How Overseas Pakistanis can become Tax Filer in Pakistan?

Overseas Pakistanis who want to become tax filers in Pakistan can do so by filing their Income Tax Return. A Non-Resident person, who is generally a citizen of Pakistan, does not have to pay any Income Tax to the Pakistani government, but he can still file an Income Tax Return to get the status of a Tax Filer in Pakistan. Foreign Pakistani or non-resident Pakistanis who make taxable income in Pakistan are required to pay Income Tax on their income generated in Pakistan. Individuals in Pakistan are taxed based on their resident status, rather than the foreign country in which they reside. This means that there are several benefits to being a tax filer in Pakistan. For instance, if an overseas Pakistani becomes a Tax Filer, they can enjoy lower taxes on over 100 instances, including banking transactions, vehicle registration, and the transfer of immovable property. There are many benefits for non-resident Pakistanis who file taxes, especially if they're looking to invest in the real estate sector, stock exchange, mutual funds, saving schemes or prize bonds. One of the most important things for overseas Pakistanis to know is that if they're planning to buy any movable or immovable assets in Pakistan (like a vehicle or a house) using solely foreign income, they can save a lot of money in the form of withholding taxes simply by declaring themselves a filer. This can also help in declaring the entire assets acquired are from a foreign source and are not taxable in Pakistan. In this way, overseas Pakistanis can also avoid the hassle of an audit by Tax Authorities in Pakistan and are thus fully secured as per Pakistani laws.

Who is Overseas Pakistani According to Federal Board OF Revenue (FBR)?

An individual is considered to be a non-resident for tax purposes if they live outside of Pakistan for 120 days or more in a single tax year, and if they have been living outside of Pakistan for 365 days or more cumulatively over the last 4 years. This means that, for the 2019-20 tax year, an individual must have been living in a foreign country for at least 8 months to claim the status of overseas Pakistani or non-resident.

How Overseas Pakistanis can 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.

National Tax Number (NTN) Registration

If you're a Pakistani citizen living abroad and have never filed your taxes before, you'll need to register yourself on the FBR website first. Before starting the registration process, though, you should check to see if you're already registered with the FBR. You can do this by verifying your NTN on the FBR website. If there's no record of you, go to the IRIS portal and fill in your details by clicking on “registration of un-registered person”, then following the prompts to fill in the required information. You will receive verification pins via email and SMS. It's important to verify the pins right away as you will only have a limited time before the session expires and you'll have to start the process all over again.

Procedure of Filing Tax Returns for Overseas Pakistanis

The Pakistani tax year is from 1st July to 30th June of the next year. An Income Tax Return (ITR) for a tax year must be filed by the 30th September of the next tax year. This means that for the tax year 2019, the ITR for 2019 must be filed by 30th September 2020. Tax Returns can be filed by logging in to the IRIS portal. After you have logged in, click on ‘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.

Lahore Office

Main Boulevard Gulberg, Main Market, Lahore, Punjab 54000
Mr. Ahmed Burhan

Faisalabad Office

Burhan Center, 97-99, Gulistan Market Railway Road, Faislabad, Pakistan
Mr. Ahmed Burhan

UK Office

Associate Office (London)
Mr. Ahmed Burhan