Karachi, August 7, 2024 – The Federal Board of Revenue (FBR) has announced a reduction in the Federal Excise Duty (FED) on air tickets for passengers holding labour visas. Effective immediately, the FED on such tickets will be reduced to a fixed rate of Rs 5,000 per ticket, a substantial relief for those embarking on international journeys from Pakistan to Gulf Cooperation Council (GCC) countries.
(more…)Tag: air ticket
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Updated Rules for Air Ticket Tax Collection Unveiled by FBR
Karachi, December 13, 2023 – The Federal Board of Revenue (FBR) has issued updated rules for the collection of advance tax on the sale of air tickets during the tax year 2024.
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FBR issues withholding tax rate on purchase of air tickets for tax year 2019/2020
KARACHI: Federal Board of Revenue (FBR) has issued adjustable withholding tax rate on purchase of international air ticket effective for Tax Year 2019/2020.
The FBR said that airlines issuing the air tickets shall collect withholding tax under Section 236L of Income Tax Ordinance, 2001 from the purchasers of international air travel ticket at the time of realization of sale proceeds.
The rate of advance tax on purchase of international air ticket:
(i) First/ Executive class: Rs16,000 per person
(ii) Others excluding Economy: Rs12,000 per person
(iii) Economy: no tax.
The FBR said that as per Finance Act, 2019, the provisions of newly inserted 10th schedule of the Income Tax Ordinance, 2001 shall not apply on tax collected under section 236L.
As per the Tenth Schedule of the Ordinance, the person not appearing on the ATL shall pay 100 percent enhanced withholding tax on making transactions.
The FBR said that on purchase of domestic air ticket under Section 236B the advance tax shall be 5 percent of gross amount of ticket.
The adjustable advance tax shall be collected by person preparing air ticket from purchaser of domestic air travel ticket at the time of realization of sale proceeds.
The FBR said that as per Finance Act, 2019, the provisions of newly inserted 10th schedule of the Income Tax Ordinance, 2001 shall not apply on tax collected under section 236B.
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Income Tax Ordinance 2001: advance tax on domestic, international air tickets
KARACHI: Passengers traveling through domestic or international airlines are required to pay certain amount of advance tax on purchase of air tickets.
According to Income Tax Ordinance, 2001 issued by Federal Board of Revenue (FBR) passengers of domestic and international destinations are required to pay advance tax under Section 236B and Section 236L.
Section 236B: Advance tax on purchase of air ticket.Sub-Section (1): There shall be collected advance tax at the rate specified in Division IX of Part IV of the First Schedule, on the purchase of gross amount of domestic air ticket:
(The rate of tax to be deducted under section 236B shall be 5 percent of the gross amount of air ticket.)
“Provided that this section shall not apply to routes of Baluchistan coastal belt, Azad Jammu and Kashmir, Federally Administered Tribal Areas, Gilgit-Baltistan and Chitral.”
Sub-Section (2): The airline issuing air ticket shall charge advance tax under sub-section (1) in the manner air ticket charges are charged.
Sub-Section (2A): The mode, manner and time of collection shall be as may be prescribed.
Sub-Section (3): The advance tax collected under sub-section (1) shall be adjustable.
Section 236L: Advance tax on purchase of international air ticket
Sub-Section (1): Every airline, issuing ticket for journey originating from Pakistan, shall collect advance tax at the rates specified in Division XX of Part IV of the First Schedule, on the gross amount of international air tickets issued to passengers booking one-way or return, from Pakistan.
01 First/Executive Class Rs16,000 per person 02 Other excluding Economy Rs12,000 per person 03 Economy 0
Sub-Section (2): The airline issuing air ticket shall collect or charge advance tax under sub-section (1) in the manner air ticket charges are collected or charged, either manually or electronically.Sub-Section (3): The mode, manner and time of collection under sub-section (1) and time of collection shall be as may be prescribed.
Sub-Section (4): The advance tax collected under sub-section (1) shall be adjustable.
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Advance tax on domestic, international air tickets adjustable
The Federal Board of Revenue (FBR) has recently introduced revised advance tax rates on both domestic and international air tickets to be collected from purchasers.
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