Tax Compliance Guidelines and Deadlines
Following are the Tax Compliance Guidelines and Deadlines for
|S.No.||Description of Legal/Statutory Requirements||Frequency||Date of Compliance|
|1.||Filing of Annual Income Tax Return and statement of Final Taxation (in case of Companies)- for the year
-Ending between first day of January and 30th day of June.
-Ending between first day of July and 31st day of December.
On or before 31st Dec.
On or before 30th Sep.
|2.||Filing of Annual Income Tax Returns For Individuals/Proprietorships/Firms/AOPs||Annual||on or before 30th September|
|Filing of Income tax withholding Statements||Quarterly||On or before 20th of the month next to the end of each quarter.|
|4.||Filing of Annual withholding tax Statements (In case of salaries only)||Annual||On or Before 31st July of every year|
|5.||Filing of Annual withholding tax Statements (In case of other than salaries )||On or Before 30th July of every year|
|6.||Filing of Annual statement of Reconciliation of withholding taxes||Annual||By due date of filing of tax return as per section 118|
|Filing of Monthly Sales Tax Returns under the Federal and Provincial Sales Tax Laws;||Monthly||On or before 18th of the month next to the end of each month (Subject to that due date to complete Annex C is 10th and amount of sales tax to be deposited on or before 15th of the month)|
|Filling of Annual Sales Tax Return (for Companies only) – FBR Submission/filing of Annual Audited Accounts along with auditor’s certificate to the Provincial Revenue Authorities.||Annual||For a financial year by the 30th September of the following financial year.
As prescribed by each authority
ADVANCE INCOME TAX COMPLIANCE CHART
Every taxpayer (except income subject to final taxation, salary income and in case of business individual) who has income that was charged to tax in previous tax year shall have to pay advance tax in four quarterly instalments. Advance Tax is computed according to provisions of Section 147. Advance Tax is payable as per following schedule of due dates;
|Quarter September Quarter||In case of Individuals
On or before 15th September
|In case of AOPs/Companies other than banking company On or before 25th September|
|2.||December Quarter||On or before 15th December||On or before 25th December|
|3.||March Quarter||On or before 15th March||On or before 25th March|
|4.||June Quarter||On or before 15th June||On or before 15th June|
WITHHOLDING TAXES- INCOME TAX
- Withholding tax regime has become vital in the taxation system of Pakistan. WHT is an act of deduction or collection of tax at source, through withholding tax agents, which has generally been in the nature of an advance tax payment. More than 70% of income tax is being collected through WHT Regime.
- A deduction of tax at source at the time of payments is required to be made under different withholding tax provisions of the Income Tax Law.
- The deduction/collection of tax is required to be made at prescribed rates according to the nature of payments/receipts.
- The concept of Filer and Non-Filer was introduced in 2013 to increase the tax base and Non-
- Filers were subject to higher WHT Rate, Now the same concept has been provided in the 10th Schedule providing that whose name will not appear in Active Taxpayers List, the rate of withholding shall be increased by 100% with some exceptions.
- Tax deducted/collected at source is required to be deposited in the govt. treasury within seven days of ending of each week in which deduction has been made. For payment to non-residents the tax is required to be deposited a week before the remittance abroad.
- FBR, to meet revenue targets, has been putting special focus on monitoring of withholding taxes. For the last few years withholding tax agents have to face WHT audits u/s 161/205 almost in every year. Therefore, WHT agents need to be more careful regarding their obligations for Withholding Taxes under Income tax law.
Some of the Important Withholding Tax Provisions are as follows;
|Section||Withholding Agents (Prescribed Persons)||Scope||Rate Reference|
|149-Salary||The Person Responsible for Paying Salaries to Employees||Payments of Salaries||As per Rate Schedule (Table 1A Division I of Part I of the First Schedule)|
Payments to Non
|Every Person Making Payment||Payments to a non-resident person for Royalty or Fee for Technical Services||15% (Division IV of Part I of the First Schedule)|
Payments to Non-Residents
|As prescribed under Section 153 (below)||Payments to a permanent establishment in Pakistan of a non-resident person
(i) for the sale of goods;
(ii)for the rendering of or providing services; and
(iii)on the execution of a contract, other than a contract for the sale of goods or the rendering of or providing services
|As per Rate Schedule (Division II of Part III of the First Schedule)|
Payments for Goods, Services and Contracts
|• the Federal Government;
• a company;
• an association of persons constituted by,
or under law;
• a non-profit organization;
• a foreign contractor or consultant;
|Payments to Resident Persons against;
153(1)(a): Sale of Goods; (except where payment is less than Rs. 75,000/- in aggregate, during a financial year)
As per Rate Schedule
(Division III of Part III of the First Schedule)
|• a consortium or joint venture;
• an exporter or an export house;
• an association of persons, having turnover of hundred million rupees or above in tax year 2007 or in any subsequent tax year;
• an individual, having turnover of hundred million rupees or above in the tax year
2009 or in any subsequent year;
• a person registered under the sales tax
Act 1990 having turnover Rs.100 million or above.
