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ISLAMABAD: The Federal Board of Revenue (FBR) has issued a detailed procedure for the Non-Resident Persons or Permanent Establishment (PE) of Non-Resident Persons seeking exemption or lower rate certificates from the tax department.

The FBR has notified S.R.O. 863(1)/2020 to issue draft amendments to the Income Tax Rules, 2002 here on Monday.

According to the FBR, an online application by a NRP or a PE of a non-resident Person for a certificate under sub-section (1) of section 159 shall be made in the form specified in Part VIIA of the First Schedule to these rules, duly furnishing therewith all the requisite information and documents.

An online application or notice for a certificate under sub-section

(4B) of section 152 and sub-section (5) of section 152 shall be made by a payer in the form specified in Part VII(8) of the First Schedule to these rules, duly furnishing therewith all the requisite information and documents.

The FBR said that an exemption certificate or a reduced rate certificate shall be issued to the Non-Resident Person or PE of a Non-Resident Person only if the

Commissioner Inland Revenue is satisfied that the applicant has furnished return or returns of income when became due, if any, on or before the date on which the application or notice is made.

Commissioner Inland Revenue is satisfied that the applicant is not in default or deemed to be in default in respect of any tax (including penalties, default surcharge, advance tax under section

147 or tax payable under section 137) unless the same is stayed by Commission-IR, Commissioner-IR (Appeal), Appellate Tribunal Inland Revenue, High Court, Supreme Court or any other statutory body under the Income Tax Ordinance, 2001.

The non-resident person or PE of a non-resident person shall file an affidavit to the effect that neither its withholding agent (payer) has filed application or notice for exemption or reduced rate certificate nor payer's application or notice has been rejected. In case of misrepresentation, issued exemption or reduced rate certificate shall be cancelled forthwith.

The resident person or PE of a non-resident person shall file an affidavit that neither the payee (non-resident person and PE of a non-resident person) has filed application or notice for exemption or reduced rate certificate nor has it been rejected. In case of misrepresentation, issued exemption or reduced rate certificate shall be cancelled forthwith.

The applicant shall provide the details of all the contracts made for the sale of goods, rendering or providing of services or for execution of contract in Pakistan.

The Commissioner Inland Revenue may call for information, documents, record in respect of matters arising during the proceedings under section 152(48), 152(5) or 159(1) of the Ordinance or cause further enquiry including but not limited to cohesive business operation.

The Commissioner Inland Revenue may call for any information, documents, record from any person in connection with the application in order to determine that the amount is chargeable to tax being Pakistan -source income under the Ordinance.

The Commissioner Inland Revenue shall, after providing an opportunity of being heard, pass an order within thirty days of receipt of application. However, any period adjourned at the request of the applicant or is postponed due to any proceedings, stay order, alternative dispute resolution proceedings or for any other reason, shall be excluded in the computation of the aforementioned period.

The Commissioner Inland Revenue shall afford an opportunity of being heard to the applicant and, in case of default on the date of hearing, he may proceed ex parte to decide the application on the basis of the available record, the FBR added.

Copyright Business Recorder, 2020