IT exports, services granted 100% income tax credit

IT exports, services granted 100% income tax credit

ISLAMABAD: The government has granted 100 percent tax credit to persons engaged in exports and services of Information Technology (IT), sources in Federal Board of Revenue (FBR) said on Monday.

Through Finance Act, 2021 incomes of persons engaged in IT exports and services have be allowed a tax credit equal to one hundred per cent of the tax payable under any provisions of Income Tax Ordinance 2001, including minimum, alternate corporate tax and final taxes for the period, to the extent, upon fulfillment of conditions and subject to limitations detailed as under:—

— a startup as defined in clause (62A) of section 2 for the tax year in which the startup is certified by the Pakistan Software Export Board and the next following two tax years; and

— Income from exports of computer software or IT services or IT enabled services as defined in clause (30AD) and (30AE) of section 2 upto the period ending on the 30th day of June, 2025:

Provided that eighty percent of the export proceeds is brought into Pakistan in foreign exchange remitted from outside Pakistan through normal banking channels.

The tax credit under shall be available subject to fulfillment of the following conditions, where applicable, namely:—

(a) return has been filed ;

(b) withholding tax statements for the relevant tax year have been filed in respect of those provisions of the Ordinance, where the person is a withholding agent; and

(c) sales tax returns for the tax periods corresponding to relevant tax year have been filed if the person is required to file Sales Tax Return under any of the Federal or Provincial sales tax laws.