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.

  • Assessment oversight committees formed to settle taxpayers’ cases

    Assessment oversight committees formed to settle taxpayers’ cases

    ISLAMABAD: Assessment oversight committees have been formed at all tax offices of Inland Revenue in order to settle the cases of taxpayers in expeditious manner, officials at Federal Board of Revenue (FBR) said.

    The committees have been formed following amendment made to Income Tax Ordinance, 2001 through Finance Act, 2020, which was recently approved by the National Assembly.

    The committee shall comprise the following tax authorities having jurisdiction over the taxpayer, namely:

    (a) the Chief Commissioner Inland Revenue;

    (b) the Commission Inland Revenue; and

    (c) the Additional Commissioner Inland Revenue.

    A new section 122D has been inserted to Income Tax Ordinance, 2001 for agreed assessment in certain cases.

    Under this section where as taxpayer, in response to a notice under sub-section of Section 122, intends to settle his case, he may file offer of settlement in the prescribed form before the assessment oversight committee in addition to filing reply to the commissioner.

    The committee after examining the offer may call for the record of the case and after affording opportunity of being heard to the taxpayer, may decide to accept or modify the offer of the taxpayer through consensus and communicate its decision to the taxpayer.

    Where the taxpayer is satisfied with the decision of the committee:

    (a) the taxpayer shall deposit the amount of tax payable including any amount of penalty and default surcharge as per decision of the committee;

    (b) the commissioner shall amend assessment in accordance with the decision of the committee after tax payable including any amount of penalty and default surcharge as per decision of the committee has been paid;

    (c) the taxpayer shall waive the right to prefer appeal against such amended assessment; and

    (d) no further proceedings shall be undertaken under this ordinance in respect of issues decided by the committee unless the tax has not been deposited by the taxpayer.

    According to the amendment, where the committee has been able to arrive at the cons or where the taxpayer is not satisfied with the decision of the committee, the case shall be referred back to the commissioner for decision on the basis of reply of the taxpayer in response to notice under section 122 notwithstanding proceedings or decision, if any, of the committee.

    This section shall not apply in cases involving concealment of income or where interpretation of question of law is involved having effect on other cases.

    Further, the FBR may make rules regulating the procedure of the committee and for any matter concerned with, or incidental to the proceedings of the committee.

  • Finance Act 2020: wealth statement cannot be revised after five years

    Finance Act 2020: wealth statement cannot be revised after five years

    ISLAMABAD: A wealth statement cannot be revised after the expiry of five years from the date of filing of income tax return, officials at Federal Board of Revenue (FBR).

    The amendment has been approved by the National Assembly by passing the Finance Act, 2020. The amendment has been introduced in sub-section 3 of Section 116 to Income Tax Ordinance, 2001.

    The sources said that under Income Tax Ordinance, 2001 taxpayers had already been allowed to revise their wealth statement by providing reasons for the revision and before any notice issued by a tax office in this regard.

    However, through amendment Commissioner Inland Revenue has been empowered to declare the revised wealth statement if he found any ill intention of the taxpayer.

    According to the amendment: “Provided that where the commissioner is of the opinion that the revision under this sub-section is not for the purpose of correcting a bona fide omission or wrong statement, he may declare such revision as void through an order in writing after providing and opportunity of being heard.”

    An explanation has also been included through amendment which said: “For the removal of doubt it is clarified that wealth statement cannot be revised after the expiry of five years from the due date of filing of return of income for the tax year.”

    A taxpayer is required to file wealth statement under Section 116 along with annual income tax return by providing particulars included:

    (a) the person’s total assets and liabilities as on the date or dates specified in such notice;

    (b) the total assets and liabilities of the person’s spouse, minor children, and other dependents as on the date or dates specified in such notice;

    (c) any assets transferred by the person to any other person during the period or periods specified in such notice and the consideration for the transfer;

    (d) the total expenditures incurred by the person, and the person’s spouse, minor children, and other dependents during the period or periods specified in the notice and the details of such expenditures; and

    (e) the reconciliation statement of wealth.

  • FBR appreciates services of Nausheen Amjad

    FBR appreciates services of Nausheen Amjad

    ISLAMABAD: Senior officers of the Federal Board of Revenue (FBR) gathered on Tuesday to commend the contributions of Ms. Nausheen Javaid Amjad, who recently stepped down from her position as FBR Chairperson.

    (more…)
  • FBR extends date for submitting Annex-H to claim refund

    FBR extends date for submitting Annex-H to claim refund

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday allowed taxpayers to submit their stock position for the period July–January 2019/2020 up to July 31, 2020 in order to claim sales tax refunds under newly only verification and issuance system.

    In an official memorandum issued, the FBR extended the time limit for filing of Annexure – H for the tax period July – January 2019/2020 up to July 31, 2020.

    Annexure-H is a statement for providing stock position by taxpayers along with monthly sales tax return.

    The FBR from July 01, 2019 introduced expeditious payment of sales tax refunds within 72 hours subject to the true filing of Annexure – H.

    As per the Rules, refund will be treated as having been filed only after filing of Annexure H of the Sales Tax return, for which deadline of 120 days has been prescribed in the Rules and the same can be extended for a period of 60 days on the basis of approval from the Commissioner.

