Procedure for issuing FBR, collection of capital value tax

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ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday released the procedure and collection of Capital Value Tax (CVT).

The government, through the Finance Act 2022, imposed a capital value tax on the sale of real estate and motor vehicles.

Here is the procedure and collection of the CVT.

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Declaration of assets. – (1) Any person liable for capital value tax on the assets referred to in paragraphs (b) and (c) of subsection (2) of section 8 of the Finance Act 2022 shall file the electronic declaration in Iris as indicated in form A attached to these regulations.

(2) The value of foreign assets is converted into Rupees using the ready-to-use exchange rates for revaluation to market notified by the State Bank of Pakistan applicable for the last day of the fiscal year.

Returns to be filed by persons levying capital value tax on motor vehicles. – (l) Every motor vehicle registration authority or manufacturer or person selling a motor vehicle at auction who is liable to levy CVT in respect of a motor vehicle in Pakistan shall provide the Commissioner with an electronic declaration quarterly in Iris in accordance with the schedule mentioned in subsection (2) of Article 165 of the Order.

(2) Any person liable to collect CVT in respect of a motor vehicle in Pakistan shall also provide the Commissioner with an annual electronic declaration in Iris for the relevant tax year within thirty days of the end of the tax year, in addition to the return to be filed under subrule (1) of this rule.

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(3) The provisions of subsections (2A), (2B) and (4) of section 165 of the Ordinance shall apply, to the extent relevant, to statements filed under this rule. .

(4) The declaration is filed in the manner provided in Iris.

Collection of capital value tax. (1) Tax to be collected by a licensing authority, manufacturer or person selling a motor vehicle at auction shall be paid by way of credit to the Federal Government by means of a Computerized Payment Receipt (CPR) or a SWAPS Payment Receipt (SPR) as set out in Form “B” attached to these Rules.

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(2) The person liable to pay tax on foreign assets or assets specified by the federal government shall pay the tax as a credit to the federal government through a computerized payment receipt (CPR) at the time of the tax return for the tax year is due for the payment of tax on foreign movable property, as indicated in the form “Cl” and for the payment of tax on foreign immovable property, in accordance with form “C-2” annexed to these rules.

(3) All capital value tax monies levied under Section 8 of the Finance Act 2022 shall be paid as a credit to the Federal Government by payment to the Treasury or at authorized branches of the State Bank of Pakistan or the National Bank of Pakistan, –

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(i) the same day if collected by or on behalf of the government;

(ii) in other cases, this amount must be paid within one week from the date of such collection.

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