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Income tax on foreign investors: no advance ruling issued in 2010 - Lahore_Real_Estate - 12-23-2010 01:33 PM
ISLAMABAD (December 23, 2010) : The Federal Board of Revenue (FBR) has not issued any advance ruling to foreign investors and non-resident companies during 2010 under the Income Tax Ordinance 2001. The FBR has already devised a procedure for foreign investors/non-resident companies to obtain 'advance ruling' on income tax matters to avoid tax disputes later.
When contacted, an FBR official said on Wednesday that the income tax laws and procedures have been simplified and the new investors seemed not interested in obtaining advance rulings in income tax matters. The gradual reduction in the number of advance rulings to foreign investors has reflected that the non-resident companies are not facing any technical difficulty in dealing with the income tax laws. Therefore, the total number of advance rulings issued to foreign investors in 2010 is negligible.
According to sources, the facility of advance ruling was notified in 2003-04 to facilitate foreign investors. However, a few foreign investors and non-resident companies approached to avail the facility of advance ruling during last few years. The special committee has the authority to examine the application filed by a non-resident company. However, FBR is bound to finalise application on 'advance ruling' within a specific time period.
According to the procedure, a non-resident person desirous of advance ruling under section 206A of the Ordinance, 2001 will submit an application to the FBR in the format outlined in the Schedule of the draft notification. The advance ruling will be binding on the Commissioner only in respect of specific transaction on which such advance ruling is issued. The advance ruling shall continue to remain in force, unless there is a change in facts or in the law on the basis of which the advance ruling was pronounced.
The committee may obtain comments of the concerned Commissioner and, if it considers necessary, get advice of a legal expert, on the application and decide the issue in a joint sitting or through circulation among its members.