  • Javed Ghani assumes charge of FBR chairman

    Javed Ghani assumes charge of FBR chairman

    ISLAMABAD: Muhammad Javed Ghani has assumed additional charge of chairman Federal Board of Revenue (FBR) on Tuesday after removal of Ms. Nausheen Javed Amjad from the post of FBR chairperson.

    A notification issued by the FBR, Muhammad Javed Ghani, an officer of Pakistan Customs Service BS-22 assumed the additional charge of the post of chairman FBR on July 07, 2020.

    In another notification issued by the FBR stated that Ms. Nausheen Javaid Amjad, BS-22 officer of Inland Revenue Service has relinquished the charge of the post of FBR chairperson with effect from July 07, 2020.

  • Finance Act 2020: Amended list of persons required to file annual income tax return

    Finance Act 2020: Amended list of persons required to file annual income tax return

    ISLAMABAD: Persons falling under final tax regime are now required to file annual income tax returns. In this regard amendment has been made through Finance Act, 2020.

    (more…)
  • FBR imposes restriction on deduction of profit on debt payable to associated enterprise

    FBR imposes restriction on deduction of profit on debt payable to associated enterprise

    ISLAMABAD: Federal Board of Revenue (FBR) has imposed restriction on deduction of profit on debt payable to associated enterprise in order to comply with OECD action on profit shifting.

    The restriction has been imposed through introduction of Section 106A of Income Tax Ordinance, 2001 through Finance Act, 2020, recently passed by the National Assembly of Pakistan.

    Tax experts at EY Ford Rhodes Chartered Accountants said that in line with Action Plan 4 of the OECD’s recommendations on Base Erosion and Profit Shifting (BEPS), the new section has been introduced which imposes a restriction on deduction of profit on debt payable to associated enterprise.

    The salient features of the new section are:

    — Deduction of foreign profit on debt in excess of fifteen percent of taxable income before depreciation, amortization and foreign profit on debt shall be disallowed to a foreign controlled resident company (other than an insurance or banking company);

    — The section shall not apply if the total foreign profit on debt claimed as a deduction is less than Rs10 million for a tax year;

    — Where the foreign profit on debt cannot be fully adjusted against the taxable income for a tax year, the excess amount shall be added to the amount of foreign profit on debt for the following tax year and shall be treated to be part of that deduction, or if there is no such deduction for that tax year, be treated as the deduction for that tax year and so on for three tax years following the year in which the foreign profit on debt was claimed as an expense;

    According to FBR sources this section shall apply in respect of foreign profit on debt accrued with effect from the first day of July, 2020, even if debts were contracted before the first day of July, 2020;

  • Finance Act 2020: Hotel business allowed carry forward loss for eight years

    Finance Act 2020: Hotel business allowed carry forward loss for eight years

    ISLAMABAD: The hotel industry in Pakistan has received a significant tax relief, as the government has allowed businesses in this sector to carry forward losses for a period of eight years starting from the tax year commencing on July 1, 2020. This amendment, introduced through the Finance Act, 2020, was recently approved by the National Assembly.

    (more…)
  • FBR issues formula for computing capital gain tax on immovable property sale

    FBR issues formula for computing capital gain tax on immovable property sale

    ISLAMABAD: Federal Board of Revenue (FBR) has issued formula for computation of capital gain tax on disposal of immovable property as amended through Finance Act, 2020.

    (more…)
  • Finance Act 2020: Cash payment Rs250,000 allowed as deduction

    Finance Act 2020: Cash payment Rs250,000 allowed as deduction

    ISLAMABAD: Federal Board of Revenue (FBR) has relaxed the condition for business community by allowing deduction of cash payment up to Rs250,000 while computing business income.

    According to Finance Act 2020 approved by the National Assembly amendments have been introduced to Section 21 of Income Tax Ordinance, 2001.

    Section 21 of the Ordinance prescribes a list of expenditures that are not allowed as a deduction when computing Income from Business.

    This includes certain expenditures that are not made through banking channels if they exceed the prescribed thresholds.

    According to EY Ford Rhodes Chartered Accountants, the Finance Bill had proposed to enhance the threshold of aggregate expenditure under a single account head from Rs50 thousand to Rs250 thousand, not made through banking channels, that would be allowed as a deduction when computing Income from Business..,

    Further the relaxation of a single cash transaction in the above limit has been enhanced from Rs10 thousand to Rs25 thousand.

    Similarly, the threshold of salary, not paid through banking channels, has been proposed to be increased from Rs15 thousand to Rs25 thousand.

    Similar to the provisions of the sales tax laws, the Bill also proposes to introduce a new Clause whereby an industrial undertaking would not be entitled to claim a deduction for any expenditure attributable to sales made to persons required to be registered but not registered under the Sales Tax Act, 1990 computed according to the following formula, namely;

    (A/B) x C

    Where –

    A is the total amount of deductions claimed;

    B is the turnover for the tax year; and

    C is the total amount of sales exclusive of sales tax and federal excise duty to persons required to be registered but not registered under the Sales Tax Act, 1990 where sales equal or exceed rupees 100 million per person.

    Provided that disallowance of expenditure under this Clause shall not exceed twenty percent of total deductions claimed and that the FBR may, by notification in the official Gazette, exempt persons or classes of persons from this Clause on the basis of hardship.

    Another Clause is also proposed to be inserted under which any expenditure on account of utility bills in excess of prescribed limits and conditions would not be allowed as a deduction.