How to Register Builder & Developer with FBR
The Prime Minister of Pakistan, Imran Khan, announced an incentive package on April 3, 2020 for the Construction Sector aimed to increase employment opportunities in the country. To give effect to the incentive package, as the Senate and National Assembly are not in session, the President of Pakistan has promulgated the Tax Laws (Amendment) Ordinance, 2020 (‘Amendment Ordinance’) on April 17, 2020.
As the Presidential Ordinances have an effect for a period of 120 days, it is expected that the amendments made through the Amendment Ordinance will be incorporated through the forthcoming Finance Bill, 2020. The Amendment Ordinance inter alia provides for a scheduler based fixed tax regime for Builders and Developers for new and existing incomplete projects, besides providing certain conditional tax immunities for investments by the investors as well as purchasers.
Prior to this Amendment Ordinance, Builders and Developers were required to pay income tax on net-income basis. The incentive package is envisaged to generate employment for the under-privileged segment of the society in these challenging times besides stimulating the economic activity in other allied industries of the Construction Sector.
A new provision section 100-D has been introduced in the Income Tax Ordinance, 2001 (the ‘Ordinance’), prescribing a scheduler based fixed tax regime for Builders and Developers on the basis of project area in respect of their income from sale of building or sale of plots, for tax year 2020 and on wards.
Necessary Rules to that effect have been enacted by way of insertion of Eleventh Schedule to the Ordinance. Similar to other scheduler based taxation provisions, all other provisions of the Ordinance (including recovery of tax not paid and matters connected therewith) not specifically covered under section 100-D and Eleventh Schedule will remain applicable on Builders and Developers. For detail watch the step by step registration process
A similar fixed tax regime for builders and developers whereby tax was payable on the basis of area was also introduced though Finance Act, 2016 by way of sections 7-C and 7-D of the Ordinance, which was subsequently restricted through Finance Act, 2017 to only such Projects, which were initiated and approved during tax year 2017.
As such, builders and developers not covered by sections 7-C and 7-D were required to pay tax on net income basis. he Prime Minister of Pakistan, Imran Khan, announced an incentive package on April 3, 2020 for the Construction Sector aimed to increase employment opportunities in the country.
To give effect to the incentive package, as the Senate and National Assembly are not in session, the President of Pakistan has promulgated the Tax Laws (Amendment) Ordinance, 2020 (‘Amendment Ordinance’) on April 17, 2020. As the Presidential Ordinances have an effect for a period of 120 days, it is expected that the amendments made through the Amendment Ordinance will be incorporated through the forthcoming Finance Bill, 2020. The Amendment Ordinance inter alia provides for a scheduler based fixed tax regime for Builders and Developers for new and existing incomplete projects, besides providing certain conditional tax immunities for investments by the investors as well as purchasers.
Prior to this Amendment Ordinance, Builders and Developers were required to pay income tax on net-income basis. The incentive package is envisaged to generate employment for the under-privileged segment of the society in these challenging times besides stimulating the economic activity in other allied industries of the Construction Sector.
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