Overseas Pakistanis end up tax filers.
Suppose you are a citizen of Pakistan dwelling in an overseas country. In that case, you may have some questions about submitting your tax returns. Or you may prefer to recognize if you can become a tax filer. While the prospect of dealing with taxes may appear overwhelming to some, the way overseas Pakistanis emerge as tax filers is pretty simple.
Before we discuss how Pakistani ex-pats can file tax returns from the comfort of their homes, let’s tackle a few frequent misconceptions and questions you would possibly have.
DO OVERSEAS PAKISTANIS HAVE TO FILE TAXES?
Non-resident Pakistanis filing tax returns
Non-resident Pakistanis have to file tax returns for their Pakistan-sourced income.
The simple answer is yes, Pakistanis have to file taxes in remote places. However, they are solely taxed on their Pakistan-sourced income. Tax consultant services.
Much like in other countries, taxation in Pakistan is based totally on an individual’s residential fame instead of their nationality. Previously, a man or woman was viewed as a tax resident if they continued to be in the country for 183 days (or longer) throughout a tax year, which starts offevolved on July 1 and ends on June 30. However, the duration decreased to four months after the Finance Act 2019.
That means, for the fiscal year 2019-20, an individual has to stay in an overseas us of for at least eight months or so to claim ‘tax-free status.’
It is also vital to apprehend that residents of Pakistan are taxed on all their profits – be they earned domestically or in every other country. Meanwhile, when submitting tax returns for overseas Pakistani, they are only required to file a profits tax return on the income sourced from Pakistan, if any.
Non-resident Pakistanis are now not obliged to file a Wealth Statement either.
Overseas Pakistanis can emerge as tax filers if their Pakistan-sourced income falls below the prison tax bracket or doesn’t exist at all. If they have a legitimate CNIC, they can file nil tax returns to get the advantages of a filer.
WHAT IS CONSIDERED TAXABLE INCOME IN PAKISTAN?
taxable profits for remote places Pakistanis
Any profits generated in Pakistan are accountable to taxation regardless of where it is received.
Pakistan-sourced income is potential earnings or income earned in Pakistan, which is taxable regardless of where it’s being received. This means even if Pakistani ex-pats living overseas in the united states of America are getting remuneration from an agency in Pakistan, their income tax will most probably be deducted from their earnings at the source.
Another vital aspect to mention is right here that just because your income tax is being deducted from your salary does now not mean you are robotically a tax filer. You must be brought to the Federal Board of Revenue’s Active Taxpayers List to be recognized as a filer in Pakistan by Income Tax filing services.
Furthermore, suppose an ex-pat has movable or immovable assets in Pakistan, such as an automobile or a house bought solely from overseas income. In that case, they need to prove that the funds were remitted from the country’s backyard. They also want to ensure that the transaction was carried out via desirable channels allowed by the State Bank of Pakistan. In 2018, the Federal Board of Revenue determined to waive the withholding tax on the withdrawal of remittances (funds sent domestic via non-resident Pakistanis.)
As per the Pakistan tax law, FBR and concerned authorities can open an inquiry into any taxpayer’s assets and ask them to explain the source, if needed.
HOW CAN OVERSEAS PAKISTANIS FILE TAX RETURNS IN PAKISTAN?
Filing tax returns in Pakistan
Overseas Pakistanis can file their tax returns on the IRIS portal.
To end up a tax filer in Pakistan, a foreign place. Pakistani first wishes to acquire an NTN (National Tax Number) by registering on the Federal Board of Revenue’s online portal.
However, before we speak about the manner of tax submission for distant places Pakistanis. You can use Taxconsultancy.pk if want to take a look at your taxpayer status.
HOW TO CHECK YOUR TAXPAYER STATUS AND NTN
If you are already listed as a filer, there are two quick ways to look.
You are typing ATL [space] CNIC wide variety and sending it to 9966. Make sure you don’t add any dashes between the numbers. You’ll shortly acquire a message informing you of your taxpayer status. However, you’ll require a Pakistani sim for the purpose.
Visit the reliable internet site Taxconsultancy.pk and hover over ‘Search Taxpayers’ in the navigation panel. From the dropdown menu. Choose ‘Active Taxpayers (IT).’ It’ll lead you to a new tab, where you’ll find your CNIC number and verification code. Click verify, and you will be aware of your name on the ATL without delay.
If you are listed as a taxpayer but don’t recognize your NTN. Click on the ‘Online NTN/STRN Inquiry’ section and use your CNIC variety to gain the number.
Meanwhile, individuals who have an NTN, but don’t have the credentials to log into IRIS, the online portal for submitting an income tax return. Can achieve their username and password by clicking on E-Enrolment for Registered Person.’
WHY SHOULD OVERSEAS PAKISTANIS BECOME TAX FILERS IN PAKISTAN?
Benefits of being a tax filer in Pakistan
Income tax filers have to pay significantly decreased taxes than the non-filers
There are various benefits of being a filer in Pakistan. For instance, if remote places, Pakistanis end up tax filers. They can avail the privilege of paying lower taxes on economic transactions. Becoming a tax filer is highly beneficial for non-resident Pakistanis who want to invest in the real estate sector. Stock exchange, mutual funds, saving schemes, and even prize bonds.
Previously, in non-filer distant places, Pakistanis were barred from shopping for property in the country. However, the cutting-edge government has eased that restriction; a non-filer can’t buy a property exceeding PKR 50 lakh. Meanwhile, there is no positive restriction set for filers.
