Non-resident shippers & charterers: FBR proposes e-mechanism for filing tax returns, paying taxes

ISLAMABAD: The Federal Board of Revenue (FBR) has proposed a comprehensive electronic mechanism for filing of income tax returns and payment of taxes by non-resident shipowners, charterers and authorised shipping agents, linking vessel-related information maintained by the Pakistan Single Window (PSW) with the Board’s IRIS system.

According to a draft notification issued by the FBR, the proposed amendments seek to substitute Rule 37 of the Income Tax Rules, 2002, governing returns furnished under Section 143 of the Income Tax Ordinance, 2001. The proposed framework envisages the automatic generation of electronic returns against each Vessel Intimation Report (VIR), electronic linkage of tax payments with the relevant vessel and taxpayer identification numbers, and verification of tax compliance before confirmation is transmitted to Customs authorities.

The FBR has invited objections and suggestions from all persons likely to be affected by the proposed amendments within seven days of publication of the notification in the official Gazette. The Board will consider any objections or suggestions received within the prescribed period before proceeding further.

Under the proposed Rule 37, returns required under Section 143 of the Ordinance would have to be furnished through the specified electronic return made available on the FBR’s computerised IRIS system. The return would contain such particulars, declarations, statements, validations and system functionalities as may be specified by the Board from time to time. The return would also have to be accompanied by declarations, statements, certificates, documents and electronic records specified in the electronic return, the Ordinance, the rules or any notification, circular, instruction or guideline issued by the FBR. Electronic filing would be carried out in accordance with Rules 73 and 74 through IRIS or any other electronic mode specified by the Board.

The draft amendments envisage electronic transmission of vessel information by the PSW to IRIS upon receipt of a Vessel Intimation Report. The information would be transmitted on a VIR basis and would include the vessel’s name, estimated time of arrival, expected time of departure, VIR number and the National Tax Numbers (NTNs) of the ship’s master or authorised shipping agent filing the report.

The system would also receive the NTNs of all shipping agents and co-loaders filing manifests in respect of the same VIR, together with any other information, particulars or electronic data specified or agreed upon for exchange between the FBR and the PSW.

Registration particulars of shipping agents maintained by the PSW would be electronically integrated with IRIS in a manner agreed upon by the two systems. Any amendment or update to the transmitted information would also be electronically reflected in IRIS under the agreed arrangements.

Under the proposed procedure, IRIS would automatically generate an electronic return against the corresponding VIR upon receipt of the relevant information. The return would be made available in the IRIS account of the ship’s master or the authorised shipping agent filing the VIR, as applicable.

The draft provides that only one electronic return would be generated against each distinct VIR. The return would display system-generated information and functionalities, including the NTNs of the ship’s master or authorised shipping agent and all shipping agents and co-loaders associated with the relevant vessel report.

It would also reflect the gross amount earned from the voyage, including freight, container detention charges, container service charges, terminal handling charges and other receipts chargeable to tax under Section 7 of the Ordinance, as declared through the specified Payment Slip Identification Numbers (PSIDs). Tax paid through the corresponding Computerised Payment Receipts (CPRs) would also be reflected in the return.

The ship’s master, authorised shipping agent and co-loaders associated with the relevant VIR would be required to generate the specified PSID against that VIR and furnish the particulars relating to freight and tax liability required by the FBR.

Payments made through the specified PSID would automatically generate a CPR, which would be electronically linked with the relevant VIR and corresponding NTN. The payment details would then automatically populate the relevant electronic return.

The authorised shipping agent would also be permitted to generate a PSID and discharge tax liability relating to its own freight or any unpaid liability associated with the relevant VIR.

A key feature of the proposed framework is that an electronic return would remain pending and could not be submitted until all payments required in respect of the relevant VIR had been made and the corresponding CPRs electronically linked with the return. The ship’s master or authorised shipping agent would be required to furnish the return after completing all prescribed requirements. At the time of filing the electronic return or applying for an extension under Section 143, the ship’s master or authorised shipping agent would also have to submit an electronic declaration confirming that the return had been furnished on behalf of all shipping agents and co-loaders associated with the relevant VIR. The declaration would further confirm that the information furnished was true, complete and correct, and would be authenticated in the manner specified by the FBR.

The draft amendments have also prescribed conditions for seeking an extension under sub-section (4) of Section 143 of the Ordinance. An application would have to be submitted before the vessel’s departure, clearly stating the reasons for seeking an extension.

The applicant would be required to provide the estimated gross amount chargeable to tax under Section 7 of the Ordinance and the corresponding estimated tax liability. An undertaking would also have to be furnished confirming that the return required under Section 143(1) would be submitted within the extended period allowed by the Commissioner.

The application would have to include relevant voyage-related documents, including bills of lading, cargo manifests, freight manifests, charter party agreements, freight invoices, statements of freight collected, port clearance certificates and any other documents or information required by the Commissioner to determine and verify the estimated tax liability.

In addition, the applicant would have to furnish security equivalent to the estimated tax liability. The proposed rule allows such security to be provided in the form of a bank guarantee, pay order or post-dated cheque, with the date on the cheque not exceeding 30 days from the date of the ship’s departure.

Under the proposed arrangements, IRIS would electronically transmit confirmation to the PSW once the return had been filed and tax paid, or an application for an extension under Section 143 had been approved. The PSW would make the confirmation available to the Collector of Customs or another officer authorised by the FBR for the purposes of Section 143(5) of the Ordinance.

The PSW would acknowledge receipt of the electronically transmitted confirmation and record the relevant reference number, date and time.

The proposed rule further provides that information furnished through the PSID and CPR mechanism would form part of the record maintained under the Ordinance. The Commissioner or any officer authorised by the FBR could use this information for assessment, amendment, audit, verification, enforcement, recovery or any other proceedings under the Ordinance.

Every shipping agent, co-loader, authorised shipping agent, non-resident shipowner, charterer, operator, ship’s master or other person associated with the relevant VIR would also be required to furnish books of account, freight records, manifests, agreements, electronic records and other information whenever requisitioned by the Commissioner or an authorised officer.

Copyright Business Recorder, 2026