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Saturday, April 1, 2023

Real estate owned by overseas Pakistanis: UAE authorities do not share information

Real estate owned by overseas Pakistanis: UAE authorities do not share information

ISLAMABAD: Tax authorities in the United Arab Emirates (UAE) have shared financial information, including bank accounts of Pakistanis abroad, with the Federal Revenue Board (FBR) on just two occasions.

source told business recorder The UAE tax authority did not share information with FBR on real estate owned by overseas Pakistani residents in the UAE. The details of the real property will not be shared with the Pakistan tax authorities. However, UAE authorities share financial information such as bank account details, shares/shares/trusts, etc. of overseas Pakistanis.

So far, UAE authorities have shared only twice as much information on financial transactions as Pakistanis abroad.

Owned by Pakistani residents: FBR starts taxing hundreds of foreign properties

The International Tax Administration FBR is coordinating with the UAE authorities on all incoming and outgoing Exchange of Requested Information (EOIR) and Spontaneous Exchange of Information (SEOI).

Under the Exchange of Information Act, information requested by a foreign jurisdiction through an inbound EOIR can be obtained directly within the FBR (information on tax returns, taxes paid, etc.) or with third parties such as banks, employers or any other organisations.

Common types of information include identity details of owners/beneficial owners of accounts, companies, corporations, trusts etc., income tax returns filed in foreign jurisdictions and details of taxes paid abroad or residence status; owned or used property; income and expenses; accounting information such as financial accounts, balance sheets, profit and loss statements; banking information such as bank account balances and transactions; directors and shareholders of companies; company registration and registration details.

It is worth mentioning that the concerned Automatic Exchange of Information (AEOI) district has taken the necessary action for income tax filers who declare rental income from foreign properties held abroad.

Sources say there are hundreds of such “foreign source real estate income” cases pending in foreign jurisdictions including the UK, US, Turkey, Spain, Canada and the UAE.

However, FBR has exercised its right to tax such foreign rental income in Pakistan, and owners of such properties are entitled to a tax credit in their income tax returns for tax paid in the foreign jurisdiction.

Copyright Business Recorder, 2023

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