New Tax Exemption System for Overseas Pakistanis on Property Transactions Introduced by FBR

Islamabad: The Federal Board of Revenue (FBR) has introduced a new system that allows overseas Pakistanis to avail exemptions on advance property taxes while buying or selling real estate. The FBR issued a notification outlining the new process, which aims to ease the tax burden on overseas Pakistanis involved in property transactions in Pakistan.

**New Procedure for Tax Exemption:**

According to FBR sources, to avail the tax exemption, an overseas Pakistani must first file their annual tax returns. Once the returns are filed, they can apply online for a Non-Resident Certificate (NRC). Required documents for this application include copies of the applicant’s National Identity Card and passport. Upon verification, the Chief International Taxes will issue the certificate.

**System Registration:**

After the certificate is issued, the individual’s details will be registered in the FBR system. When the person proceeds to buy or sell property, the system will automatically verify whether they qualify for the tax exemption.

**Temporary PSID and Confirmation:**

Once registered, the overseas Pakistani will receive a temporary Pakistan Specific Identification Number (PSID). The details will be sent to the relevant Chief Commissioner for verification, and within 24 hours, the applicant will receive confirmation via SMS or email regarding their eligibility for the tax exemption.

**No Tax Exemption, Just Filer Status:**

Rana Akram, Vice President of the All Pakistan Property Dealers Association, clarified that the new procedure does not grant a direct tax exemption but instead allows overseas Pakistanis to be classified as tax filers. “The exemption is not being granted on tax, but overseas Pakistanis will be able to file returns online and obtain a Non-Resident Certificate,” he explained. This move will ensure that overseas Pakistanis are classified as filers and will only have to pay the 3% property tax applicable to filers, as opposed to the 7% tax for non-filers.

**Reactions from Property Dealers:**

Real estate dealer Iqbal Khyber praised the FBR’s initiative, suggesting that this will increase investment in Pakistan’s real estate market from overseas Pakistanis. However, he noted that some ambiguities in the notification still need clarification to streamline the process.

**Conclusion:**

The FBR’s new tax exemption process aims to simplify property transactions for overseas Pakistanis, making it easier for them to invest in Pakistan’s real estate market. While the system offers no direct tax cuts, it ensures that overseas Pakistanis are classified as tax filers and continue to benefit from the same tax rates as other filers.