FBR begins collecting individuals’ account details for OECD members
KARACHI: The tax authorities have kicked off a planned program under which they share foreign individuals’ financial-account information with the member countries of the Organization for Economic Cooperation and Development (OECD), sources said on Saturday/
The Federal Board of Revenue (FBR), issued a notification regarding the schedule for exchange of information, will share the details of financial accounts of foreigners, opened after July 1, 2017, with the OECD countries.
“The financial institutions will provide details of all new accounts of foreign nationals opened on or after July 1, 2017 by September 2018,” the FBR said.
Regarding preexisting accounts, it said the financial institutions will provide details by September 2018 of individual high value accounts maintained up to June 30, 2017 and having $1 million.
However, the details of low value accounts and corporate accounts opened before June 30, 2017 would be shared by financial institutions up to September 2019.
The sources said the revenue body would share this information on real-time basis with at least 88 countries from the next fiscal year under an agreement with OECD to curb tax evasion and avoidance.
Those countries would also exchange information with the Pakistani authorities related to bank accounts maintained by Pakistanis in those member countries, the sources added.
The FBR announced to set up a cell at the Large Taxpayers Unit (LTU) Karachi and designated a commissioner Inland Revenue to share and disseminate the information.
An official at the LTU Karachi said the cell would start functioning by December. It will receive information from local financial institutions, including State Bank of Pakistan (SBP), commercial banks, stock exchange, fund managers, etc, and share it with foreign counterparts.
Similarly, the commissioner will share the information received from the Organization for Economic Cooperation and Development (OECD) member countries with the local tax offices for examination of their position that whether those people are in the tax net and paying their liabilities.
In 2016, Pakistan signed OECD’s multilateral convention on mutual administrative assistance in tax matters, which is the most powerful multilateral instrument to control offshore tax evasion and avoidance.
The FBR officials believed Pakistan would be able to have information about those Pakistanis, who had ill-gotten / untaxed money generated in Pakistan and deposited in the foreign banks.
The FBR officials said from January 1, 2018 Pakistani authorities would be able to obtain information about individuals maintaining financial accounts in Organization for Economic Cooperation and Development (OECD) member countries, besides receiving automatic information on annual basis in September every year.