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Foreign Income and Assets Statement in Pakistan

Comprehensive Analysis of SRO 777(I)/2023: Foreign Income and Assets Statement in Pakistan



The Government of Pakistan, through the Revenue Division and the Federal Board of Revenue (FBR), issued a crucial notification in the form of SRO 777(I)/2023. This notification introduces significant amendments to the Income Tax Rules of 2002, specifically focusing on the requirement of filing a foreign income and assets statement. This detailed and comprehensive blog aims to provide a thorough analysis of SRO 777(I)/2023, its implications for taxpayers, and the significance of the FBR’s decision to delay the opening of this application on iris until 18 July 2023.



The Government of Pakistan, recognizing the importance of transparency in taxation and the need to address offshore financial holdings, has introduced SRO 777(I)/2023. This notification adds Rule 36A to the Income Tax Rules of 2002, which mandates the submission of a foreign income and assets statement. The primary objective of this rule is to gather comprehensive information about taxpayers’ foreign assets, liabilities, income, and related expenditures.


The Scope of the Foreign Income and Assets Statement:

The introduction of Rule 36A expands the reporting requirements for taxpayers, specifically those with foreign income and assets. The foreign income and assets statement, as specified in the rule, encompasses the following key elements:


a) Total Foreign Assets and Liabilities:

Taxpayers are now obligated to disclose their total foreign assets and liabilities as of the last day of the tax year. This provision allows tax authorities to evaluate an individual’s net worth in terms of their foreign holdings.


b) Transfer of Foreign Assets:

The statement must include any foreign assets transferred by the taxpayer to another person during the tax year. Additionally, the consideration or value of the transfer should be documented. This requirement aims to capture instances of asset transfers for potential tax evasion detection.


c) Foreign Income and Expenditure:

Taxpayers are required to provide detailed information about their foreign income earned during the tax year. Furthermore, they must outline the expenditure directly related to the derivation of the said income. This provision ensures transparency in reporting foreign income and associated expenses.


Verification and Documentation Requirements:

The foreign income and assets statement must be verified as per the prescribed form. Taxpayers should adhere to the provided guidelines to ensure the accuracy and authenticity of the submitted information. Additionally, the statement should be accompanied by relevant documents, statements, and certificates, as outlined in the form itself and in the Income Tax Ordinance, rules, and circulars issued under the Ordinance. These documentation requirements contribute to the robustness of the reporting process.


Implications of Non-Compliance:

Failure to furnish the foreign income and assets statement, as required by Rule 36A, can lead to penalties under Section 182(1)(IAAA) of the Income Tax Ordinance, 2001 (XLX of 2001). Taxpayers must recognize the importance of complying with the submission requirements to avoid potential penalties and legal complications. Non-compliance may attract severe consequences, highlighting the significance of adhering to the new regulations.


FBR’s Decision to Delay the Opening of the Application on Iris:

In an interesting development, the FBR has announced the delay of the opening of the foreign income and assets statement application on iris, the FBR’s online tax portal, until 18 July 2023. This decision provides taxpayers with additional time to understand the requirements, gather necessary documentation, and ensure accurate reporting. The FBR’s intention to grant this extension underscores its commitment to facilitate compliance and enhance the taxpayer experience.


Recommendations for Taxpayers:

Considering the introduction of Rule 36A and the extended application opening date, taxpayers should take the following steps:


a) Familiarize themselves with the amended Income Tax Rules of 2002 and the requirements specified in Rule 36A.

b) Assess their foreign assets, liabilities, and income to compile accurate information for the foreign income and assets statement.

c) Ensure proper documentation, including relevant supporting documents, statements, and certificates.

d) Seek professional advice, if necessary, to comprehend the implications of Rule 36A and ensure compliance.

e) Utilize the extended timeline provided by the FBR to prepare and submit the foreign income and assets statement accurately.


SRO 777(I)/2023, which introduces Rule 36A regarding the foreign income and assets statement, signifies the Government of Pakistan’s commitment to enhance transparency in tax reporting and address offshore financial holdings. The scope of this rule expands reporting requirements and necessitates the submission of comprehensive information related to foreign assets, liabilities, income, and expenditures. Taxpayers must adhere to the stipulated guidelines and provide accurate and complete information to avoid penalties and legal consequences.

As of 18 July 2023, the application 116A(1) (Foreign Income & Assets Statement for Resident Individuals) has not been opened for tax years 2023. Taxpayers are advised that the application is currently unavailable for use. It is important to note that the exact date of the application’s opening has not been specified. Therefore, taxpayers should stay informed and regularly check official announcements from the relevant authorities regarding the availability and opening of the application for the submission of the foreign income and assets statement for resident individuals.