PM praises FBR for achieving 41pc growth in March

PM Imran Khan

Prime Minister Imran Khan on Wednesday commended the Federal Board of Revenue (FBR) for posting an unprecedented 41 percent growth in revenue collection by March 2021.
“I commend the efforts of FBR, I even have achieved a historic growth of 41 percent in March 2021 with recorded shares of Rs460 billion,” the prime minister said during a tweet.
FBR collected about Rs322 billion in the same month last year. FBR also posted a 10 percent growth rate of Rs3,380 billion over the first nine months (July-March) in the current financial year. FBR collected Rs3,060 billion within the corresponding months of the previous fiscal year. “This reflects the broader environmental reforms that are driven by government policies,” the prime minister added.

Source: PkRevenue

Date extended up to June 30 for updating tax profile

tax profile update

The Federal Board of Revenue (FBR) on Friday extended the deadline for updating taxpayer information until June 30, 2021.

FBR issued Circular No. 14 of 2021 March 26, 2021, to extend the date of renewal of the taxpayer profile from March 31, 2021 to June 30, 2021.

The date has been extended with a request for tax restrictions that coronavirus cases were on the rise and most offices were operating at 50% capacity.

Updating the profile of all taxpayers registered under Section 181 of the Income Tax Ordinance, 2001 and other conditions specified by the Federal Board of Revenue (FBR) is a required requirement under Section 114A of the Ordinance.

In Finance Act, 2020, Section 114A is introduced to make the review profile binding to the following persons:

(a) every person applying for registration under section 181;

(b) every person who earns less than the head tax, “business income”;

(c) everyone whose income is less than the final tax;

(d) any non-profit organization as defined in subsection (36) of section 2;

(e) any trust or welfare fund; or

(f) any other person determined by the Board.

The FBR described a recently introduced section: “The complexity of return forms is an example of the complexity of tax law. However, there is a great need to simplify the return forms without compromising on the details required to ensure the accuracy of the published version. ”

The FBR said that instead of trying to get all the right information on tax returns, a new section could be set up where taxpayer information could be stored so that the taxpayer could take the correct information.

It states that persons who have registered before September 30, 2020, and receive business or income through the final tax, trusts, welfare organizations, non-profit organizations, and other persons defined by FBR are required to submit a profile on or before December 31, 2020, which has not been extended until -March 31, 2021.

Persons who receive their registration after September 30, 2020, are advised to submit that profile within 90 days of registration. In the event that there is a change in the details, those people will update their profile within 90 days of the change of details. The profile contains information relating to revenue in respect of bank accounts, communications used, business premises including all production, storage, or retail outlets operated or leased by the taxpayer, the types of businesses, and other information that may be provided by FBR.

FBR stated that if a person fails to provide or renew a taxpayer profile within a reasonable time or period extended by FBR under Section 214A, that person will not be included in the active taxpayer list for the last tax year ending before the date specified above or the date extended.

However, when filing or updating the profile, such persons will be allowed to be included in the list of active taxpayers in the case of a tax liability of Rs20,000 in the case of a company, Rs10,000 in the case of a corporation and Rs1,000 in the case of an individual.

In addition, the fine for non-filing or non-renewal of the profile is also increased at a rate of Rs2,500 per day non-payment of less than the minimum fine of Rs10,000.

Source: PkRevenue

Tax penalty reduced to half for making false statement

tax penalty

According to Tax Laws (Second Amendment) the Ordinance, of 2021 was announced the day before, the amount of the tax penalty under Section 182 of a misleading or false statement has been reduced to 50 percent from the 100 percent tax balance.

Under Serial No. 10 of Section 182: any person who makes a false or misleading statement to the Inland Revenue Authority either in writing or orally or electronically includes a statement on request, certificate, declaration, notification, return, objection, or other documents including accounted documents made, prepared, provided, filed or provided under this Ordinance, then that person shall pay a fine of twenty-five thousand rand or 50 percent of the amount due in any of the above:

Provided that in the event of an inspection order contemplated under section 120, it shall not be penalized to the extent that the tax deduction occurs due to the taxpayer assuming an objection to the use of this Ordinance in place of taxpayers.

