11/09/2022
FBR has made mandatory for companies to disclose beneficial ownership in order to bring transparency in the system.
As per FBR source the previously disclosing beneficial ownership was not mandatory so natural person could not be identified.
“Previously companies and Association of Persons (AOPs) were not required to disclose the natural individuals who are ultimate beneficial owners,” an official said, adding that the beneficial ownership could be hidden through intervening companies and trust.
In order to bring transparency and to remove the obscurity, as per best international practices, companies and AOPs are now required to disclose details of their beneficial owners who are natural persons.
The sources said that in order to bring the changes into the statute a definition of term ‘beneficial owner’ was provided by inserting a new Claus (7A) in Section 2 of the Income Tax Ordinance, 2001.
“Corresponding new Section 181E has been inserted in the Ordinance, whereby every company and association of persons will furnish electronically, particulars of its beneficial owners and will be required to update these particulars as and when there is a change in particulars of beneficial owners.”
The sources said that in case of failure, penalty of Rs 1 million has also been prescribed by incorporating entry No. 30 in the Table, in sub-section (1) of Section 182 for each default of company or association of persons who contravenes the provisions of Section 181E of the Ordinance.