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January 11, 2024

Pakistan's requirement to furnish ultimate beneficial owner particulars by 31 December 2023 still lacks prescribed electronic submission format

  • Every company and Association of Persons (AOP) is required under the Pakistan income tax law to electronically furnish the particulars of its beneficial owners to the Federal Board of Revenue (FBR)
  • The FBR issued rules in August 2023 and prescribed mode and manners to furnish the information on current beneficial owners by 31 December 2023
  • However, as of 11 January 2024, the related form has not been made available on Iris for furnishing the required particulars.

The Pakistan Federal Board of Revenue (FBR) issued rules in August 2023 for furnishing particulars of existing ultimate beneficial owner by 31 December 2023, but to date no format has been prescribed to submit the information electronically.

The Finance Act, 2022, introduced a new section 181E in the Income Tax Ordinance, 2001 (the Ordinance), which requires every company and Association of Persons (AOP) to electronically furnish to the FBR the particulars of its beneficial owners. Accordingly, the FBR (through SRO 1117(I)/2023, dated 28 August 2023) inserted a new Chapter XIIIA titled as "Record of Beneficial Owners" in the Income Tax Rules. A summary of these rules follows.


  • Every company and AOP, at the time of their initial registration with the FBR, are mandated to electronically provide details of their beneficial owners through the FBR's online portal.
  • Companies and AOPs that are already registered must furnish the particulars of their beneficial owners on or before 31 December 2023.
  • Form BOF-01 assists in identifying the beneficial ownership through a cascading process and specifies the particulars that the company or AOP needs to provide/report.
  • If there are any subsequent changes in these particulars, the company or AOP must update the relevant records within 30 days from the date the change occurs.
  • For a nonprofit organization (NPO), settlors, trustees, founders, promoters, beneficiaries or a class of beneficiaries will be considered as the beneficial owners of the NPO.
  • If a beneficiary or class of beneficiary of the NPO is the general public, the requirement to provide information of beneficial owners does not apply.
  • If there is no change in the beneficial owners of a company or AOP throughout a particular tax year, a "Certificate of Confirmation for Beneficial Owner" as prescribed in Form BOF-02 must be submitted with the company's or AOP's income tax return to be filed for that tax year.


  • "Beneficial owner" means a natural person who either -
    1. Ultimately owns or controls a company or AOP, whether directly or indirectly, through at least 25% shares or voting rights
    2. Exercises ultimate effective control, through direct or indirect means, over the company or AOP, including control over the finances or decisions or other affairs of the company or AOP
  • "Chain of ownership" means all the legal entities and the legal arrangements through which the ownership rights (shareholdings) of a company or AOP are ultimately held by the natural person.
  • "Contractual association" means the legal tie or contractual tie of two or more legal entities and/or legal arrangements to undertake joint investments and/or joint ventures.
  • "Direct means" means (i) exercise of control by natural person, including exercise of ultimate control over a company or AOP through direct ownership (i.e., without having ownership of an intervening legal person or persons between the natural persons and the company or AOP) or (ii) exercise of control through direct voting rights.
  • "Indirect means" means exercise of control through means other than the direct means, and includes means of control through (i) chain of ownership, (ii) joint control arrangement, (iii) indirect voting rights, (iv) contractual associations, (v) personal and/or family connections, or (vi) senior managerial position.
  • "Joint control arrangement" means a situation where two or more natural and/or legal persons, each having ownership or voting rights of less than 25%, but their aggregate ownership or voting rights is 25% or more in a company or AOP and exercise or may exercise control over that company or AOP for being associates to each other.
  • "Ultimate effective control" means a situation in which ownership or control is ultimately exercised through direct and/or indirect means.

Identifying the beneficial owner through cascading process

Rule 83D provides a cascading process for identifying and recording information of beneficial ownership through three successive tests, each of which is to be applied when a previous test has been applied but has not resulted in the identification of a beneficial owner.

Test 1 — Ownership and voting rights — Aims to identify beneficial owner(s) who exercise(s) ultimate effective control over the company or AOP through direct ownership (shareholding), a chain of ownership or joint control arrangement (indirect ownership) and voting rights

Test 2 — Contractual associations and personal/family connections — Aims to identify the beneficial owner(s) who exercise(s) ultimate effective control over the company or AOP through contractual associations and personal or family connections with the owners/directors/management of the company or AOP

Test 3 — Senior managerial position — Aims to identify the beneficial owner (or owners) who exercises ultimate effective control over the company or AOP through senior managerial positions or other indirect means

Retaining records of beneficial owners

Every company or AOP must retain the records of all beneficial owners for a period of 10 years from the date when the beneficial owners of that company or AOP cease to be beneficial owners. The FBR will retain the records of beneficial owners of all companies and AOPs registered with the FBR for a period of 15 years from the date when that company or AOP ceases to be registered.

Penalty for noncompliance of section 181E

If a company or AOP fails to comply with the provisions of section 181E, a prescribed penalty of 1,000,000 Pakistan Rupee (PKR 1m) (amounting to approximately €3,237 or US$3,560) may be imposed for each default.


The particulars of beneficial owners are required to be furnished electronically through Iris. However, as of yet, the related form has not been made available on Iris for furnishing the requisite information. Nonetheless, affected taxpayers should ensure that complete particulars in respect of beneficial ownership of their entity are identified and gathered as per Form BOF-01 so that the same may be furnished as soon as the FBR makes the form available.

Note that this Tax Alert is general in nature and is not a substitute for detailed research or the exercise of professional judgment. Accordingly, no decision on any issue should be taken without seeking specific professional advice and further consideration.

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Contact Information

For additional information concerning this Alert, please contact:

EY Ford Rhodes, Karachi

EY Ford Rhodes, Lahore & Islamabad

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor