Sunday, 14 April 2024
Trending
Anti-Money-Laundering
TAXATION

Cash paid for immovable property required to be reported under anti money laundering and counter terrorism financing : FBR

Every cash transaction for sale or purchase of housing units worth more than Rs. 2 million must be reported under Anti Money Laundering (AML) / Counter Terrorism Financing (CFT). To comply with the requirements of Financial Action Task Force (FATF). The Federal Board of Revenue (FBR) instructed on Monday. Real estate agents (REAs) have to comply with the requirements of the AML and Counter Financing of Terrorism (CFT) era.

ALSO READ: Anti money laundering Act: monitoring of Jewelers, real estate agents and accountants under strict regulations.

The FBR said that a Currency Transaction Report (CTR) needs to be submitted. When a developer receives cash or bearer instruments of Rs 2 million or more for the sale of real estate. The developer sells directly to the buyer and receives a direct cash payment. Similarly, a developer pays Rs 2 million in cash and more to buy real estate e.g. Property developers or builders pay for the purchase of development property.

Similarly, a broker receives or pays Rs 2 million or more to use later in the purchase of immovable property. A broker is a buyer’s agent who collects cash for later deposits and / or settlement payments (receipts or the resulting use may meet the threshold of CTR). However, if all financial transactions are by wire transfer, the real estate agent will not be required to file a CTR. If the REA pays the sales staff in cash, or to a supplier, or to purchase an asset such as a motor vehicle, it will not be subject to filing a CTR as no transaction of immovable property.

See also  Withdrawal of customs duty on import of cotton yarn S.R.O533(I)/2021

The FBR said the reason is that the REAs are subject to FATF standards and the AML / CFT measures are aimed at raising funds from criminal activities due to the large amount of involvement of the real estate sector. Real estate can also involve in financing terrorism because terrorist groups can buy or sell immovable property. There is a definition of REA under both AMLA and AML / CFT regulations, as follows:

Top-Tax-Consultants-Lahore-Pakistan-Global-Tax-Consultants
A d v e r t i s e m e n t

Anti money laundering Act, Section 2. Specifications (xii) (a)

(a) real estate agents, including builders and real estate developers, when performing the prescribed activities in the prescribed circumstances and manner;

-FBR AML/CFT Regulations for DNFBPs in Section 2.Definitions (n):

(n) “Real Estate Agent” includes builders, real estate developers and property brokers and dealers when execute a purchase and sale of a real property, participate in a real estate transaction capacity and are exercising professional transnational activity for undertaking real property transfer;

See also  Online NTN Verification by CNIC Number | NTN Inquiry | National Tax Number

Source

tax-accounting-services-top-tax-consultants-lahore-pakistan
Ads:

LATEST POSTS

PREVIOUS POSTS

See also  FBR Fixes Foreign Currency Limit for International Passengers

Tax-news-in-urdu
www.TaxUrdu.com
Tax.net.pk - Your Tax Experts and Consultants

Welcome to Tax.net.pk

Providing Expert Tax Services for Individuals and Businesses

About Us

At Tax.net.pk, we are dedicated to providing comprehensive tax solutions tailored to meet the needs of individuals and businesses. With years of experience in the industry, our team of tax experts is equipped to handle various tax matters, including tax planning, preparation of tax returns, and compliance.

We strive to stay up-to-date with the latest tax laws and regulations, ensuring that our clients receive accurate and reliable advice. Our commitment to client satisfaction and our in-depth knowledge of the tax landscape make us the trusted choice for all your tax-related needs.

Contact Us

For inquiries or to schedule a consultation, please reach out to us: