Income tax testing
Income, deductions, credits and wealth statements.
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A tax compliance review tests what your business has actually filed and paid over recent years, for income tax, sales tax, withholding and FED, and tells you where the exposures are. It is the review to commission before an FBR audit, a sale or investment, a change of accountant, or simply when you are not sure everything was done right.
FBR can generally amend income tax assessments for up to five years and pursue sales tax short-levies for a similar period. A compliance review looks back over those years with an auditor's eye, so you learn about problems from your adviser rather than from a notice.
A tax compliance review is a structured, document-based examination of your past tax affairs. For income tax, we test income against the books, the admissibility of deductions under sections 20 and 21 of the Income Tax Ordinance, 2001, tax credits against your IRIS profile and wealth statement reconciliations. For sales tax, we test output against sales records, input tax against suppliers' declarations and section 8, annexures, and payments. For withholding, we test whether tax was deducted at the right rate, deposited on time and reported in section 165 statements. Where relevant, we review federal excise and provincial sales tax on services.
The result is a written report that ranks each finding by risk and value, explains the law behind it and recommends a fix: correcting records, revising a return where the law allows, paying tax voluntarily to limit surcharge and penalties, or documenting a position so it can be defended. Reviews are often commissioned before a sale, an investment or a due diligence exercise, or when an FBR audit is expected.
Testing is sample-based where volumes are high and complete where they are not. We agree materiality with you at the start, so the review concentrates on the transactions and years that carry real exposure. Each finding is supported by the document that shows it, so your team can verify it and act on it.
A compliance review is more detailed than a tax health check, which is a quick, fixed-scope diagnostic. Where the review finds weak records, our accounts reconciliation team can repair them before any correction is filed.
A fixed fee based on the taxes, years and transaction volume.
Income, deductions, credits and wealth statements.
Output, input, annexures and payments.
Deductions, deposits and statements.
Where your business is liable.
Which years remain open to FBR.
Findings ranked by value and likelihood.
Findings, law and recommended fixes.
Corrections and voluntary filings handled.
These are the findings we see most often.
Tax not deducted can be recovered from you under section 161.
We quantify and fix.Expenses barred by section 21 claimed in past returns.
We identify them.Claims on undeclared supplier invoices.
We test input.Quarterly section 165 statements not filed.
We file catch-ups.Unexplained growth in assets can lead to section 111 notices.
We reconcile wealth.Services taxable in a province without provincial registration.
We review registrations.Typically completed over a few weeks, depending on volume.
We agree the taxes, years and focus.
Agreed in an engagement letter.
Returns and records tested against the law.
Findings ranked with recommendations.
Corrections and filings handled with you.
Exposures found before buyers find them.
Clean tax position for investors.
Issues addressed before FBR arrives.
A baseline after a change of accountant.
Assurance over a Pakistani subsidiary.
Confirming compliance kept pace with growth.
We test like auditors and fix like advisers.
Income tax, sales tax, withholding and FED.
ACCA and ICAP Chartered Accountant qualifications and an FBR-registered income tax practitioner.
LLB-qualified advocate on interpretation and limitation.
We help correct what we find.
Findings reported to you, not to FBR.
Agreed before work starts.
Have a question that is not here? Send it to us on WhatsApp and we will reply the same day.
Tell us which taxes and years you want reviewed. We will agree the scope and quote a fixed fee.
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.