The Federal Board of Revenue (FBR) has issued directives to SWAPS Agents (withholding tax agents) to install and integrate fiscal electronic devices and software for conducting transactions subject to withholding tax.
The FBR introduced draft SWAPS rules through S.R.O. 1846(I)/2023 on Friday, outlining the obligations and requirements for the notified SWAPS agents.
According to the new rules, SWAPS refers to the FBR’s web-based portal or any computerized system of the notified SWAPS Agents integrated with the Board for processing payments related to goods and services.
From a specified date, SWAPS Agents are prohibited from conducting any specified transactions unless the CNIC, NTN, and IBAN of the withholdee bear the same title.
The SWAPS Payment Receipt (SPR) is designated as the sole proof of tax collection or deduction, including for claiming a refund or tax credit.
A SWAPS Agent, as notified, can request the Commissioner, Inland Revenue through IRS, for an extension in time for registration or integration as a SWAPS Agent, providing reasons for the delay.
The SWAPS Payment Receipt serves as proof of payment for transactions carried out by a SWAPS Agent. It includes specific details prescribed by the Board, such as SWAPS-ID, SPR number, name, address, NTN, and STRN of the SWAPS Agent and the supplier, quantity and description of goods, contract, or service, and for partial payments, the number, date, and amount of partial payments, among other particulars.
These directives aim to enhance transparency and efficiency in tax-related transactions, streamlining the process for both SWAPS Agents and stakeholders involved in withholding tax procedures.
