Banks require to collect 5pc withholding tax on off-shore digital services

KARACHI: Banks have been required to deduct 5 percent withholding tax at 5 percent on payments for off-shore digital services.
According to Withholding Tax Card for Tax Year 2019, the Federal Board of Revenue (FBR) said that every banking company or financial institutions remitting outside Pakistan an amount of fee for offshore digital services to a non-resident person on behalf of any resident or a permanent establishment of a non-resident in Pakistan shall deduct tax from the gross amount paid at the rate of 5 percent.
The tax shall be collected at the time the amount is actually paid.
The provision has been introduced through Finance Act, 2018 through induction of Section 152(1C) to Income Tax Ordinance, 2001 and it is final tax liability.
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