FBR sets new conditions for 10% tax credit on system integration

Profit by Pakistan Today reported that the Federal Board of Revenue (FBR) has set fresh rules for taxpayers seeking a 10% credit on outlays for electronic systems that track production live and record sales. Under a notification issued on Wednesday, the Section 64D credit under the Income Tax Ordinance, 2001 equals 10% of eligible spending, but only in the year those resources are commissioned and linked with the FBR's computerised system. The conditions cover businesses obliged to integrate with FBR systems under income tax law, the Sales Tax Act or the Federal Excise Act, 2005.

Eligible costs cover purchase prices of equipment and software, along with one-time installation expenses and the configuration, interface development and testing needed for integration. Routine running costs, upkeep, yearly service agreements, support after commissioning, telecom and utility bills, salaries, training, consumables and financing charges are excluded. Grants, subsidies, rebates and discounts must be deducted, and recoverable taxes and duties do not count.

Claims must be backed by activation or integration records that the FBR's system generates or confirms, showing the taxpayer, the resource and the operational date, plus invoices, agreements and proof of payment. Investment details must be disclosed in income tax returns or on the IRIS portal schedule, and the same spending cannot be claimed twice. The rules tie eligibility to successful system integration and documented spending.