Book-to-tax reconciliation
Accounting profit adjusted to taxable income, with each adjustment explained.
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FBR compares your return against withholding data, bank records, property and vehicle data and your wealth statement. We reconcile your accounting profit, tax credits and wealth before you file, so the numbers hold up when FBR checks them.
FBR's systems now hold a great deal of third-party data about taxpayers. When the income, credits or assets in your return differ from what FBR already knows, a notice usually follows. Reconciling first is far cheaper than explaining later.
Income tax reconciliation is the work of proving that the figures in your return agree with your books and with the information FBR holds. For businesses, that starts with reconciling accounting profit to taxable income: adding back inadmissible expenses, adjusting for tax depreciation and separating income taxed under the final or minimum tax regimes. For everyone, it means checking that the tax credits you claim agree with the withholding records in your IRIS profile, and that advance tax instalments match the CPRs you paid.
For individuals and members of AOPs, the wealth statement under section 116 of the Income Tax Ordinance, 2001 includes a reconciliation of wealth: opening net assets plus income, minus expenses, should equal closing net assets. Gaps are a common reason for notices under section 111 about unexplained income or assets. Where your business is registered for sales tax, the turnover in your income tax and sales tax returns should also agree.
Reconciliation is only as good as the records behind it. Where your books need tidying first, our accounts reconciliation service brings bank, ledger and party balances into line before we start on the tax figures.
Priced as a fixed fee alongside your return, or on its own for past years.
Accounting profit adjusted to taxable income, with each adjustment explained.
Withholding certificates matched to the data in your IRIS profile.
Opening and closing wealth reconciled under section 116.
Instalments and other payments matched to CPRs.
Income under normal, final and minimum tax regimes separated.
Turnover reconciled across your sales tax and income tax returns.
Property, vehicle, bank and foreign travel data checked against your return.
A working file kept ready in case FBR asks.
Each of these can be found and fixed before filing.
A gap in the wealth reconciliation can lead to a notice under section 111.
We reconcile wealth.Tax deducted but not reported by the withholding agent may not appear in your profile.
We match certificates.Different turnover in sales tax and income tax returns draws FBR's attention.
We reconcile both returns.Expenses that the law disallows, if claimed, can be added back in an amended assessment.
We review add-backs.Property or vehicles FBR knows about but your wealth statement omits.
We check third-party data.Instalments paid under the wrong tax year or section may not be credited.
We match CPRs.Done before filing, or for past years under review.
We look at your last return, wealth statement and profile.
Agreed based on the number of years and sources.
Books, certificates, bank statements and asset records.
Differences found, explained and corrected.
Return filed with a reconciliation file kept on record.
Credits, wealth and foreign income reconciled.
Business income and personal wealth reconciled together.
Firm income and partners' shares reconciled.
Accounting profit reconciled to taxable income.
Property data and rental income checked.
Past years reconciled to answer FBR's questions.
We prepare your books, returns and reconciliation together, so every figure has an explanation.
Accounts, returns and wealth statement prepared together.
ACCA and ICAP Chartered Accountant qualifications and an FBR-registered income tax practitioner.
Working papers kept to answer questions quickly.
Earlier years reconciled where FBR has raised issues.
LLB-qualified advocate if a reconciliation becomes a dispute.
Agreed before work starts.
Have a question that is not here? Send it to us on WhatsApp and we will reply the same day.
Send us your last return and wealth statement. We will tell you where the numbers do not agree and quote a fixed fee to fix them.
Book your free consultationThis page is general information about our services, not tax, legal or financial advice for your specific situation. Laws, rates and deadlines change with each Finance Act and official notification.