Developers, builders registered as DNFBPs: FBR defines reporting requirements, role and functions

ISLAMABAD: The Federal Board of Revenue (FBR) has clearly defined the reporting/documentation requirements, role and functions of the developers/builders registered as the Designated Non-Financial Business and Professions (DNFBPs).

Some important decisions have been taken during a meeting held at the FBR House with officials of the National Coordination Committee on FATF to resolve the issues of realtors for the compliance of the DNFBPs. The meeting was also attended by the DG DNFBPs.

Talking to media here on Monday, Muhammad Ahsan Malik, vice president (Punjab) Federation of Realtors (FOR) and general secretary of Real Estate Consultants Association (RECA) DHA, Islamabad/Rawalpindi, stated that the DG DNFBPs has issued instructions to all relevant departments that they should deal with only registered DNFBPs.

The law has not been amended to comply with the FATF requirements, but certain unnecessary conditions for the customer's due diligence of the DNFBPs has been relaxed. The FBR portal would upload the specified requirements for the developers and builders registered as the DNFBPs.

Now, the registered developers and builders are in a position to comply with the laid down rules and regulations without any confusion. First, each developer and builder will have to check the buyer/seller name from the list of the United Nations containing names of 4,500 proscribed persons.

If the name of the buyer/sellers is not on the list, there is no issue for carrying out transactions. However, if any of the names are available in the list, the developer and builder has to immediately report the same. Second, the developer and builder must have the copies of the sale and purchase agreement and the CNICs of the sellers and buyers.

Third, the customer's due diligence is also a requirement for the builders and developers registered as the DNFBP. The buyer and seller would also submit a form about the actual beneficial owner of the property. If anyone is purchasing property on behalf of someone else, the actual beneficial owner must be declared through a form.

In this way, money trail should be specified to determine the actual beneficial owner. Fourth, Cash Transaction Report is also a requirement to be submitted by the developer/builder. Presently, developer/builder is bound to submit the cash transaction report of Rs20 lakh and above.

Majority of the property transactions are being carried out on the FBR value or DC rates. The payment (pay order) should be made from the purchasers bank account pay order pertaining to the declared value of the FBR value or DC rate of the property.

The money trail must be available for the purchase of the immovable properties. Under the law, the developer and builder is also required to maintain records for a period of five years, Malik stated.

The questionnaire for the developers/builders and jewelers are the same and it is difficult to suddenly show compliance with all kinds of laws, conditions and legal requirements. The legal requirements of the DNFBP should be fulfilled by the transferring/registration authorities/societies, ie, the CDA, the LDA, the KDA, Bahria Town, DHAs, and revenue authorities etc, and not by the individual real estate agents, he added.

Out of 500,000 property dealers working across the country, the FBR has registered 22,000 dealers with the DNFBPs, who are filers of income tax returns. The non-filers property dealers would be focused by the Directorate General of DNFBPs. The ultimate objective is that only registered dealers and developers can do business in the market. The record keeping by the developers and builders has been clarified and defined. Now, there is clarity among the dealers about the rules and regulations, he added.

Copyright Business Recorder, 2021