The Central Depository Company of Pakistan Limited (CDC) will facilitate Transfer of Book Entry Securities in the Central Depository System against declaration of assets under Government of Pakistan''s Tax Amnesty Scheme by way of the Voluntary Declaration of Domestic Assets Act, 2018 and the Foreign Assets (Declaration and Repatriation) Act, 2018.
In this regard, CDC, with the prior approval of Securities and Exchange Commission of Pakistan (SECP) has issued a necessary circular detailing the requirements and procedures of such securities'' transfers.
This circular has been made available on CDC''s website http://cdcpakistan.com/circular-notices/ for ready reference. CDC believes that this initiative will help the declarants avail the benefits offered by the government in the Tax Amnesty Scheme.
CDC is the sole depository of Pakistan, holding custody of securities worth Rs 5.3 trillion (equivalent to US$ 44 billion) in electronic format.-PR
According to Central Depository Company, the Government of Pakistan introduced a Tax Amnesty Scheme through the Voluntary Declaration of Domestic Assets Act, 2018and the Foreign Assets (Declaration and Repatriation) Act, 2018 (hereinafter the "Amnesty Scheme").
As per the said Amnesty Scheme, any person as eligible thereunder may declare his undisclosed income and assets to the Federal Board of Revenue by payment of tax at the rate as prescribed under the Amnesty Scheme. Such assets may include securities held in the Central Depository System ("CDS").
CDC has decided, as a matter of policy, to facilitate such transfers owing to declarations made under the Amnesty Scheme. In this regard, a new ground has been prescribed under the CDC Regulations with the approval of the Securities and Exchange Commission of Pakistan for allowing direct transfer of Book-entry Securities as Free Delivery Transaction. A new Reason Code has also been developed in the CDS.
As advised by SECP, the transfer of Book-entry Securities, as aforesaid, shall be subject to the following requirements and Procedures:
a) Any person desiring to transfer securities under the aforesaid scheme, shall submit following documents to CDC:
(i) An Undertaking-cum-Indemnity duly signed by authorized signatories on a format prescribed by CDC (to be placed on CDC website) also containing the consent of the person from whose CDS account the securities are to be transferred along with details of such securities;
(ii) copy of Computerized Payment Receipt submitted with the Federal Board of Revenue as proof of declaration;
(iii) in case of Sub-Account, cover letter of the relevant Participant with request to activate the Reason Code for transfer of securities;
(iv) In case of Investor Account, request for transfer of securities shall be made by the Investor Account Holder along with documents listed in (i) and (ii) above and the Transaction Order; and
(v) Any other relevant document as may be required by CDC.
b) Upon receipt of documents, CDC, after carrying out scrutiny, activate the Reason Code for transfer of securities under intimation to the relevant Participant under controlled environment. Only available securities will be allowed to be transferred.
c) CDC will provide details of securities transfers to NCCPL under the new Reason Code including date of acquisition as provided by the investor for further action at its end.
d) For CGT purposes, NCCPL will consider the value of securities and date of acquisition of securities as per the Amnesty Scheme or as advised by Federal Board of Revenue.
e) Transfer of Book-entry Securities under the new Reason Code will only be allowed till the end of 30thday from the last date of close of period of applicability of the Amnesty Scheme.