Rate of tax on foreign payment through debt, credit cards

Rate of tax on foreign payment through debt, credit cards

ISLAMABAD: Federal Board of Revenue (FBR) has notified rate of advance tax on amount remitted abroad through credit or debit cards.

The FBR issued withholding tax card for tax year 2020-2021 (updated till June 30, 2020) after incorporating amendments made to Income Tax Ordinance, 2001 through Finance Act, 2020.

The FBR collects advance tax under Section 236Y from persons remit amounts abroad.

Every banking company shall collect advance tax at the rate of one percent from persons who has completed a transaction of credit card or debit card or pre-paid card, with a person outside Pakistan at the time of transfer of any sum remitted outside Pakistan through a transaction of a credit card of debit card or pre-paid card.

The tax rate shall be two percent for persons not appearing on the Active Taxpayers List (ATL).

The tax shall be adjustable against the total liability of a person.

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