The National Tax Number is the identifier under which FBR knows a taxpayer. For an individual it is now simply the CNIC number; a separate NTN certificate is issued for businesses and entities. Registration is done through FBR's IRIS portal and costs nothing, which makes the agent fees charged for it hard to justify.
Individual vs business registration
An individual is registered by enrolling on IRIS with their CNIC. Once enrolled, the individual can file returns. The CNIC serves as the NTN.
A business operated by that individual - a sole proprietorship - is added to the individual's profile as a business, with its name, address, and principal activity. There is no separate legal entity, so there is no separate taxpayer: the proprietor is the taxpayer and the business is a branch on their profile.
An AOP or company is a separate taxpayer and is registered in its own right, with its own NTN.
Registering as an individual or proprietor
Documents ordinarily required:
- CNIC
- A working mobile number registered against that CNIC, and an email address. The verification codes go to both, and a number registered in someone else's name will fail here.
- Proof of business premises - the ownership document, or the rent agreement together with a recent utility bill for the premises
- A recent utility bill for the address, generally not older than three months
- Bank account maintenance certificate in the business name, where a business account is held
- The letterhead of the business
The premises documentation is where most applications stall. The utility bill will usually be in a landlord's or a previous occupier's name; FBR wants the rent agreement to bridge that gap, and the rent agreement should be properly stamped.
Registering an AOP
In addition to the above for each member:
- The partnership deed, stamped
- The registration certificate from the Registrar of Firms
- CNICs of all partners
- Authorisation in favour of the principal officer
Registering a company
A company registered with SECP is, in practice, largely pre-populated: SECP and FBR share incorporation data, and the company's NTN follows on from incorporation. What is still needed is enrolment on IRIS by the principal officer, together with:
- Incorporation certificate and the memorandum and articles
- Form A / Form II and the list of directors
- CNICs of directors, and the authorisation of the principal officer
- Proof of registered office and a utility bill
The process on IRIS
- Go to the FBR IRIS portal and select registration for an unregistered person.
- Enter CNIC, name, mobile and email; codes are sent to both and must be entered.
- Complete the Registration Form 181: personal tab, business tab, property tab, bank account tab, link tab.
- Upload the supporting documents against the correct tabs.
- Submit. The NTN is ordinarily issued promptly for straightforward cases; where documents are queried, a notice appears in the IRIS inbox and must be answered there.
Everything after registration also happens in IRIS, including notices. Check the IRIS inbox; FBR treats service in IRIS as service on the taxpayer, and "I never received a letter" is not an answer.
What follows registration
Having an NTN creates obligations, and this is the part people do not anticipate:
- An annual income tax return is due whether or not the business made a profit. A registered person who does not file is a non-filer with all the consequences that carries.
- Withholding obligations arise on certain payments - salaries, rent, services, supplies - with monthly statements.
- Where turnover crosses the threshold, or the activity is listed, sales tax registration becomes compulsory, with monthly returns.
Getting onto the Active Taxpayer List
The NTN alone does not make you a filer. The Active Taxpayer List is derived from having filed the return for the relevant tax year by the due date. The ATL is updated periodically and is what banks, registration authorities and withholding agents check. The practical difference is the rate of withholding tax you suffer on banking transactions, vehicle registration, property transfers and utility connections - non-filers pay substantially more.
Common mistakes
- Registering with a mobile number not in your own name - verification will fail
- Giving a residential address as business premises without any supporting document
- Selecting the wrong principal activity code, which affects which regime and which withholding rates apply
- Registering and then not filing, which is worse than not registering
- Paying an agent for something that is free and takes an hour
This article describes the general FBR registration process in Pakistan. Requirements and thresholds change with each Finance Act. It is not tax advice; consult a tax practitioner for your situation.