Under recent legislation, a fine for misleading information under Section 114A is prescribed. Section 114A relates to the profile of taxpayers.

Reference: PkRevenue

Taxpayers Need to Update their profile to remain as Filer!

tax profile update

According to Profit.PkistanToday, taxpayers need to update their details by March 31, 2021, to avoid penalties and to be removed from the Active Taxpayers (ATL) list.

The last day to renew the profile was December 31, 2020, extended by the Federal Board of Revenue (FBR) until March 31, 2021, in view of the problems faced by taxpayers.

In terms of the Finance Act, 2020, Section 114A was included in the Income Tax Ordinance, 2001, regarding the taxpayer’s profile. According to the provision, the following persons are required to update their details on the IRIS: every person who applies for registration under Section 181; everyone earning taxable income under the head ‘money from business’; everyone whose income is taxed is the last; any non-profit organization as defined in subsection (36) of Section 2; any trustworthy or welfare organization; and any other person determined by FBR.

Details required to update the taxpayer profile are included: bank accounts; help communication; business premises, including all production, storage, or sales facilities operated or leased by a taxpayer; types of businesses; and other details that may be provided.

The FBR has issued a detailed statement on the matter stating that the difficulty of return forms is an example of the complexity of tax law. “However, there is a great need to simplify return forms without compromising on the details required to ensure that the translation is accurate.”

The FBR said that instead of trying to get all the right information on tax refunds, a new section could be set up where taxpayer details could be identified so that the taxpayer could take the correct information.

“A person who is already registered before September 30, 2020, and who receives business income or income through taxation, trust, welfare organizations, non-profit organizations, and other persons appointed by the board is required to submit a profile on or before December 31, 2020 (extended until March 31, 2021). ”

The FBR further stated that persons who received their registration after September 30, 2020 were proposed to submit the issue within 90 days of registration. In the event of a change in the details, those persons will update their details within 90 days of the change.

“The profile contains information relating to income in respect of bank accounts, communications, business premises including all production, storage or sales facilities operated or leased by the taxpayer, types of businesses and other information as determined by the board.”

FBR stated: “If a person fails to provide or update taxpayer details within a specified date or time as extended by FBR under Section 214A of the Ordinance, that person will not be included in the current active taxpayer list for the tax year ending before the due date or extended date.”

However, when filing or updating the profile, such persons will be allowed to be placed in the ATL upon payment of the other proposed tax of Rs20,000 in the case of a company, Rs10,000 in the case of a corporation (AOPs) and Rs1,000 in the case of a corporation of the individual.

“In addition, a fine of non-renewal or non-renewable profile of Rs2,500 per day for non-payment is subject to a minimum penalty of Rs10,000,” FBR said.

Foreign Tax Relief and Tax Treaties for Individuals

foreign tax relief

Foreign Tax Relief
If a person has paid foreign income tax in connection with this salary, then the salary of foreign resources received by a resident is exempt from tax in Pakistan.

Where a resident taxpayer receives foreign sources of income in exchange for taxes in Pakistan, the taxpayers have paid foreign taxes in this regard taxpayers are allowed to pay an amount equal to the tax less than the foreign income tax or an amount equal to the amount of Pakistan tax payable in respect of this income

Foreign sources of income are an exception for non-citizens of Pakistan if the person is a resident only for employment and no one has been in Pakistan for more than three years. This exception does not apply to businesses established in Pakistan and income from foreign sources brought or received in Pakistan.

Tax treaties
Tax treaties represent an important aspect of international tax law in many countries. A tax treaty is a two-party agreement between two countries to resolve issues related to double taxation on the passive and active income of each of its citizens. When an individual or business invests in a foreign country, a problem may arise as to which country will tax the investor’s earnings.

