Steps By Step Process of Filing of Corporate Tax Return
For last several years last date for filing of tax returns for individuals had been extended many times , but as far as companies are concerned filing date for IT-I is hardly extended by Federal Board of Revenue. For tax year 2015 date was extended for one month.
Major pitfall of tax law is that it treats all companies in the same way , despite of considering their size and turnover. All companies are required to file tax return till 31 st December for each financial year, in Pakistan financial year ends on June 30 of every year. Hence companies (which follow normal tax / financial year) have six months for finalization of accounts , audit, Annual General meeting and filling of tax return.
As per Income Tax Ordinance 2001 companies are liable to get their accounts audited form auditor of the company. Under sub section 2-A of Section 114 and Income Tax Rules 2002 companies are liable to attach audited accounts with the tax return
“In case of companies, the return of income shall be accompanied by audited accounts and reconciliation of profits as per accounts and taxable income as declared in the return (Clause 3 of sub rule 4 of Rule 34)”
Step By Step Process:
Finalization of Accounts
In first step accounts of the company shall be finalized , companies are liable to make financial statements or annual accounts as per provisions of Income Tax Ordinance 2001 ,Income Tax Rules,2002, Companies Ordinance, 1984 and International Accounting Standards/ International Financial Reporting Standards.
Audit of Accounts
Tax laws require that audited accounts must be attached with the Income Tax Returns of Companies (IT-I). Moreover as per Companies Act, 2017 / Repealed Companies Ordinance, 1984 companies are liable to get audited their accounts from a Cost and Management Accountant or Chartered Accountant.
Hence second step is to get audited the annual accounts of the company.
Before submitting returns companies are required to make adjustments and / or reconciliation for other revenues , non deductible expenses, depreciation (if depreciation rates used by company are different from the rates mentioned in tax law) share from partnerships/ joint ventures, losses, provision, minimum tax etc.
Tax Return Filing
Final step is filing of company tax return , pick data from audited accounts and put it in relevant tabs of income tax return,. First complete data feeding in the tabs relating to income and expenses and then fill out data fields /tab relating to balance sheet items. Attach audited accounts in Attachment Tab, if tax is payable first deposit tax.
In the last phase verify the return and submit the same.
If you need any guidance for filing of company tax return then contact us
Corporate Tax Return Filing in Pakistan , Step by Step Process Courtesy by OLY Consultant.