ISLAMABAD: The Federal Board of Revenue (FBR) has stopped publishing the details of advance rulings issued to the foreign investors since 2018 with growing concerns among non-resident investors over non-processing of advance ruling applications filed with the FBR.
Tax experts told Business Recorder that the concerns were growing within the tax and investment community over the apparent non-processing of advance ruling applications filed by the foreign investors with the FBR. Although the advance ruling regime was introduced under section 206A of the Income Tax Ordinance 2001 to provide certainty and facilitate foreign investment, many applications are understood to have remained pending for periods significantly exceeding the timelines envisaged under the law and rules.
They said that the advance ruling mechanism allows a non-resident investor to seek a binding determination from the tax authorities on the tax consequences of a proposed transaction before making an investment. Under Rule 231A of the Income Tax Rules 2002, an application is required to be processed and a ruling issued within the prescribed period of 90 days from the receipt of a complete application. The purpose of the provision is to provide certainty, reduce disputes and make Pakistan a more attractive destination for foreign investment.
However, the implementation record appears to be quite different. According to information available on the FBR’s website (https://www.fbr.gov.pk/advance-ruling-issued/132245/157) on the date of this publication, only ten advance rulings have so far been issued since the introduction of this provision in 2003, with the last published advance ruling issued back in April 2018 (i.e. more than eight years ago).
Considering the importance of the regime and the volume of foreign investment transactions undertaken over the years, this number appears remarkably low.
The apparent gap between the law and its implementation raises concerns that one of the most important investor-facilitation provisions in the Income Tax Ordinance has become largely ineffective in practice. This is particularly relevant at a time when the government is actively promoting foreign direct investment, ease of doing business and tax certainty.
To enhance transparency and restore investor confidence, the FBR should publish on its website details of all advance ruling applications, including the date of filing, date of disposal and current status of each application, together with aggregate statistics showing the number of applications filed, decided and pending. Such disclosure would help demonstrate whether the statutory timelines are being complied with and would strengthen the credibility of Pakistan’s tax certainty framework for foreign investors, experts added.
Copyright Business Recorder, 2026
Comments