Offshore income, assets abroad: Time limitation not made part of Finance Act 2018

ISLAMABAD: The time limitation for taking action against owners of offshore income and assets abroad was removed in 2018 through Finance Bill 2018, but was not made part of the Finance Act 2018.

Highly placed FBR officials told Business Recorder here on Sunday that the Finance Bill 2018 contains an amendment to remove time limitation for taking action against owners of offshore income and assets abroad. Thus, the said provision was in the Bill, but not finally made part of the law. Certain tax experts and consultants have inadvertently published the said amendment as part of the Finance Act 2018.

Now, the FBR has incorporated the said amendment in the Finance Bill 2021.

Earlier, there was a restriction of five years, but now there will be no time limitations after approval of this law from the National Assembly of Pakistan through Finance Bill 2021.

This new clause proposed in the Income Tax Ordinance 2001 will enable the tax machinery for moving against those who possessed foreign income and assets without any bar of time limitations.

The new clause inserted in section 114 of the Income Tax Ordinance 2001 through the Finance Bill 2021 reads as: “Provided further that the time-limitation provided under this subsection shall not apply if the Commissioner is satisfied on the basis of reasons to be recorded in writing that a person who failed to furnish his return has foreign income or owns foreign assets.”

Copyright Business Recorder, 2021