• a person deriving income from the
business of construction and sale of residential, commercial or other buildings(builder); or
• a person deriving income from the business of development and sale of residential, commercial or other plots (developer);
|153(1)(b): Providing or rendering of service; (except where payment is less than Rs. 30,000/- in aggregate, during a financial year)
153(1)(c): the execution of a contract, other than a contract for the sale of goods or the rendering of or providing services.
|155-Payment of Property Rent||• the Federal Government;
• a Provincial Government;
• Local Government;
• a company;
• a non-profit organization or a charitable institution
• a diplomatic mission of a foreign state
• a private educational institution, a boutique, a beauty parlour, a hospital, a clinic or a maternity home
• individuals or association of persons paying gross rent of rupees one and a half million and above in a year; or
• any other person notified by the Board
for the purpose of this section.
|Payments of Rent of property||As per Division V of Part III of the First Schedule|
|156A-Petroleum Products||By every person selling petroleum products to petrol pump operator||Commission /Dealer margin
/Discount on Sales of Petrole-
|As per Division VIA of Part III of the First Schedule; 12% for active taxpayers & 24% for non-active taxpayers|
|233-Brokerage and Commission||• Federal Government,
• a Provincial Government,
• a Local Government,
• a company or
• an association of persons constituted by, or under any law
|Payment of Brokerage and
Commission to Agents
|As per Division II of Part IV of the First Schedule|
Sale by Auction
|Every Person Making Sale by public Auction or Auction by a tender||Sale by public auction or auction by a tender, of any property or goods||As per Division VIII of Part IV of the First Schedule; 10% of active taxpayer & 20% for nonactive taxpayer.
Rate for purchase of property through auction is 5% and 10% for nonactive taxpayer
Sale or transfer of Immovable Property
|The person responsible for registering or attesting transfer of any immovable property||From Seller on Transfer 0f Immovable Property||As per Division X of Part IV of the First Schedule; 1% for active taxpayers & 2% for non-active taxpayers|
|236K-Advance tax on purchase or transfer of
|The person responsible for registering or attesting transfer of any immovable property||From Purchaser on Transfer of Immovable Property||As per Division XVIII of Part IV, of the First Schedule; 1% for active taxpayers & 2% for non-active taxpayers|
|236G-Sale to Distributors, Dealers and
|Every manufacturer or commercial importer of pharmaceuticals, poultry and animal feed, edible oil and ghee, auto-parts, tyres, varnishes, chemicals, cosmetics, IT equipment, electronics, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector||On Sale to Distributors, Dealers & wholesalers||As per rates provided in Division XIV of Part IV of the First Schedule; 0.25% for active taxpayer and 0.7% for non-active taxpayer of fertilizers & For other than fertilizers 0.1% for Active Tax Payers and 0.2% for non active taxpayers|
Sales to Retailers
|Every Manufacturer or Commercial importer or dealer or wholesalers or distributor of pharmaceuticals, poultry and animal feed, edible oil and ghee, auto-parts, tyres, varnishes, chemicals, cosmetics, IT equipment, electronics, sugar, cement, iron and steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector||On Sales to Retailers etc.||As per rates proved in Division XV of Part IV of the First Schedule; 0.5%. Rates are double for non active taxpayers.|
|236 I Collection of Advance Tax by Educational Institutions||Person preparing Fee Voucher/Challan on behalf of Educational Institutions Applicable only on persons who are not on
|Collection of Advance Tax by Educational Institutions on Fee/Charges of Students where annual fee/charges exceed Rs.200,000 except on an amount which is paid by way of scholarship.||5% (Division XVI of Part IV of the First Schedule)|
|236Q Advance Tax on usage of Machinery and Equipment||Every person as prescribed u/s 153(7)||On rentals of machinery and equipment other than agricultural machinery and leased machinery and equipment||As per Division XXIII of Part IV of the First Schedule @10%|
For more information on FBR’s new regulations / circulars/ SROs/ amendments in taxation laws in Pakistan please visit https://www.fbr.gov.pk/