How can Overseas Pakistanis become tax filers?
WHO CAN BE OVERSEAS PAKISTANI AS PER THE FEDERAL BOARD OF REVENUE?
''A person shall be a non-resident individual for a tax year if the individual is living outside Pakistan for 120 days or more in the tax year and, in the last four years, he has been outside Pakistan for a period not less than 365 days. This means that a person must remain in a foreign country for at least 08 months to claim overseas Pakistani status or a non-resident status for the tax year.''
Overseas Pakistani as Tax filler
- Overseas Pakistanis can easily become tax filers in Pakistan and file their Income Tax Returns.
- A Non-Resident person being a citizen of Pakistan, normally does not have any Income Tax liability to Government of Pakistan. However, for availing the rank of Tax Filer in Pakistan, he can also file Income Tax return.
- Foreign Pakistani or a non-resident Pakistani whose income is taxable in Pakistan or in other words, who are earning income in Pakistan are liable to pay Income Tax on their income earned in Pakistan.
- Pakistan-sourced income is meant by any income which is earned in Pakistan that is taxable regardless of its receiving. This means that if Pakistani is receiving remuneration from an employer in Pakistan then his income tax at source will most likely be deducted from his salary even if he ex-pats residing in a foreign country.
- It is essential to mention that just deduction of income tax from your salary does not mean that you have become a tax filer automatically. To be acknowledged as a filer in Pakistan, you are required to be added to the Federal Board of Revenue's Active Taxpayers List.
- Furthermore, suppose an ex-pat has immovable or movable assets in Pakistan, such as a house or a motor vehicle which is purchased exclusively from foreign income. In this case, there is need to prove that the money was remitted outside the country. They need to apprehend that the said transaction was carried out via proper channels and as per instructions mentioned by the State Bank of Pakistan. In 2018, FBR decided to waive off the withholding tax applicable on the withdrawals of remittances, i.e. the funds sent to the home (Pakistan) by a non-resident Pakistanis.