Karachi, September 5, 2024 – The Federal Board of Revenue (FBR) has officially notified a significant tax increase for individuals earning profit from bank deposits but who are not listed on the Active Taxpayers List (ATL). The tax rate for these non-ATL individuals has been set at 35%, a substantial hike from the rate applied to ATL members.
(more…)Tag: withholding tax card
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FBR Slaps Non-ATL with Steep Dividend Tax Rates Up to 70%
Karachi, September 4, 2024 – The Federal Board of Revenue (FBR) has imposed staggering tax rates of up to 70% on dividend income for individuals and entities not listed on the Active Taxpayers List (ATL) for the tax year 2024-25.
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Complete list of withholding tax rates for tax year 2020
ISLAMABAD: Following is the complete list of withholding tax rates applicable for tax year 2020. The rates have been updated by the Federal board of Revenue (FBR) till June 30, 2019.
The withholding tax card also included the 100 percent higher tax rates for persons not on the Active Taxpayers List (ATL).
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Withholding Tax Card 2019/2020: non-ATL to pay 40pc on foreign produced commercials
ISLAMABAD: Federal Board of Revenue (FBR) has said that up to 40 percent income tax shall be collected from a person not on the Active Taxpayers List (ATL) in case of receiving payment as non-resident person against foreign produced commercials.
According to Withholding Tax Card for tax year 2019/2020 issued by the FBR, the tax shall be deducted on payment for foreign produced commercials under Section 152A of the Income Tax Ordinance, 2001.
Every person responsible for making payment to a non-resident person shall collect withholding tax at the time of payment from non-resident person.
The FBR said that tax to be deducted from non-resident while making payments for foreign produced commercial for advertisement on any television channel or any other media at the rate of 20 percent of the gross amount.
For person not appearing in the ATL, the applicable tax rate is to be increased by 100 percent i.e. 40 percent of the gross amount. The deducted amount shall be final tax liability.
The FBR also issued withholding tax rates on payments to non-residents under Section 152 of Income Tax Ordinance, 2001.
The FBR said that every person shall deduct tax while making payments for royalties and fee for technical payments to resident under Section 152(1) of the Ordinance at the rate of 15 percent of the gross amount.
Every person shall deduct withholding tax rate under Section 152(1A) from:
a) Contract or sub-contract under a construction, assembly or installation project in Pakistan including a contract for the supply of supervisory activities relating to such project.
b) Any other contract for construction or services rendered relating there to.
c) Contract for advertisement services rendered by TV Satellite Channels.
The tax rate shall be 7 percent of the gross amount.
In case person is not appearing on the ATL, the applicable tax rate is to be increased by 100 percent i.e. 14 percent of the gross amount.
Under Section 152(1AA) the tax will be deducted from non-resident on any payment of insurance premium or re-insurance to non-resident person the tax shall be deducted at 5 percent of the gross amount.
Under Section 152(1AAA), the tax will be deducted at 10 percent of the gross amount on payments for advertisement services from non-resident person relaying from outside Pakistan.
In case persons not appearing on ATL, the applicable tax rate is to be increased by 100 percent i.e. 20 percent of the gross amount.
The FBR said that tax shall be deducted on remittance outside Pakistan, of fee for off-shore digital services, chargeable to tax u/s 6, to a non-resident person on behalf of any resident or a permanent establishment of a non-resident in Pakistan.
The FBR said that banking company or financial institution shall collect five percent of the gross amount from non-resident at the time the amount is actually paid.
In case persons not appearing in the ATL, the applicable tax rate is to be increased by 100 percent i.e. 10 percent of the gross amount.
Under Section 152(2), the tax deduction on payment to non-resident, no otherwise specified the tax rate shall be 20 percent of the gross amount. The tax shall be adjustable.
Under Section 152(2A), every prescribed person making payment to a prescribed person making payment to a permanent establishment of non-resident for
(a) sale of goods
(i) in case of a company the tax rate shall be four percent of the gross amount.
(ii) Other than company cases the tax rate shall be 4.5 percent of the gross amount.
Persons not appearing on ATL the applicable tax rate is to be increased by 100 percent i.e.
(i) in case of a company the tax rate shall be 8 percent.
(ii) other than company cases the tax rate shall be 9 percent.
(b) Rendering /providing of services the tax rate shall be two percent.
In the case of Transport service:
(i) in case of a company : 8 percent
(ii) Other than company cases: 10 percent
(c) Execution of a contract other than a contract for sale of goods or providing/ rendering of services.
(i) In case of sports persons: 10 percent
(ii) Other than sports persons: 7 percent
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Non-ATL commission agents to pay up to 24 percent withholding tax
ISLAMABAD: Federal Board of Revenue (FBR) has said that commission agents not appearing on Active Taxpayers List (ATL) shall pay 24 percent withholding tax during tax year 2019/2020 effective from July 01, 2019.
The FBR issued Withholding Tax Card for tax year 2019/2020 saying that the collection of withholding tax is payable under Section 233 of Income Tax Ordinance, 2001.
