FBR releases details of industrial amnesty scheme

The FBR releases details of industrial amnesty scheme

The Federal Board of Revenue (FBR) on Saturday released details of the amnesty scheme for the industrial sector and encouraged traders to invest in industrial enterprises with their undisclosed assets.
Details were released in an Income Tax Circular 13 of 2022. The amnesty package provides incentives for three sectors, including industrial development, rehabilitation of damaged units and foreign investment in the industrial sector. According to the details, the concessions are provided in case of adjustment of business losses by acquiring the company. A new section 59C has been inserted in the ordinance under which the company being acquired is subject to the latest tax year, the loss is allowed to be adjusted for.
The company that has been acquired can adjust the said losses for a period of three tax years till the tax year 2026. If this ailing industry fails to recover then the adjustment of these losses will be refunded in the next three years. ۔
Benefit under this section will not be available for any integration or merger scheme, the definition of a sick industrial unit whose losses are available for adjustment under this scheme is provided in this section.
Rehabilitation of ailing industrial unit requires maximum production capacity which was obtained before the company became ill. The said certificate is required to be filed with the return of income for 2026.Section 65H has been inserted in the ordinance to encourage industrial development, under which all non-resident Pakistani citizens who have been non-resident for more than five years and resident Pakistani citizens can avail 100% benefits once and for all. They can receive tax credits equal to remittances sent to Pakistan as equity in foreign currency through a common banking channel in a dedicated rupee account opened by the company through an industrial affidavit on or after March 1, 2022.The said industrial affidavit is required to start its commercial production by June 30, 2024 and the tax credit will be available for adjustment in lieu of payable tax for the year in which the commercial production starts and if it is not adjusted then it may be extended Up to five years.
The resident can send foreign exchange to Pakistan from the assets declared under section 116 or 116A of the Ordinance, the minimum equity investment to avail the benefit under this section would be Rs. 50 million and State Bank of Pakistan will decide the method of delivery of foreign exchange in Pakistan.

The scheme offered under this section shall not apply to any company or industrial affidavit that has been issued by any company or by pre-existing industrial affidavit or  through plant transfer by any means before the date of March 1, 2022.

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