Pakistan has implemented tax treaties with more than 66 countries which are following:

Sr.No Title
1 Bulgaria
2 Hong Kong
3 Brunei Darussalam
4 Czech Republic
5 Nepal
6 Kyrgyz Republic
7 Ukraine
8 Spain
9 Serbia
10 Yemen
11 Vietnam
12 United States of America
13 Uzbekistan
14 United Arab Emirates
15 United Kingdom.
16 Turkmenistan
17 Tunisia
18 Turkey
19 Tajikistan
20 Thailand.
21 Saudi Arabia
22 Syria
23 Switzerland
24 Sweden.
25 Sri Lanka
26 South Africa.
27 Singapore.
28 Romania.
29 Qatar.
30 Portugal
31 Poland
32 Philippines
33 Oman.
34 Norway.
35 Nigeria
36 Netherlands.
37 Morocco
38 Mauritius
39 Malta
40 Malaysia.
41 Lebanon.
42 Libya
43 Korea
44 Kazakhstan
45 Kuwait
46 Jordan
47 Japan

Reference Link: https://taxsummaries.pwc.com/pakistan/individual/foreign-tax-relief-and-tax-treaties



FBR Tax Extension date up to 31st March 2021

tax extension

The Federal Board of Revenue announces the new date for tax extension last Wednesday for taxpayers to update their profiling up to 31st March 2021.

A new section 114A has been added into the Income-tax ordinance 2001 for taxpayers to update their profiles. As per Section 114A, it states:

Section 114A: Taxpayer’s profile.

(1) Subject to this Ordinance, the following persons shall furnish a profile, namely:-

(a) every person applying for registration under section 181;

(b) every person deriving income chargeable to tax under the head, “Income from business”;

(c) every person whose income is subject to final taxation;

(d) any non-profit organization as defined in clause (36) of section 2;

(e) any trust or welfare institution; or

(f) any other person prescribed by the Board.

(2) A taxpayer’s profile-

(a) shall be in the prescribed form and shall be accompanied by such annexures, statements, or documents as may be prescribed;

(b) shall fully state, in the specified form and manner, the relevant particulars of –

(i) bank accounts;

(ii) utility connections;

(iii) business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer;

(iv) types of businesses; and

(v) such other information as may be prescribed;

(c) shall be signed by the person being an individual, or the person’s representative where section 172 applies; and

(d) shall be filed electronically on the web prescribed by the Board.

(3) A taxpayer’s profile shall be furnished,-

(a) on or before the 31st day of December, 2020 in case of a person registered under section 181 before the 30th day of September, 2020; and

(b) within ninety days registration in case of a person not registered under section 181 before the 30th day of September, 2020.

(4) A taxpayer’s profile shall be updated within ninety days of change in any of the relevant particulars of information as mentioned in clause (b) of sub-section (2).

As per PkRevenue, this is the final date for tax extension, and after the deadline, the tax penalty will be imposed for late submission of tax.

Tax Deadline 2020

tax deadline 2020

There are many Pakistani citizens who are looking for tax deadline 2020 to be exceeded. FBR gave the last opportunity to citizen of Pakistan by extending last date of submission of tax return on 8, December 2020 according to notification issued by federal board of revenue.

tax deadline 2020
tax deadline 2020 notification

This is the final deadline issued by FBR and the persons who haven’t file their tax are imposed with a tax penalty of 0.1% of tax everyday after the deadline so the persons who are waiting for deadline to be exceeded must pay their tax as soon as possible in order to not imposed with higher penalty.

Tax Penalty on Late filing 2020

tax penalty

The federal board of revenue has implemented a increase in tax penalty on late filing of tax for year 2020. FBR has introduces total of 8 penalties which will become the part of law as well after parliamentary approval.

For all financial institutions which did not provide their all information regarding their non-resident timely, FBR has introduced four new sections to impose penalty on these institutions as required under section 165B on income tax ordinance 2001. Also, Pakistan is required to share all the information of non-residents with member countries.

To get the requited information on time, government proposed four penalties for non-compliant entities. In case of non-compliance, institution will have to pay a penalty of Rs. 10000 on each default and also addition of Rs. 10000 each month until the default is addressed

Moreover, a penalty of Rs. 50000 will be imposed on false-self certification under common reporting standard rules and the addition of Rs. 50000 once it is not get addressed.

