FBR stops processing advance ruling applications

According to Business Recorder, the Federal Board of Revenue has ceased releasing particulars of rulings granted to overseas investors, while non-resident investors voice growing concern over applications left unprocessed. Tax experts said the unease is spreading among practitioners and investors over pending filings lodged with the FBR by foreign investors. Created under the Income Tax Ordinance 2001, the advance ruling regime was meant to bring certainty, yet numerous filings reportedly sat unresolved well past the timelines set by law and rules.

Rule 231A of the Income Tax Rules 2002 gives the FBR 90 days from receiving a complete application to issue a ruling, which lets a non-resident secure a binding answer on how tax applies to a planned deal before investing. Yet information on the FBR website shows only ten advance rulings issued since the provision was introduced, with the last published one dated April 2018. The report considers that count strikingly small given how many foreign investment deals have taken place over the years.

Experts said the gap between law and practice raises concern that one key investor provision has largely stopped working, as the government promotes foreign direct investment. They want the FBR to publish each application's filing date, disposal date and status, along with aggregate counts of filed, decided and pending cases, which would show whether statutory timelines are met.