How Overseas Pakistani can become tax filer

If you're a citizen of Pakistan residing in an exceedingly foreign country, you may have some queries relating to filing your tax returns. Or even you would like to know if you'll become a tax filer, to start with. Whereas the prospect of handling taxes could appear overwhelming to some, the method through that overseas Pakistanis become tax filers is sort of easy. Before we have a tendency to discuss however Pakistani expats will file tax returns from the comfort of their homes, let’s address a number of common misconceptions and queries you may have.

Do Overseas Pakistanis Have to File Taxes?

The simple answer is yes, overseas Pakistanis ought to file taxes. However, they're solely taxed on their Pakistan-sourced income. Taxation in Pakistan, very like in different countries, relies on an individual’s residential status rather than their position. Previously, someone was thought-about a tax resident if they keep within the country for a period of 183 days (or longer) throughout a tax year, that starts from July 1 and ends on June 30. However, time period was reduced to four months after the Finance Act, 2019. That means, for the year 2019-20, a personal needs to keep stay foreign country for a minimum of eight months roughly so as to say ‘tax-free standing.’ It is additionally necessary to know that residents of Pakistan are taxed on all of their income – be it earned domestically or in another country. Meanwhile, once it involves filing tax returns for overseas Pakistani, they're solely needed to file an income tax return on the income sourced from Pakistan, if any. Non-resident Pakistanis aren't obligated to file a Wealth Statement either. Overseas Pakistanis will become tax filers if their Pakistan-sourced income falls below the legal income tax bracket or doesn’t exist in any respect. If they need a valid CNIC, they will still file nil tax returns to induce the advantages of a filer.

How Can Overseas Pakistanis File Tax Returns in Pakistan?

First of all, the overseas Pakistanis need to get an NTN (National Tax Number). It could be obtained by registering on FBR online portal.

Before starting the tax filing process, you need to check the tax payer status first.

How to Check Your Taxpayer Status and NTN

 You can check tax payer status and NTN by the following two methods which are very simple.

1. Type ATL[space]CNIC and send it to 9966. Please don’t add any dash or extra space between the numbers as it will not proceed. Within few minutes, you will receive a text message of your tax payer status. For this purpose, you are required with Pakistani simcard.

2.  Visit the official FBR website and go for Search Taxpayer in the navigation panel showing on the website. Select ‘Active Taxpyer (IT)’ from the top down menu. It will lead you to the new tab, where you will be asked to type your CNIC and verification code received on tax message. After entering CNIC and verification code, click on Verify and you will immediately know if your name is available on ATL (Active Taxpayer List) or not.

Moreover, if your name is on ATL but you don’t know the NTN, click on the ‘Online NTN/STRN Inquiry’ and get your NTN number. Meanwhile, if any person have NTN but don’t have IRIS login credentials, then the login details can be obtained by clicking on ‘E-Enrolment for Registered Person.’

Registering for NTN

For overseas Pakistanis, FBR registration is very simple and straight. The overseas Pakistanis, who have never filed their tax before, first of all they need to register themselves on FBR website by clicking on ‘Registration for Unregistered Person’. They need to follow the procedure, filled the required details to get themselves log into IRIS system.

You will have to verify your phone number and email address by the codes sent to you via text message. Please, verify these codes as soon as possible as these codes will become useless after sometime.

Complete ‘Registration Form’ available in draft folder and then submit it to receive NTN.

For more information, check out our comprehensive blog ‘How tobecome Filer’.

Filing Tax Return for Overseas Pakistanis

As for filing of income tax returns by non-resident Pakistanis, log into IRIS and click on ‘Declaration’ menu on top. You can then follow the procedure explained in our step-by-step guide on filing tax returns, just make sure to mention your income from foreign sources in the ‘Other Sources’ section on the online portal.
Also, 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 input fields.