Page 38 - Newsletter May 2018

Newsletter The Institute of Chartered Accountants of Pakistan court of law in respect of such assets. In case of foreign which such amount relates i.e. as per the existing currency held in foreign currency accounts in Pakistan law. However, amounts representing foreign as on March 31, 2018 and encashed in equivalent Pak source income, expenditure or asset shall be Rupees or invested in 5 year US Dollar denominated added to the year immediate preceding tax year bonds amnesty tax rate is 2%. In other cases the rate is of discovery. 5%. SBP provides procedure Repatriation of liquid 4. Some major amendments made vide Income Tax assets for deposit of tax (Amendment) Ordinance 2018 are as under: State Bank of Pakistan has notified ‘Repatriation and Deposit of Tax on Foreign Assets (Declaration and a) Foreign Exchange Remittance - Section 111(4) Repatriation) Procedure 2018’ for deposit of tax in US Currently, foreign exchange remittance from outside Dollars, and Repatriation of liquid assets in Pakistan, Pakistan through normal banking channel and is available to download at http://www.sbp.org.pk/ enchased into Pak Rupees enjoys blanket exemption notifications/FD/2018/NT-16-Apr-18.pdf and are not subject to any enquiry for income tax purposes. This exemption shall not be available FBR Audit Policy 2017 for remittances exceeding Rs.10 Million per person The Federal Board of Revenue (FBR) has approved the in a tax year after the effective date of Income Tax Audit Policy 2017 pertaining to Tax Year 2016. The FBR (Amendment) Ordinance 2018. shall conduct computer ballot on parametric basis for selection of 7.5% cases for audit out of the total b) Detailed statement of foreign income and foreign filers after exclusions of certain cases in Income Tax, assets Sales Tax and FED returns filed for Tax Year 2016 and Every resident individual, having foreign income equal Tax Periods, i.e. July 2015 to June 2016. Taxpayer once to or in excess of US$10,000 or having foreign assets selected for audit though ballot shall not be selected of value of US$ 100,000 or more shall file a separate for audit for next (consecutive) two tax years. statement of foreign income and foreign assets under a newly inserted Section 116A in ITO, giving following FBR Knowledge-Base Portal particulars: FBR has launched a Beta version of its Knowledge ■ Total assets and liabilities as on the last day of the tax Base Portal for guidance and facilitation of taxpayers. year; It is a digital help library for taxpayers, tax collectors ■ Foreign asset transferred during the year and and other related stakeholders. It provides instant consideration thereof; and guidance on all issues related to federal taxes and ■ Foreign income and expenditure derived wholly and duties. There are around thirty articles in this first necessarily for the said income. version and FBR plans to improve and increase A penalty at the rate of 2% of the value of foreign the number of articles based on the feedback and income or foreign assets shall be payable in case of suggestions of the users. The articles will mainly focus default in filing of statement of foreign income and on helping the users on how to use FBR’s IT systems foreign assets. and also educate them on the laws behind the various modules of IRIS, WeBOC and e-portal. c) Year of taxability for concealed and unexplained assets PRA organised Tax Day The concept of taxability in the ‘year of discovery’ has Punjab Revenue Authority (PRA) celebrated April 10 been introduced as against the ‘year of acquisition’ as Tax Day to highlight the importance of taxation in respect of foreign assets and foreign income that in the overall macroeconomic framework and to remained concealed or unexplained. Consequently, introduce the taxpayers as stakeholder in good the tax authorities are empowered to ask any taxpayer governance. Council member Muhammad Awais, who to file a return in respect of foreign assets and foreign is also member of the ICAP Committee on Fiscal Laws, income for any prior tax year without any time represented ICAP at this meeting. Chairman PRA Dr. limitation. Raheel Ahmed Siddiqui informed the participants that registered taxpayers have increased from 2500 Amounts representing Pakistan source income, in 2012 to over 47000 as a result of PRA’s policy to expenditure or asset shall be added into Tax Year to inculcate culture of tax compliance. 38 May 2018