August 9, 2020 (MLN): The Federal Revenue Board (FBR) has issued a draft-rules under the Finance Act 2020 that requires banks to provide information about people who deposited Rs 10 million in accounts or more in a month or made credit card payment of Rs200,000 on a monthly basis.

As per the draft rules, the profit on debt and particulars of account holders who have withdrawn Rs1 million or above in a month will also be shared with the FBR on prescribed forms.

Under the new rules, the banks are required to provide the following details of the account holders in the aforesaid categories: CNIC, NICOP, passport number, NTN, name, the title of account, resident/non-resident status, address, telephone number, account opening date, account number (IBAN), the amount deposited in a month or amount of cash withdrawal during a month, amount of tax deducted and profession/business/occupation of the account holder.

The banks are also requested to provide the following information of account holders to FBR which include: account holders’ deposits statement, credit card payments statement, cash withdrawal statement, profit on debt statement, and details of any information or data as required by the board from the banks.

According to the new rules for banks, the information, required to be furnished under Section 165A of the Income Tax Ordinance shall be provided by the reporting banking company, in the manner as specified in account holders deposits statement, credit card payments statement, cash withdrawal statement and profit on debt statement.

The bank has also been instructed to appoint an officer not later than 30 days after the rules came into effect. The information required to be reported to the board shall be provided by the banking company officer to the FBR.

In case the banking company officer is not nominated within the time allowed as specified in the draft rules, the President or Principal officer of the reporting banking company will be treated as banking company officer.

Every banking company officer shall furnish to the board a monthly account holders deposits statement, credit card payments statement, and cash withdrawal statement as specified in Form A, Form B, and Form C, respectively, for immediately preceding calendar month within seven days of the end of the preceding calendar month.

Every bank officer shall furnish to the board an annual profit on debt statement as specified in Form D for immediately preceding calendar year within three months of the end of the preceding calendar year. Every bank shall furnish to the board any information and documents within the time allowed by the board.

Under the procedures of record keeping for due diligence, the FBR has directed the reporting financial institutions to keep record of the steps undertaken and any evidence relied upon for the performance of the due diligence procedures and measures to obtain such records for at least five years after the end of the period within which the reporting financial institution must report the information required to be reported.

The annual domestic reporting date for filing of common reporting standards reports by reporting financial institutions shall be 31st of May each year.

The common reporting standard reports shall be filed on the AEOI portal on the FBR's official website in the CRS XML Schema prescribed by the Global Forum of Organisation for Economic Cooperation and Development (OECD).

The records maintained under Common Reporting Standards Rules in Chapter XIIA of the Income Tax Rules, 2002 including rule 78K by the reporting financial institutions or any other record maintained by any other person under any law may be required to be furnished along with full and free access to any premises, place, accounts, documents or computers of reporting financial institutions by the FBR or any person authorized by the board to ensure compliance of Common Reporting Standards Rules in Chapter XIIA of the Income Tax Rules, 2002.

The board may under the law compel assistance of any person including the State Bank of Pakistan, the Securities and Exchange Commission of Pakistan, and any such organization, body etc who holds such information that may assist the board to identify and classify reporting financial institutions, non-reporting financial institutions and excluded accounts, and ensure that their identification and classification is as per Common Reporting Standards Rules in Chapter XIIA of the Income Tax Rules, 2002.

36200