The last date of submission of tax was 8 December 2020 and after that, tax deadline doesn’t exceed. The person not able to submit their tax are imposed a tax penalty of 0.1% of the tax everyday after the tax deadline.

FBR INVOICE MANAGEMENT SYSTEM

FBR INVOICE MANAGEMENT SYSTEM

Offline Technologies is a Providing vast amount of IT services from development of a product too integration of different system that’s why FBR has introduced FBR invoice management system.

Invoice Management System/POS
FBR Invoice management system is the method by which companies track and pay invoices. At its most simple, the process involves receiving an invoice from a third party, validating it as legitimate, paying the supplier, and noting the payment in company records.

FBR IMS SOFTWARE
The purpose of the IMS is to facilitate tier 01 retailer to Understand methods for invoice data sharing with FBR. The software fiscal component will be installed on the same computer on which POS is installed. The fiscal component will be integrated with POS system to generate invoice and returns Fiscal invoice number.

Benefits
• Real-Time Integration with FBR System
• Automatic uploading of invoice data in FBR System
• Prepopulated into Annex- C of Sales Tax Return

WHY DO YOU NEED THIS?
• It’s fast and simple.
• Everything is stored so you don’t lose your record.
• Its secure
• Cost saving
• Reduces error and disputes
• 24/7 excess to your record

LAW
ALL Tier-1 retailer required to integrate their POS with FBR system for submission of sale invoice on real-time basis.

*AS IT IS THE LAW YOU NEED THIS FOR YOUR OWN BUSNIESS SECURITY AND STABILITY.

For the benefits of consumers, Offline Technologies is offering following services in POS

• Integration (Installation) of FBR software with Existing POS

• FBR IMS integrated System

Contact Us Now

Withholding tax rates for income from property

Withholding tax rates for income from property

The withholding tax rates on rental income from the immovable property for the tax year 2021 has been updated by the Federal Board of Revenue (FBR).


After incorporating amendments to the Income Tax Ordinance 2001 enacted by the Finance Act 2020, the FBR updated the Withholding Tax rates for 2020-2021.

The FBR said that under Section 155 of the Income Tax Ordinance 2001, every designated person would gather/deduct withholding tax from the real estate of immovable property on payment of rent at that time.

According to Section 155: Income from property

A): Following are withholding tax for individuals or AOP


  • If the total amount of rent does not exceed Rs. 200,000: Tax rate will be zero.

  • If the total amount of rent is more than Rs. 200,000 but does not exceed Rs. 600,000 then withholding tax would be 5% of the total amount exceeding Rs. 200,000

  • If the total amount of rent exceeds Rs, 600,000 but does not exceed Rs, 1,000,000 then Rs, 20,000 plus 10 percent withholding tax of the total amount exceeding Rs, 600,000.

  • If the total amount of rent exceeds Rs, 1,000,000 but does not exceed Rs, 2,000,000 then Rs,60,000 plus 15 percent withholding tax of the total amount exceeding Rs, 1,000,000

  • If the total amount of rent exceeds Rs, 2,000,000 but does not exceed Rs. 4,000,000 then Rs, 210,000 plus 20 percent withholding tax of the total amount exceeding Rs, 2,000,000

  • If the total amount of rent exceeds Rs.4,000,000 but does not exceed Rs. 6,000,000 then Rs.610,000 plus 25 percent withholding tax of the total amount exceeding Rs.4,000,000

  • If the total amount of rent exceeds Rs.6,000,000 but does not exceed Rs. 8,000,000 then Rs.1,110,000 plus 30 percent withholding tax of the total amount exceeding Rs.6,000,000

  • If the total amount of rent exceeds Rs.8,000,000 then Rs.1,710,000 plus 35 percent withholding tax of the total amount exceeding Rs.8,000,000

B): Withholding tax for companies is 15 percent. The tax will be as per the requirement as compared to the total tax liability.