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Introduction & Procedure of Advance Ruling

Introduction & Procedure of Advance Ruling

With a view to remove any confusion and to avoid disputes in respect of determination of the income tax liability of a non-resident person, a procedure of Advance Rulings has been brought on statute by way of incorporating Section 206A into the Income Tax Ordinance, 2001, w.e.f. 1.7.2003. Through this facility non-residents can obtain, in advance, a binding ruling on the issues that could arise in determining their tax liabilities at a later stage. Therefore, time consuming and expensive legal disputes can be avoided. The Centre Board of Revenue is empowered to determine any question of law or of fact as specified in the application made before it in respect of a transaction which has been undertaken or is proposed to be undertaken by a non-resident in Pakistan on its own or in combine with a resident concern.
The detailed procedures for obtaining an advance ruling are contained in Rule 231A and 231B of the Income Tax Rules, 2002. An application form for the purpose has also been prescribed in Rule 231B, stipulating the information required to be divulged and the documents to be attached.

Composition of the Advance Ruling Committee

 The application for advance ruling is considered and decided upon by a committee headed by the Chairman, Central Board of Revenue, after giving due opportunity to the applicant of explaining his case. Other members of the committee are Member (Direct Taxes), Central Board of Revenue, and Additional Secretary, Law, Justice, and Human Rights Division, Government of Pakistan.


The applicant may seek advance ruling by making an application to the Central Board of Revenue in the prescribed form and manner.

  • The application for advance ruling should be presented in the form prescribed for the purpose by the applicant in person or by an authorized representative to the Secretary, International Taxes Operations, Room No. 424, 4th Floor, FBR House, Constitution Avenue, Islamabad.

  • The application and the accompanying annexures may be neatly typed on one side of plain paper of A-4 size leaving a minimum margin of 30mm on all the four sides and may be duly indexed. Legible photocopies of the relevant documents may be attached.

  •  No information as required in the prescribed application form may be withheld. Provision of complete and correct information would help the applicant in getting an early decision.

  • The question(s) of law or fact on which advance ruling is sought may be stated clearly in the application using a text box.

Signing of Application

The application, its verification and the annexures, statements and documents accompanying it, are required to be signed by a person competent to do so. Where a person signing the application and other documents claims to have been duly authorized to do so, the application must be accompanied by a power of attorney authorizing him to sign.


Authorized Representative

The applicant is entitled to present his case before the Advance Ruling Committee either personally or through an authorized representative. If the applicant desires to be represented by an authorized representative, a duly authenticated document authorizing him to appear for the applicant should be enclosed.

Payment of Fee

There is no fee for seeking an advance ruling from the Central Board of Revenue.


Withdrawal of application

The applicant may withdraw his application at any time before the ruling is issued.


Advantages of Advance Ruling

  •  Helps non-residents in planning their income tax affairs well in advance.

  •  Gives clarity to the local partners of non-residents vis-à-vis their liabilities under the tax laws.

  •  Brings certainty in determination of the tax liability.

  •  Helps in avoiding long drawn and expensive litigation.

  •  It is inexpensive, expeditious and binding.

Who can seek advance ruling?

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