What is a Tax Year in Pakistan?

How to Change Tax Year

When Should a Business Consider Changing Its Tax Year?

1. Reverting from Special Tax Year to Normal Tax Year:
   Businesses using a special tax year may wish to revert to the normal tax year for uniformity with industry practices or regulatory requirements.
2. Switching from Normal to Special Tax Year:
   A business may opt for a special tax year to align its financial year with its parent company or other international subsidiaries.

Filing an Application to Change Tax Year

To apply for a change in the tax year, businesses need to submit an application online through the IRIS portal provided by the Federal Board of Revenue (FBR). Below are the steps:

1. Log into Your IRIS Account:
   • Use your credentials to access your IRIS portal.
2. Navigate to the Registration Tab:
   • Click on the Registration tab and select Applications.
3. Select the Relevant Application:
   • Choose 74(3) / (4) (Application for permission to adopt special/normal tax year).
4. Provide Justification for Change:
   • Clearly state the reasons for changing the tax year.
   • Examples include alignment with financial statements, operational ease, or synchronization with international partners.
5. Select the Desired Tax Year:
   • Specify the tax year you want to adopt in the application.
6. Attach Supporting Documents:
   • Attach documents that validate your request, such as:
     • Financial statements.
     • Business plans or agreements demonstrating the need for the change.
7. Submit the Application:
   • Once all details are filled in, submit the application for processing.

Important Considerations

• Approval Required:
  Approval from the Commissioner is mandatory to finalize the change.
• Business Benefits:
  Ensure the change is in the best interest of your business and aligns with operational or financial goals.
• Documentation:
  Supporting documents strengthen your case and demonstrate genuine business needs.