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Finance & Tax

Withholding Tax Statements

If you pay salaries, rent, commission, or a supplier or a contractor, you are almost certainly a withholding agent, and the obligation runs whether or not anyone has told you so. It has three parts: deduct at the correct rate, deposit the tax against the right payment section, and file the statement that reports it. The statement is where most businesses come unstuck, because it has to reconcile to every challan you paid and FBR reads the two against each other.

Start a projectWhat’s included

Scope

What'sincluded

Everything below is in the standard engagement. Anything outside it is agreed in writing before the work starts, never after.

  • Withholding agent status assessed, and the payment sections you actually fall under identified
  • Correct rates applied by section and by the payee’s Active Taxpayer List status on the date of payment
  • Tax deposited through IRIS against the right section, with the CPR retained against the payment it covers
  • Quarterly statements under section 165 filed within 20 days of each quarter end
  • Annual statement filed within 30 days of the end of the tax year, reconciled to all four quarters
  • Section 149 salary withholding handled alongside, for employers running a payroll
  • Notices for non-filing or short deduction answered, and revised statements filed under section 165(2) where needed

Who this is for

Built for three situations

  • Employers running a payroll
  • Companies paying suppliers and contractors
  • Businesses that have had a section 165 notice

Process

How thisactually runs

  1. Agent status

    We establish which of your payments are subject to withholding and under which sections, then tell you what has been under-deducted so far and what that exposure is worth.

  2. Deduction and deposit

    Rates applied by section and by ATL status at the time of payment, and the tax deposited against the correct section, so that the challan and the statement agree by construction.

  3. Statement filing

    The quarterly statement prepared, reconciled to your challans and your ledger, and e-filed within 20 days of the quarter end.

  4. Annual reconciliation

    The annual statement filed after the tax year and reconciled to all four quarters, so the year closes without a mismatch left for FBR to raise two years later.

Deliverables

What you end up holding

  • Filed quarterly statements with FBR acknowledgements
  • The annual withholding statement, reconciled to the four quarters
  • A challan register with every CPR matched to the payment it covers
  • Withholding certificates issued to the parties you deducted from
  • A rate schedule for your payment types, kept current with the Finance Act

What we need from you

Documents required

  • Payment ledger for the quarter, by payee and by payment type
  • CNIC or NTN of every payee you deducted from
  • Payroll sheets for the period, where you deduct under section 149
  • Bank statements covering the payments
  • Tax deposit challans and CPRs already paid
  • Statements already filed for the year, if any

Missing something? Tell us anyway. We can usually work around a gap, and it is better to know before we start.

Next step

Tell us your situation and we will scope it.

Talk to us about it

Scope, fee and dates confirmed in writing before anything starts.

Questions

AboutWithholding Tax Statements

  • Am I a withholding agent?

    Most companies and AOPs are, along with many individuals above a turnover threshold, and the status attaches to the kind of payment rather than to the size of the business. Salary, rent, commission, brokerage, professional fees, contracts and supplies all carry an obligation. We assess it against your actual payment ledger rather than inferring it from your legal form.

  • When is the statement due?

    Quarterly, within 20 days of the end of each quarter, so 20 October, 20 January, 20 April and 20 July, with an annual statement following within 30 days of the end of the tax year. Missing a quarter is a separate default from missing the deduction itself, and both carry a penalty.

  • What happens if I deducted at the wrong rate?

    The shortfall is recoverable from you rather than from the person you paid, and the expense can be disallowed in your own income tax assessment on top of that. Rates turn on the section and on whether the payee was on the Active Taxpayer List on the date of payment, which is why the ATL check belongs at the moment of payment and not at the end of the quarter.

  • Can a statement that has already been filed be corrected?

    Yes. A revised statement can be filed under section 165(2), and it is far better to revise than to leave a mismatch sitting for FBR to find. We prepare the revision with the reconciliation behind it, so the correction explains itself rather than inviting a second question.

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