How to File a NIL Tax Return for a Company?

Filing a NIL tax return for a company in Pakistan is straightforward, especially if there has been no business activity or revenue during the financial year. Follow these detailed steps to ensure compliance with the Federal Board of Revenue (FBR):

Step 1: Login to IRIS System

1. Visit the FBR’s IRIS portal.
2. Login using your credentials:

Username: Your company’s NTN.

Password: Assigned to your FBR account.

1. Navigate to the dashboard after a successful login.

Step 2: Access the Income Tax Return Form

1. On the dashboard, click “Declaration” in the main menu.
2. Select Income Tax Return for the relevant tax year.

Step 3: Enter Key Entries for NIL Return

1. Open the form and proceed with the required entries. Since no business activity was performed:

Accounting Profit / Tax Chargeable under Section 113C at 17%: Code: 923173 EnterValue: Zero (0)

Turnover / Tax Chargeable under Section 113 at 1.25%: Code: 923161Value: Zero (0)

Step 4: Attribute Tab – Business Nature

Under the Attribute tab:

Select the Business Nature of the company.

Ensure it aligns with the company’s Memorandum of Association.

Step 5: Assets and Liabilities Declaration

1. Navigate to the Business tab.
2. Under the Assets and Liabilities section, enter the following:
   • Authorized Capital:
     • Code: 3351
     • Value: As per the Memorandum of Association.
   • Issued, Subscribed & Paid-up Capital:
     • Code: 3352
     • Value: As per the Memorandum of Association.
3. Match the Paid-up Capital with the corresponding cash or bank balance entries.

Step 6: Attach Required Documents

1. Go to the Attachment tab.
2. Attach the company’s financial statements in PDF format.
   • For companies with authorized capital below PKR 3 million:
     • Financials signed by a Cost and Management Accountant (CMA) are sufficient.
   • For companies with authorized capital above PKR 3 million:
     • Audited financial statements signed by a Chartered Accountant (CA) are mandatory.
3. Ensure the financial statements reflect the company’s Authorized and Paid-up Capital, even if there was no business activity.

Step 7: Review and Submit

1. Double-check all entries for accuracy.
2. Use the Preview option to review the return.
3. Click Submit to file the return.

Important Notes

• Financial Statements Requirement: Although not mandatory under the Companies Act 2017 for companies with authorized capital below PKR 3 million, the FBR requires these for return completion. Failure to attach them will result in a notice from the FBR, marking the return as incomplete.
• Annual Compliance: Filing a NIL tax return is essential even if no business transactions occurred. This maintains compliance with FBR regulations and avoids penalties.

Additional Tips

• Keep a copy of the submitted return and acknowledgment receipt for your records.
• Ensure that the company’s NTN and business profile are updated in the FBR database.
• For any queries, consult a tax advisor or contact the FBR helpline.

By following these steps, you can file your company’s NIL tax return accurately and efficiently, avoiding unnecessary notices or penalties.