Federal Board of Revenue has issued notification ref: SRO 887/(I)/2018 dated July 23, 2018.
The said SRO issued is giving effect to the decisions taken in Economic Coordination Committed (ECC) in meeting held on May 31, 2018 for considering the financial matters arising after the 31st amendment in Constitution of Islamic Republic of Pakistan. The said effects have been discussed in detail in our newsletter for June 2018 (available at our website). Accordingly, the areas previously regarded as FATA/PATA have been included in the scope of Income Tax Ordinance, 2001 and are subject to compliance of its provisions relating to taxability of income, withholding etc. The above mentioned SRO grants exemption in following manner:
- The profits and gains of Individuals, if they become registered with FBR by September 30, 2018
- The profits and gains of an AOP or Company, if they become registered with FBR by September 30, 2018. Also the AOP or Company should be existing and registered offices are in the aforesaid areas
- The provisions (relating to withholding) as contained in Division III of Part V of Chapter X and Chapter XII of the Ordinance including withholding tax on salary. Interestingly the exemption includes person working in the aforesaid areas whether residing in the said areas or outside.
Link of original notification