The Pakistan Tax Bar Association (PTBA) has asked for a larger bench to be set up in order to solve a tax confusion. This confusion affects Pakistanis who own property in the UAE and the UK. The PTBA wants the Appellate Tribunal Inland Revenue (ATIR) to form a larger bench to give a clear answer about whether foreign property income should be taxed in Pakistan.
Why Is PTBA Asking for a Larger Bench?
The PTBA says that there have been conflicting decisions made by smaller benches. These decisions are causing confusion. They pointed out that, in the past, when smaller benches made different decisions, it led to chaos and complications. The PTBA believes that having a larger bench will help clear things up and give a final answer.
The Problem with Conflicting Decisions
There have been two different opinions from the Lahore Registry and the Islamabad Registry.
- Lahore Registry: In 2022 and 2024, it ruled that rental income and capital gains from foreign properties, like those in the UAE and UK, are not taxable in Pakistan.
- Islamabad Registry: However, in November 2022, it ruled that rental income from UAE properties should be taxed in Pakistan.
What Does PTBA Want?
The PTBA has sent a letter to ATIR urging them to set up a larger bench. They hope this will bring clear guidelines about whether or not foreign income should be taxed in Pakistan. The PTBA believes that a larger bench can provide a final solution to the issue.
Why Is This Important?
Many Pakistanis who own properties abroad are unsure if they need to pay taxes on the rental income or capital gains they earn from those properties. The conflicting decisions from different benches have caused a lot of uncertainty.
By having a larger bench, PTBA hopes that the tax rules will be clearer and applied the same way for everyone.
Tax Decisions on Foreign Property Income
| Region | Decision |
|---|---|
| Lahore Registry | No tax on rental income and capital gains from foreign property (2022, 2024) |
| Islamabad Registry | Tax on rental income from UAE properties (November 2022) |
| PTBA’s Request | Formation of a larger bench for a consistent decision |
Summary
The PTBA is asking for a larger bench to make sure the rules about taxing foreign property income are clear and consistent. This will help Pakistanis who own property abroad know exactly what to do with their rental income and capital gains. With a larger bench, the PTBA hopes to bring a final solution to this issue.
