FBR to Issue Procedure Regarding CVT on Foreign Assets Held by Pakistanis

The Federal Board of Revenue (FBR) will issue a detailed procedure for the payment, collection and recovery of the capital value tax (CVT) on foreign assets owned by resident Pakistanis. In this regard, the Sindh High Court (SHC) on Thursday directed the FBR to prescribe the time, mode, and manner for the payment of collection and recovery of the capital value tax (CVT) on foreign assets imposed through the Finance Act, 2022. The Federal Board of Revenue (FBR), through the Finance Act 2022, imposed capital value tax (CVT) on foreign assets without prescribing any time, mode, and manner for the payment of collection and recovery of the tax. Under the Finance Act 2022, there is no prescribed procedure for the payment of collection and recovery of the CVT on foreign assets. The SHC will examine the procedure after notification by the FBR. The SHC, in its order, stated, “The petitioners have filed a statement along with notices issued by the Deputy Commissioner Inland Revenue (IR) to different petitioners, whereby, according to the counsel, the petitioners are required to pay the CVT on foreign assets, whereas, according to the learned counsel, no mechanism has been provided so far through notification by the FBR as per clause (4) of sub-section (11) of Section 8 of the Finance Act, 2022, relating to the collection, recovery, and refund or any other matter in respect of the CVT. It has been prayed that the impugned notices may be suspended.” This aspect of the matter will be examined on the next date of hearing. However, the respondents shall ensure that before the proceedings for the recovery of the amount of CVT on foreign assets, which is the subject matter of the instant petitions, the compliance of law and the relevant provision relating to the charge of the CVT including time, mode, and manner for collection and recovery to be prescribed through the notification by the FBR, shall be taken into consideration, SHC order read.