Written by Faisal Shahnawaz in Taxation FBR explains the residency rules for individuals, companies and associations of persons under Sections 81 to 84 of the Income Tax Ordinance, 2001. ISLAMABAD: The Federal Board of Revenue (FBR) has clarified the criteria for determining whether an individual, company or association of persons (AOP) is treated as a resident for tax purposes during Tax Year 2027. The FBR has issued the Income Tax Ordinance, 2001, updated up to June 30, 2026, setting out the provisions governing resident and non-resident persons under Sections 81 to 84. For individuals, the 183-day presence test is a key factor in determining tax residency, although the law also provides additional conditions under which a person may qualify as a resident. Resident and Non-Resident Persons Under Section 81, a person is treated as a resident person for a tax year if they qualify as a resident individual, resident company or resident association of persons for that year. The Federal Government is also treated as a resident person under the provision. A person is considered a non-resident for a tax year if they do not qualify as a resident for that year. 183-Day Rule for Resident Individuals Section 82 sets out the conditions under which an individual is regarded as a resident individual for a tax year. An individual is treated as a resident if they are present in Pakistan for 183 days or more during the tax year. The 183 days do not necessarily have to be consecutive, as periods of presence can collectively reach the required threshold. The law also provides additional circumstances in which an individual may qualify as a resident. An individual is treated as a resident if they are an employee or official of the Federal Government or a Provincial Government posted abroad during the tax year. Pakistani Citizens and Tax Residency The Income Tax Ordinance also contains specific provisions concerning Pakistani citizens. A Pakistani citizen is treated as a resident individual if they are not present in any other country for more than 182 days during the tax year. A Pakistani citizen may also qualify as a resident if they are not a resident…