After detecting serious discrepancies in ledgers of withholding taxes of multi-national companies for the tax year 2013, Federal Board of Revenue (FBR) has directed its field formation to issue notices for reconciliation of the tax. According to sources, tax offices after receiving instructions from Islamabad have started issuing notices under Rule 44(4) of the Income Tax Rules, 2002 for the reconciliation of withholding taxes.
They added that tax offices in order to reconcile the taxes deducted and deposited by multi-national companies under various provisions of the withholding taxes had now asked the tax-payers to provide complete details of salaries, wages, commission, services, supply contracts, rent, benefits and other expenses.
They said that tax-payers would not only provide aforesaid information, but they would also be required to submit exemption certificates or any other reason for non-deduction of tax to reconcile its financial ledgers with tax offices. Besides selecting cases for audit under Section 177 or Section 214C of Income Tax Ordinance, 2001, the FBR had also ordered its field formation to initiate proceedings for the audit of withholding tax under Section 166 of the Ordinance, they added.
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