company registration in FBR

company registration in FBR

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Company Registration with FBR (Federal Board of Revenue) in Pakistan: A Comprehensive Guide

Registering a company with the Federal Board of Revenue (FBR) is an essential step for businesses operating in Pakistan. The FBR is the governing body responsible for overseeing tax compliance, collection, and enforcement in the country. Once a company is registered with FBR, it becomes eligible for various tax-related benefits, including tax identification, filing tax returns, and compliance with other fiscal requirements.

This article will guide you through the process of company registration with FBR, the required documents, and the benefits of registration.

Importance of Company Registration with FBR

1. Tax Compliance: Registering with FBR ensures that the company complies with Pakistan's tax laws. It allows the business to file taxes accurately, pay taxes on time, and avoid legal penalties.


2. Obtaining a National Tax Number (NTN): A company registered with FBR will receive a National Tax Number (NTN). This is a unique identifier for tax purposes and is required to conduct business, open bank accounts, and sign contracts.


3. Business Credibility: Being registered with FBR enhances the business’s credibility, as it demonstrates the company is operating legally and in compliance with government regulations.


4. Eligibility for Government Contracts: Many government projects and tenders require businesses to be registered with FBR. This certification ensures that the company is eligible for such opportunities.


5. Access to Tax Benefits and Incentives: Companies registered with FBR are entitled to various tax exemptions, incentives, and deductions, as per the government’s tax policies, which can help reduce the financial burden on businesses.

Types of Registration with FBR

1. National Tax Number (NTN): Every company operating in Pakistan needs to obtain an NTN from the FBR. This number is required for tax filing, opening business bank accounts, and other legal procedures.


2. Sales Tax Registration: Companies engaged in the supply of goods or services must register for sales tax if their taxable turnover exceeds a certain threshold. Sales tax registration is mandatory for businesses involved in trading, manufacturing, or providing taxable services.


3. Income Tax Registration: Companies that earn taxable income need to register with the FBR for income tax purposes. This registration allows businesses to file their income tax returns and fulfill tax obligations.


4. Withholding Tax Registration: Certain businesses that are involved in withholding taxes on payments such as salaries, contracts, and imports must also register for withholding tax with the FBR. Visit

Steps for Company Registration with FBR

The process of registering a company with FBR is relatively straightforward but involves several steps:

1. Obtain Company Incorporation from SECP (Securities and Exchange Commission of Pakistan)

Before registering with FBR, the company must first be incorporated with the Securities and Exchange Commission of Pakistan (SECP). The SECP is responsible for registering legal entities, such as private limited companies, public companies, and limited liability partnerships.

Once the company is incorporated with SECP, you will receive the Certificate of Incorporation, which will be required for FBR registration.

2. Prepare Required Documents

The following documents are typically required for company registration with FBR:

• Certificate of Incorporation from SECP.


• Company’s Memorandum of Association.


• Company’s Articles of Association.


• CNICs (Computerized National Identity Cards) of directors or owners.


• Proof of Business Address: This can be a utility bill or rent agreement.


• Bank Account Details (if already opened).


• Other Relevant Documents: This may include an NTN application form, details of business activities, and any licenses or permits required for the business.

3. Register for NTN (National Tax Number)

To begin the registration process with FBR, the company must apply for an NTN. The steps are as follows:

• Visit the FBR’s official website (www.fbr.gov.pk) and go to the NTN registration section.


• Create an account by registering on the FBR’s online portal, IRIS.


• Complete the NTN registration form with the required company details, including the business’s name, date of incorporation, and contact information.


• Upload the required documents, including the Certificate of Incorporation from SECP and proof of identity for the directors or owners.


• Submit the application for processing.

Once your application is submitted, FBR will process it and issue the National Tax Number (NTN).

4. Sales Tax Registration (if applicable)

If the company deals in the sale of goods or services subject to sales tax, it must also apply for sales tax registration with FBR.

• After logging into the IRIS portal, navigate to the Sales Tax Registration section.


• Fill in the necessary details related to your business’s taxable activities.


• Submit the form for approval. If approved, you will receive a Sales Tax Registration Number (STRN), which is required for collecting sales tax from customers and filing sales tax returns.

5. Income Tax Registration

Once registered for NTN, the company must also comply with income tax registration. This is essential for filing income tax returns.

• Income tax registration is linked to the NTN and is generally part of the same process.


• The business will be categorized under Corporate Tax or Non-Corporate Tax depending on the type of entity.

6. Withholding Tax Registration (if applicable)

Certain companies may also need to register for withholding tax. This is relevant for businesses that withhold taxes on payments made to contractors, employees, or other parties.

• The company needs to register under the Withholding Tax category if it is required to deduct taxes under sections such as Section 148, 149, or 152 of the Income Tax Ordinance.

7. Payment of Taxes

Once the registration process is complete and the company receives its NTN, it must start filing periodic tax returns:

• Income Tax Returns: Depending on the tax year, the company will need to file annual income tax returns.


• Sales Tax Returns: Companies that are registered for sales tax must file monthly or quarterly sales tax returns.


• Withholding Tax Filings: If applicable, withholding tax returns must be submitted based on the deductions made by the company.

Benefits of FBR Registration

1. Legality: Registration with FBR ensures that the company is operating legally within Pakistan, fulfilling all tax obligations.


2. Access to Government Schemes: FBR registration opens the door to various government schemes and incentives, such as tax rebates or credits.


3. Tax Deductions and Exemptions: Registered companies can benefit from tax deductions for eligible business expenses, which can reduce their taxable income.


4. Simplified Financial Transactions: FBR registration makes it easier for the company to engage in financial transactions, including business dealings, banking, and obtaining loans.


5. Avoidance of Penalties: Proper registration helps avoid penalties or fines from tax authorities for non-compliance.

Conclusion

Registering your company with the Federal Board of Revenue (FBR) is a crucial step in establishing a legitimate and compliant business in Pakistan. It enables businesses to obtain their National Tax Number (NTN), register for sales tax, file income tax returns, and comply with withholding tax requirements. The process is straightforward but requires the submission of various documents, including the Certificate of Incorporation from SECP.

By ensuring proper registration with FBR, businesses can enjoy numerous benefits, including tax exemptions, government incentives, and improved credibility in the market. It is essential for business owners and entrepreneurs to understand the importance of FBR registration and to ensure timely compliance with tax regulations.

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