The Federal Board of Revenue (FBR) requires certain resident individual taxpayers in Pakistan to file a Foreign Income and Assets Statement under Section 116A of the Income Tax Ordinance, 2001.
For Tax Year 2027, taxpayers with significant foreign income or overseas assets should carefully review their disclosure requirements and ensure that their foreign financial information is properly reported.
Who Must File a Foreign Income & Assets Statement?
A resident individual taxpayer is required to furnish the statement if:
- Foreign income is US$10,000 or more, or
- The value of foreign assets is US$100,000 or more.
The requirement applies to the tax year covering July 1, 2026 to June 30, 2027.
What Information Must Be Disclosed?
The Foreign Income and Assets Statement requires taxpayers to provide relevant details of their overseas financial position, including:
- Foreign properties and real estate
- Overseas bank accounts
- Foreign investments and securities
- Other foreign assets
- Foreign liabilities
- Foreign income earned during the tax year
- Expenditure incurred to earn foreign income
- Foreign assets transferred to another person
- Consideration received from transferred assets
Taxpayers should ensure that the information reported is complete and consistent with their other tax declarations.
Foreign Asset Transfers Must Also Be Reported
Taxpayers should not overlook foreign assets that were transferred during the tax year.
Where applicable, the statement must include details of the transferred foreign asset and the consideration received from the transfer.
Proper documentation of such transactions is important for maintaining an accurate tax record.
FBR Can Require the Statement
FBR has the authority to require a taxpayer to submit the Foreign Income and Assets Statement where there are reasonable grounds to believe that the taxpayer was required to file it but failed to do so.
A taxpayer may receive a written notice requiring submission of the statement within the specified period.
Why Accurate Foreign Asset Disclosure Matters
Foreign asset reporting is an important part of Pakistan’s tax compliance framework.
Taxpayers should ensure that their foreign income, assets, liabilities and related transactions are properly documented and consistent with their income tax return and wealth statement.
Inaccurate or incomplete reporting can create unnecessary tax compliance issues.
What Should Taxpayers Do for Tax Year 2027?
Taxpayers who may fall within the Section 116A requirements should:
- Identify all foreign assets and liabilities.
- Calculate foreign income for the relevant tax year.
- Review overseas bank accounts and investments.
- Maintain records of foreign property and other assets.
- Document foreign asset transfers and consideration received.
- Reconcile foreign information with the wealth statement.
- Ensure the statement is submitted in the prescribed manner.
Xact Legal – Foreign Asset & Tax Compliance
Foreign income and asset reporting can become complex when taxpayers have overseas property, investments, bank accounts or income sources.
Xact Legal provides professional tax advisory and compliance services, including income tax return filing, wealth statements, foreign asset disclosures and tax documentation.
Have foreign income or overseas assets? Contact Xact Legal for professional tax compliance support.