KARACHI: Federal Board of Revenue (FBR) Commissioner Inland Revenue (IR) Maqsood Jahangir issued clarification about a news item appearing in a section of press on 28.6.2019 (Friday).
The clarification stated “the seminar held last day at the Federation House was with reference to “ADO, 2019” and it was restricted to the extent of “Awareness Seminar on Assets Declaration Ordinance, 2019”. The taxation of rental income of Dubai properties, in Pakistan is beyond the scope of ADO, 2019 and it was accordingly explained there. The issue of taxation of rental income is restricted as per the Dubai Taxation Treaty with UAE which overrides the tax laws of contracting states. The relevant Article 6 of the said Treay has used the word “may be taxed ins such other state” instead of “only” or “shall be” taxed in contracting state.
Therefore, the rental income of Dubai properties is chargeable to tax in Pakistan because there is no tax in Dubai on the rental income from properties. The taxpayers have to declare the rental income in Pakistan, as per Treaty provisions read with the Income Tax Ordinance, 2001.”
The FBR clarification further stated that the report appeared in a section of press is firstly out of contest as not covered within the scope of ADO, 2019 and beyond the mandate of the seminar conducted, the clarification concluded as saying.
