FBR implements new rule for corporate sector

ISLAMABAD: The Federal Board of Revenue (FBR) has implemented new directives for the corporate sector, mandating the retention of beneficial owners’ records for a period of 10 years.

The Income Tax Rules, 2002, were amended by the FBR on Monday through a notification, establishing a new “Chapter” titled “Record of Beneficial Owners.”

As per the amended rules, the FBR will retain records of beneficial owners for companies and associations of persons (AOPs) registered with the board for a decade after their registration is terminated.

According to the new regulations, every newly registered company and AOP is required to electronically provide the details of its beneficial owners to the FBR through the designated online system.

For companies and AOPs already registered with the FBR, the particulars of their beneficial owners need to be electronically submitted to the board by December 31, 2023.

Should any changes occur in the details of beneficial owners, the records must be updated within 30 days of the change, as stipulated in the designated Form, the FBR announced.

Non-profit organizations are also subject to these rules. In such cases, the settler, trustee, founder, promoter, beneficiary, or relevant class of beneficiary will be considered beneficial owners. Exceptions apply when the beneficiary or class of beneficiary is the general public.

In instances where beneficial owners remain unchanged throughout a tax year, the company or AOP must submit a “Certificate of Confirmation for Beneficial Owner” in the prescribed Form through the FBR’s online system. This is to be submitted alongside the income tax return for that particular tax year, as outlined in the new regulations.

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