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FBR to introduce new system related Controlled Foreign Companies from July 1

FBR to introduce new system related Controlled Foreign Companies from July 1

ISLAMABAD: Federal Board of Revenue (FBR) has introduced new system related to Controlled Foreign Companies. Income tax has been imposed on the income earned by any Pakistani from these foreign companies, it is learnt here.

Official sources told Customs Today that the new system for the Controlled Foreign Companies will be effective from July, 1 2018. The FBR has amended the Income Tax Ordinance 2001, and induced a new section under the Finance Bill 2018.

Sources also told that the board has sent written directives to all field formations, Inland Revenue Commissioners that according to this new system imposed on the Controlled Foreign Companies, income tax will be imposed on the income earned from the investment by any Pakistani in these foreign companies.

Meanwhile, the FBR has also clarified that any Pakistani having foreign assets and income and he has not declared in the tax returns, in this case the board will impose 2% per year of default surcharge, sources added.

It is also important to mention here, that FBR has made it mandatory to submit foreign assets statement with the income tax returns which will be effective from July 1, 2018.