How Overseas Pakistanis can Become Tax Filer in Pakistan?

Can overseas Pakistan File their Income Tax Return in Pakistan?

Overseas Pakistanis can become filer and file their Income Tax Return in Pakistan. A Non Resident person being a citizen of Pakistan generally do not owe any Income Tax to Government but he can still file Income Tax Return to avail the status of Tax Filer in Pakistan. Foreign Pakistani or a non-resident Pakistan who is earning money in Pakistan or in other word is making taxable income in Pakistan are required to pay Income Tax on their income generated in Pakistan. Like many other countries, taxation in Pakistan depends on the individual’s resident status other than the foreign country in which he resides. There are several benefits of being a filer in Pakistan. For instance, if overseas Pakistanis becomes a Tax Filer, he can avail the benefit of paying lower taxes on somewhat 100+ instances including tax on banking transactions, registration of vehicle, transfer of immovable property etc. Becoming a tax filer is extremely beneficial for non-resident Pakistani who want to invest in the real estate sector, stock exchange, mutual funds, saving schemes and even prize bonds.

It is very important to know for overseas Pakistanis that if they are planning to buy movable or immovable assets in Pakistan such as a vehicle or a house purchased solely from foreign income, they can save a lot of money in shape of withholding taxes by just declaring themselves a filer. Furthermore, this can also help in declaring the entire assets acquired are from a foreign course and are not taxable in Pakistan. In this way overseas Pakistani can also avoid the hassle of audit by Tax Authorities in Pakistan and are thus fully secured as per the Pakistani Laws.

Who is Overseas Pakistani as per the FBR?

A person shall be a non resident individual for a tax year if the individual is living outside Pakistan for a period of 120 days or more in the tax year and, in the last four years he has been outside Pakistan for period not less than 365 days. This means that for the year 2019-20, a person must remain in a foreign country for at least 08 months to claim overseas Pakistani status or a non-resident status.

How Can Overseas Pakistanis File Tax Returns in Pakistan?

In order to file Tax Return, foreign Pakistanis must register with FBR and get their NTN (National Tax Number). This can be done by getting registered online at IRIS portal.

Registering for NTN

Foreign Pakistanis, who have not filed their taxes before, should first register themselves on the FBR website. Before initiating the registration process, one must ensure if he is already registered with FBR. This can be done verifying the NTN on FBR website. In case if on record is found, travel to IRIS portal and fill in the details by clicking on “registration of un-registered person” and follow the procedure by filling the details required.

After you have processed, you will receive pins on your mobile and email. Verify the pins without delay as after some time the session expires and whole process has to be initiated afresh.

After pins are verified, password is sent on both email and mobile number already provided by you. Use you CNIC and password to login to IRIS portal and complete the ‘Registration Form’ available in the draft folder and submit it to get your NTN.

Filing Tax Return for Overseas Pakistanis

Tax Return can be filed by login in to the IRIS portal. After your have logged in, First of all, click the ‘Declaration’ showing on top of the screen. Open form 114(1) (Return of Income filed voluntarily by Non-Resident Pakistan-origin person having no Pakistan-source income) in case if you do not have any source of income from Pakistan but if you have a source of income from Pakistan or in other words you are making taxable income in Pakistan then you have to file normal Income Tax Return form of section 114.

Depending on how many months you’ve spent in Pakistan during the fiscal year, select your status as ‘resident’ or ‘non-resident’ accordingly in the ‘Attributes’ section and enter relevant information in the draft. Moreover, because you are making taxable income in Pakistan in addition to your foreign income, you will have to declare the Pakistani source of income you made in a tax year in the relevant head of income. The foreign income on the other hand will be required to be declared in the “Foreign Income” section. Important to know that Non Resident Pakistani or Overseas Pakistani are also not required to file statement of Wealth along with the Return to enjoy Filer status.

Hamza and Hamza Law Associates is one of the Best Tax Law firms in Lahore who have been providing services to Overseas Pakistanis across the Globe in order to make them Filer. All you need to do is to send us the relevant Documents and we take care of all you tax concerns. You do not need to worry about your privacy or your tax concerns, we understand the privacy of our clients. Not just that the information you provide to us is secure and protected but you become a tax filer in no time.