National Tax Number (NTN) Registration

 

In Pakistan, NTN stands for National Tax Number. It is a unique identification number issued by the Federal Board of Revenue (FBR), the government body responsible for tax collection and enforcement in Pakistan. The NTN is a unique identifier assigned to salaried individuals, business individuals, association of persons (AOP) and companies registered with the Federal Board of Revenue (FBR) for tax purposes.

Salaried Individuals include professionals such as:

  • Doctors
  • Engineers
  • Teachers
  • Architects
  • Bankers
  • Government Officers
  • Freelancers
  • Other Individuals whose income is taxable under section 149 of the Income Tax Ordinance,

Business Individuals in Pakistan refer to those who earn income from business activities, such as entrepreneurs, sole proprietors, and self-employed individuals, that include following types of businesses:

  • Sole Proprietors: Individuals who own and operate a business alone.
  • Self-Employed Individuals: Freelancers, consultants, and other individuals who earn income from their skills and services.
  • Entrepreneurs: Individuals who start and run their own businesses, often taking on financial risks in the hopes of earning profits.
  • Small Business Owners: Individuals who own and operate small businesses, such as shops (retailers, wholesalers or distributors), super markets, restaurants, real estate, importer and exporter, software houses, online businesses or service providers.

 Association of Persons (AOP)

  • An AOP is a tax entity that consists of a group of individuals who share income or expenses, but are not necessarily partners in a partnership firm.
  • An AOP can be formed for various purposes, such as co-ownership of property, joint business ventures, or investment activities.
  • An AOP is required to obtain a National Tax Number (NTN).

Partnership Firm

  • A Partnership Firm is a business entity formed by two or more individuals who agree to share profits and losses.
  • A Partnership Firm is governed by the Partnership Act, 1932, and is required to register with the Registrar of Firms.
  • A Partnership Firm is also required to obtain an NTN.

Key differences between AOP and Partnership firm:

  • Purpose: An AOP can be formed for various purposes, while a Partnership Firm is primarily formed for business purposes.
  • Registration: A Partnership Firm must register with the Registrar of Firms, while an AOP does not require registration.
  • Taxation: Both AOPs and Partnership Firms are required to obtain an NTN and file tax returns with the FBR. However, the taxation of Partnership Firms is governed by specific provisions of the Income Tax Ordinance, 2001.

Company

In Pakistan, the term “Company” includes:

  • Public Limited Company: A company that offers its shares to the public and is listed on a stock exchange.
  • Private Limited Company: A company that is privately owned and has a limited number of shareholders.
  • Single Member Company: A company that has only one shareholder.
  • Non-Profit Organization: A company established for charitable, educational, or social welfare purposes.
  • Foreign Company: A company incorporated outside Pakistan, but operating in Pakistan.
  • Association: A group of individuals or companies formed for a specific purpose, such as a trade association.
  • Body of Individuals: A group of individuals who are not a partnership firm, but are taxed as a separate entity.
  • Trust: A trust established for the benefit of individuals or organizations.
  • Society: A registered society under the Societies Registration Act, 1860.
  • Any Other Body Corporate: Any other entity that is considered a company under the Companies Act, 2017.

Benefits of NTN registration:

In Pakistan, registering for a National Tax Number (NTN) provides numerous benefits. Here are some of the advantages of NTN registration:

  • Tax Compliance: NTN registration ensures compliance with tax laws and regulations.
  • Tax Filing: NTN holders can file their tax returns online or through a tax consultant.
  • Tax Refund: NTN holders can claim a tax refund if they have paid excess taxes.
  • Bank Account Opening: NTN is required to open a bank account in Pakistan.
  • Loan Facility: NTN holders can avail loan facilities from banks and financial institutions.
  • Sales Tax Registration: NTN is required for sales tax registration.
  • Withholding Tax: NTN holders can claim withholding tax credits.
  • Export and Import: NTN is required for export and import license.
  • Government Contracts: NTN is required to participate in government contracts and tenders.
  • Visa Applications: Some countries require NTN or tax identification numbers for visa applications.

Frequently Asked Questions (FAQs)

Q.  What is NTN?

A.   NTN stands for National Tax Number, a unique identifier assigned to individuals and businesses registered with the Federal Board of Revenue (FBR) for tax purposes.

Q.   Who is required to obtain NTN?

A.   NTN is mandatory for businesses, companies, and individuals with a taxable income.

Q.   How to apply for NTN?

A.   You can apply for an NTN through our professionals.

Q.  How long does it take to obtain an NTN?

A.   The processing time for an NTN registration is typically 15 minutes.

Q.  Is NTN registration mandatory for foreign companies?

A.   Yes, foreign companies operating in Pakistan are required to obtain NTN.

Q.  Can I file my tax return without NTN?

A.  No, NTN is mandatory for filing tax returns in Pakistan.

Q.   What are the requirements for NTN registration?

A.

Registration of Individuals:

  • Copy of CNIC
  • Cell No
  • Email Address

Registration of Business Individuals:

  • Copy of CNIC
  • Cell No
  • Email Address
  • Copy of Rent Agreement / ownership paper
  • Copy of Utility Bill
  • Letterhead
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