‘Pakistani must declare foreign assets’
The federal government has made it mandatory on the resident Pakistanis having foreign assets and income to submit details of their assets and income and expenses along with their income tax returns.
According to a notification issued on Wednesday, the resident taxpayers, who fail to declare foreign assets and income, would be subject to penalties equal to 2% of the value of their undisclosed assets and 2% of the undisclosed income.
Through a notification, the FBR has implemented the amendments made to the Income Tax Rules.
Earlier, the FBR had sought feedback from stakeholders on the draft amendment, which has now been implemented through a gazette notification.
A new rule, 36A, has been added to the Income Tax Rules. This rule says individual resident taxpayers will submit a statement of the foreign assets and income at the end of each tax year.
The new rule also states that if assets are transferred by one person to another person during the tax year, its details should also be provided. Similarly, details of foreign income and expenses must also be provided.
In July 2022, the FBR brought another change in the definition of a resident Pakistani taxpayer to bring in those people in the tax net that stay abroad for over six months in a tax year.
The latest amendment enacted through the Finance Act 2022 has created some confusion among frequent flyers about their status whether they would be treated as taxpayers of a foreign country or as Pakistani ones.
Before the Finance Act 2022, a person was treated as a resident Pakistani taxpayer if they were “present in Pakistan for a period of, or periods amounting in aggregate to 183 days or more in a tax year.
This that a person had to stay abroad meant.
