Filing return as AOP in Pakistan

Day 19: Filing Return as an AOP (Association of Persons) in Pakistan

Filing Return as an AOP (Association of Persons) in Pakistan

An Association of Persons (AOP) in Pakistan is a legal formation that allows two or more individuals or entities to combine efforts for business, professional, or commercial purposes. This structure is commonly used for partnerships, agencies, and consortiums. Understanding how to file returns as an AOP is essential to avoid penalties and remain compliant.

Key Aspects of AOP Tax Filing

1. Registration of AOP
An AOP must register with the Federal Board of Revenue (FBR) by acquiring a National Tax Number (NTN). If involved in the supply of goods or services, it must also register for Sales Tax.

2. Allocation of Income
The net profit of the AOP is calculated after deducting business expenses, depreciation, and admissible deductions. The profit is then allocated among partners according to their profit-sharing ratio as agreed in the partnership deed.

3. Filing Income Tax Return

AOPs file income tax returns using Form-A on FBR’s IRIS portal.
The return must include financial statements, withholding tax statements, and wealth statements for each partner.
The deadline is usually September 30 for the preceding tax year.

4. Tax Rates for AOPs
The tax rates are progressive for AOPs, ranging from 0% to 35% based on taxable income brackets. If the total income exceeds Rs. 400,000, tax becomes applicable.

5. Benefits and Considerations

Tax credit eligibility under various sections (e.g., Section 62, 63, 64A)
AOPs can claim depreciation, business expenses, and investment tax credits
Audit risk is higher for AOPs, making compliance even more crucial

Common Filing Mistakes to Avoid

Not submitting partnership deed with the return
Mismatched profit-sharing ratios
Missing wealth reconciliations of partners
Late filing penalties

Need Expert Guidance for AOP Return Filing?
At MTF & Co. Tax and Corporate Advisory, we provide expert assistance in registering, filing, and managing tax affairs for AOPs across Pakistan. From income allocation to timely return submission, our team ensures your AOP remains tax-compliant and audit-ready.