ISLAMABAD: The Federal Board of Revenue (FBR) has been empowered through the proposed draft rules of asset declarations to initiate proceedings where an asset was not declared by the taxpayers up to tax year 2018.
The FBR will not initiate proceedings against the legally valid declarations of amnesty scheme of 2019 under Foreign Exchange Regulation Act, 1947, Protection of Economic Reforms Act1992 and Anti-Money Laundering Act, 2010 or any rules, notifications or orders made there under with respect to assets, income or expenditure declared under the Assets Declaration Act 2019.
The FBR has issued a draft of further amendments to the Assets Declaration (Procedure and Conditions) Rules, 2019 through a notification issued on Tuesday.
As per draft rules, no declaration shall be declared void unless definite information regarding misrepresentation or suppression of facts is available with the Commissioner Inland Revenue.The FBR has explained the treatment of asset, income or expenditure in a declaration.
The amount of asset, income or expenditure in a valid declaration shall not be included in the taxable income of the declarant for any tax year up to and including tax year 2018 under the Ordinance.
The rules state that no proceedings under any provision of the Ordinance shall be initiated on the basis of any information relating to an asset, income or expenditure as at June 30, 2018 or any prior period, provided the declarant files an irrevocable written statement along with plausible documentary evidence to the effect that source to that extent has been declared in the declaration irrespective of the form of the asset or jurisdiction at the date of filing the declaration.
The rules said that the nature and source of asset, income or expenditure shall not be treated as explained and the Commissioner Inland Revenue or his delegate shall be entitled to proceed under Section III of the Income Tax Ordinance, on the basis of definite information acquired from any source other than a valid declaration itself, in following cases: Where the value of asset, income or expenditure, as at June 30, 2018, as per the definite information is in excess of value as per declaration and where the source of asset, income or expenditure relates to a person other than the declarant.
The rules said where an action under Section 111 of the Ordinance as undertaken in accordance with sub-rule (2) results in invalidation of the declaration then such an action cannot be initiated without prior approval, for reasons to be recorded in writing, of the Chief Commissioner Inland Revenue as defined in clause (lIB) of section 2 of the Ordinance.About the declaration filed and the information under the Common Reporting Standard (CRS), the rules said where a foreign asset or income is reported to the Board under CRS, then prior to any action under any provision of the Ordinance, the Board shall ensure compliance of the conditions under the Protocol for CRS including exchange of information by the person whose information has been received.
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