Companies Disclose Beneficial Owners

By Published On: March 6, 20232.1 min readViews: 1364

Companies Disclose Beneficial Owners

By Published On: March 6, 20232.1 min readViews: 1364
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Federal Board of Revenue (FBR) has tightened laws pertaining to disclosure of beneficial owners by directing all companies and Association of Persons (AOPs) to provide details by December 31, 2023.

In this regard, the FBR issued SRO 229(I)/2023 to notify draft rules and said that every company and AOP already registered with the revenue body, shall electronically furnish the particulars of its beneficial owners on or before December 31, 2023.

The FBR said that the record of the beneficial owners shall be updated whenever there is a change in any of the particulars of the beneficial owner within 30 days from the date when the change occurs.

In case of non-profit organization as defined under section 2(36) of the Income Tax Ordinance, 2001, the settlor, trustee, founder, promoter, beneficiary, class of beneficiary, as the case may be, will be the beneficial owners of the nonprofit organization.

Provided that where the beneficiary or class of beneficiary of the nonprofit organization is general public, the beneficiary or class of beneficiary of such non-profit organization shall be exempted from the requirement of providing information of beneficial owners under this rule, the FBR added.

In case there is no change in the beneficial owners of the Company or AOP throughout a particular tax year, the Company or AOP as the case may, shall furnish a “Certificate of Confirmation for Beneficial Owner” through Board’s online system along with the Income Tax return to be filed for that tax year.

The FBR said that the beneficial owner who exercise ultimate effective control over a company or AOP through direct ownership rights (through shareholding) of twenty-five percent or more, shall provide the particulars or information, included: Name of beneficial owner; Father’s name/Spouse’s name; Date of Birth; Nationality of beneficial owner(s); CNIC/NICOP/NTN/Passport number or Foreign National Identity number of beneficial owner; Percentage of shareholding or ownership interest held by the beneficial owner; Date of acquisition of ownership interest; and Residential and Commercial address of the beneficial owner.

The FBR said that every company or AOP shall retain the records of all beneficial owners for a period of ten years from the date when the beneficial owners of that company or AOP, as the case may be, cease to be the beneficial owner of that company or AOP.

Furthermore, the FBR would retain the records of beneficial owners of all companies and AOPs registered with the Board for a period of fifteen years from the date when that company or AOP ceases to be registered with FBR.

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Rida Malik

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