediately uploaded in Iris in soft form with the relevant case on web portal.

    76N. Electronic Order: The order passed electronically on Iris web portal shall not require any seal or signature of the Commissioner (Appeals). The date of order shall be the date as mentioned on the order generated by the system.

    76O. Explanation: (1) No case pertaining to the Tax Year 2014 onwards, shall be filed manually from January 01, 2021, and the cases already filed manually before the said date shall be processed as per the SRO 279(I)/2018 dated March 05, 2018. All such cases shall be finalized as per law but not later than June 30, 2021. If any case is left out or remanded back by the Tribunal or Higher Judiciary, from the cases processed earlier manually, the Commissioner (Appeals) shall process it electronically with the effect from July 01, 2021.

    (2) The cases pertaining to periods prior to the Tax Year 2014 would be processed as per SRO 279(1)/2018 dated March 05, 2018.

  • Volunteer helps FBR in broadening of tax base

    Volunteer helps FBR in broadening of tax base

    The Federal Board of Revenue (FBR) is actively pursuing its mission to raise awareness about tax compliance and encourage citizens to fulfill their national duty by paying taxes and making accurate declarations of their income and assets.

    (more…)
  • Procedure to get exemption certificate for imported goods

    Procedure to get exemption certificate for imported goods

    ISLAMABAD – The Federal Board of Revenue (FBR) has established a clear procedure for taxpayers to obtain exemption certificates for the exemption from advance income tax on imported goods.

    (more…)