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Tax Compliance Guidelines and Deadlines

Posted on by Muhammad Waheed Ensari

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.

 Annual  

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
 

3.

 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
 

 

 

7.

 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)
 

 

8.

 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;

Sr. No.

 

1.

 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)
152(1)-

Payments to Non

Residents

 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)
152(2A)-

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)
153-

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-

um products

 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
236A-

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
236C-

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

Immovable  Property

 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

Wholesalers

 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
236H-

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

ATL.

 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/

For taxation services please contact us and to read more of our blogs click here.

Muhammad Waheed Ensari

Founder & CEO, BeSpoke Consulting and Training with 20+ Years of Professional Experience (International and National) in the field of Business Development, Taxation, Accounting, Finance & Auditing with good understanding of financial management system. Strong exposure in the field of general accounting, G/L maintenance, financial reporting and Internal control procedures. Expert in handling people of diverse nationalities, and renowned for being an excellent team player with a positive “can do” attitude. Energetic & self-motivated with a high degree of cultural sensitivity.

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