How overseas Pakistanis can become a tax filer

You might have heard the word non-resident, but you might not be sure what it means. So, who is considered a non-resident Pakistani? The definition is not very simple. It is essential to differentiate between a resident and a non-resident Pakistani for tax purposes.

Before Finance Act, 2022 a person was treated as a resident Pakistani taxpayer if they were present in Pakistan for a period of 183 days in a tax year (1 July to 30 June).

This means that a person had to stay abroad for more than six months to avoid becoming a resident Pakistani taxpayer. Many wealthy people in the country were misusing this by planning their taxation to avoid becoming a taxpayer of any country.

Now, the Income Tax Ordinance has been amended through Finance Act 2022. According to the Finance Act 2022, the new definition of a resident Pakistani taxpayer is” any individual shall be considered as resident for the tax year if they being a Pakistani citizen, is not present in any other country for more than 182 days during the tax year or who is not a resident taxpayer of any other country”.

This definition has created confusion among taxpayers about whether they have to stay in a foreign country for six months continuously or they could fly in or out of that foreign country. The answer to this question is straightforward: the taxpayer has to stay in the foreign country for 183 days to claim the status of a non-resident Pakistani taxpayer. This can be done by coming in and going out more than once.

This was the basic understanding regarding who is considered a non-resident Pakistani taxpayer. Now we are going to discuss the question that is in the mind of almost every overseas Pakistani national living in a foreign country. If they are considered non-residents for tax purposes, whether they are required to file their income tax return in Pakistan or not?

The answer to this question is every nonresident Pakistani who is earning money in Pakistan or in other words you can say that who is making a taxable income in Pakistan are required to pay income tax on their income generated in Pakistan and filer their income tax return.

Generally, the non-resident person who does not have any Pakistani source of income is not required to file their income tax return in Pakistan. However, they can still avail the status of tax filer in Pakistan by doing so; they can avail themselves of the benefit of paying lower taxes on multiple transactions in Pakistan. It is also essential to know that if you are planning to buy an immovable property or a vehicle in Pakistan, you can save a lot of money by withholding taxes by just filing your income tax return.

How overseas Pakistanis can file their tax return with Befiler?

1. Sign Up on the Befiler through any medium.

• Select your requirement from our range of services.

• Gather all the required information.

• Enter all the required information.

• Reach out to our tax consultant in case you need any help.

• Review your entered information.