Federal Board of Revenue issued notification ref: 773/(I)/2020 dated August 24, 2020.
Section 165A of the Income Tax Ordinance, 2001 requires all banking companies to provide information relating to cash withdraws, deposits, credit card payment and profit on debts exceeding certain limits as prescribed in the said section. Similarly, 165B of the Income Tax Ordinance, 2001 relates to furnishing of information by financial institutions including banks relating to non-residents.
Chapter VIIIA “Banking Companies Reporting requirements” was introduced in in the year 2014 to prescribe rules for such reporting requirement of banking companies. These rules have now been substituted by Federal Board of Revenue (FBR) vide S.R.O. # 773(1)/2020 dated August 24, 2020. Further, amendment and introduction of new rules have been made in Chapter XIIA “Common Reporting Standard” through the said SRO.
Amendments in Chapter – VIIIA – Banking Companies Reporting Requirements:
Major change in amended rules relates to
- Mandatory filing of information electronically through FBR’s web portal have been changed to the medium as may be specified.
- Requirement of providing online access to central database of banking companies has been omitted.
- The information required to be reported to the Board is now to be provided to FBR instead of Chairman FBR or any officer authorized by the Chairman.
- Banking Companies are now required to furnish information on monthly basis within 15 days instead of 07 days from the end of the preceding month.
- Exclusion available to Banking Companies with respect to information about accounts holders who holds NTN and who has also filed Income Tax Return for the immediately preceding tax year has been withdrawn now meaning thereby the banks are required to provide the required information about all account holder whether filer or non-filer.
Following prescribed Forms are required to be filed by banking companies.
Form A – Account holder Deposit Statement
(Information of person who have deposited Rs. 1 million or more during the month)
Form B – Credit Card(s) Statement
(Information of persons who have made credit card payments of Rs. 200,000 or more during the month)
Form C – Cash Withdrawal Statement
(Information in respect of cash withdrawals exceeding Rs. 1 million or more during the month)
Form D – Profit on Debt Statement
(Information in respect of profit on debt during the financial year)
Above information shall be provided in the defined format, which in major require for CNIC / Passport No, NTN No, Resident / Non- Resident Status, Address, Telephone No, Profession / Occupation and amount of financial transactions during the month/year of reporting.
Amendments in Chapter XIIA – “Common Reporting Standard”
- Definition of “Controlling Person” under Clause “an” of Rule 78B of Chapter XIIA of the ITR 2002 has been amended to also include a person who owns 20% or above stake in an entity.
- After Rule 78J, following new clauses are added:
- Record keeping for due diligence procedures. –
This Reporting financial institutions to keep record for at least five years after the end of the period within which the reporting financial institution must report the information required to be reported.
- Date of filling of Common Reporting Standards Report. –
The Annual Domestic reporting date for filling of Common Reporting Standard Reports shall be 31st May of Each Year and Reports shall be submitted on the AEOI Portal on FBR’s Official Website in CRS XML Schema prescribed by the Global Forum of Organization for Economic Co-operation and Development (OECD).
- Avoidance of Obligation. –
If any person enters into any arrangement for avoiding any obligation under the Common Reporting Standards, the all the provisions of the ITO 2001 and ITR 2002 shall apply as if the arrangement had not been entered into.
- Power to call for record and inspect premises
The record maintained under Common Reporting Standards Rules shall be furnished along with full and free access to FBR or to person authorized by FBR. The Board is also empowered to compel assistance of any person including State Bank of Pakistan and Securities and Exchange Commission of Pakistan and any other such organization, body etc. who holds such information that may assist Board to identify and classify reporting financial institutions, non-reporting financial institutions and excluded accounts as per common reporting standards.
- Compulsory Enrollment
FBR may in accordance with Law compulsory enroll a reporting financial institution if the said financial institution fails to enrolls with the department through AEOI Portal on FBR’s Official Website.
Link of Document
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