ISLAMABAD (August 17 2004): Six foreign investors have approached Central Board of Revenue (CBR) for obtaining 'advance ruling' on income tax matters before making investment in Pakistan.
Official sources told Business Recorder here on Monday that the tax authorities would examine their cases and sectors in which investment is being made for issuance of advance ruling through procedure notified through Income Tax Rules 2002.
The cases would be taken up with the committee for processing of applications filed by the non-resident companies interested in obtaining ruling.
The committee will be headed by Chairman CBR and Member Direct Taxes and a Senior Joint Secretary, Ministry of Law, Justice and Human Rights will be members of the committee.
Officials said that the facility of advance ruling was notified in fiscal 2003-2004 to facilitate the foreign investors. However, few foreign investors and non-resident companies approached for availing themselves of the facility of advance ruling. So far only six companies have contacted the Board for availing this facility.
The committee will have the authority to examine the application filed by a non-resident company. However, CBR is bound to finalise application on 'advance-ruling' within 90 days of its filing.
According to the procedure, a non-resident person desiring an advance ruling under section 206A of the Ordinance, 2001 will make an application to the CBR in the form set out in the Schedule of the draft notification.
Elaborating definition of 'advance ruling', the CBR clarified that it means determination by the committee in relation to the transaction, which has been undertaken or is proposed to be undertaken by a non-resident person the question of law specified in the application.
The advance ruling will be binding on the committee only in respect of the specific transaction on which such advance ruling is issued. The advance ruling shall continue to remain in force unless there is a change in facts or in the law on the basis of which the advance ruling was pronounced.