The revenue body said that Federal Government, Provincial Government, Local authority, Company AOP constituted by or under any law or principal shall collect withholding tax from recipient of brokerage or commission or agent at the time the brokerage or commission is actually paid.
The following rates shall be applicable:
(i) Advertising Agents, the tax rate shall be 10 percent for compliant taxpayers and 20 percent for persons not appearing on ATL.
(ii) Life insurance agents where commission received is less than 0.5 million per annum, the tax rate shall be 8 percent for compliant taxpayers and 16 percent for persons not appearing on ATL.
(iii) Persons not covered in (i) & (ii), the tax rate shall be 12 percent for compliant taxpayers and 24 percent for persons not appearing on ATL.
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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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Withholding tax rates for foreign fund transfers through debt, credit cards
ISLAMABAD: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2020, effective from July 1, 2019 and notified 2 percent advance tax to be collected on gross amount of foreign transfers from persons not appeared on Active Taxpayers List (ATL).
The FBR said that every banking company is required to collect advance under section 236Y of Income Tax Ordinance, 2001, from person remitting amounts abroad.
The FBR further explained that the banking companies shall collect the advance tax from a person 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 or debit card or pre-paid card.
The advance tax shall be one percent on a person who filed income tax return within due date.
In case persons not appearing in the ATL, the applicable tax rate is to be increased by 100 percent i.e. two percent.
The advance tax on persons remitting amounts abroad through credit or debit or prepaid cards under Section 236Y was introduced through Finance Act, 2018.
The tax rate under this section during tax year 2019 was one percent of the gross amount remitted abroad for filers and three percent for non-filers.
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Withholding tax card 2019/2020: minimum Rs20,000 payable on wedding event in major cities
ISLAMABAD: Federal Board of Revenue (FBR) to collect minimum Rs20,000 as adjustable advance tax from a person, who makes payment for wedding event at a commercial hall or lawn in major cities of the country.
According to updated withholding tax card for tax year 2019/2020 effective from July 01, 2019, the FBR said that under Section 236D of Income Tax Ordinance, 2001, prescribed persons / withholding agents shall collected the adjustable advance tax from person holding or arranging a function.
Every prescribed person shall collect tax under Section 236D(1) on the total amount of bill paid by a person holding or arranging functions in a marriage hall, Marquee, Hotel, Restaurant, Commercial Lawn, Clubs, Community Place or any other place used for such purpose:
tax rate for the function of marriage shall be:
5 percent of the bill ad valorem or Rs. 20,000, whichever is higher for the following cities:
Islamabad, Lahore, Multan, Faisalabad, Rawalpindi, Gujranwala, Bahawalpur, Sargodha, Sahiwal, Shekhupura, Dera Ghazi Khan, Karachi, Hyderabad, Sukkur, Thatta, Larkana, Mirpur Khas, Nawabshah, Peshawar, Mardan, Abbottabad, Kohat, Dera Ismail Khan,
Quetta, Sibi, Loralai, Khuzdar, Dera Murad Jamali
(ii) 5 percent of the bill ad valorem or Rs. 10,000/- whichever is higher for other cities.
[New proviso]
The rate for the function of marriage will be 5 percent of the bill ad valorem or Rs. 5,000/- whichever is higher :
(a) In the case of a marriage hall, marquee or a community place, with total function area less 500 sq. yards; or
(b) In case of a multi storied premises, with the largest total function area on one floor less than 500 sq. yards.
The FBR said that under Section 236D(2) the tax rate for other functions shall be five percent on payment of food, service, or any other facility related to function and gathering.
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2019/2020: Withholding tax rates on insurance premium
ISLAMABAD: The insurance companies are required to deduct/collect withholding tax only from persons not appearing on the Active Taxpayers List (ATL) at the time of collection of insurance premium.
Federal Board of Revenue (FBR) issued withholding tax card for tax year 2019/2020 and updated tax on insurance premium under Section 236U of Income Tax Ordinance, 2001.
The FBR said that advance tax to be collected at the time of collection of insurance premium from a person whose name is not appearing in the active taxpayers’ list, by every insurance company in respect of General Insurance Premium and Life Insurance Premium.
The withholding tax rates shall be:
General Insurance Premium at four percent
Life Insurance Premium if exceeding Rs0.3 million in aggregate per annum at one percent
In other cases there will be not tax collection.
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2019/2020: Withholding tax rates issued on payment for goods and services
KARACHI: Federal Board of Revenue (FBR) has issued withholding tax rates on payment for goods and services during tax year 2019/2020 under Section 153 of Income Tax Ordinance, 2001.
The FBR said that every prescribed person shall collect withholding tax under Section 153 of Income Tax Ordinance, 2001 from resident persons and permanent establishment in Pakistan of non-resident at the time the amount is actually paid.
Under Section 153(1)(a) for sale of rice, cotton seed oil and edible oil, the tax rate shall be 1.5 percent of the gross amount.
Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e. 3 percent of the gross amount
Tax should be collected on supply made by distributors of fast moving consumer goods: two percent of gross amount in case of company; 2.5 percent of gross amount in case of other than company.
Persons not appearing in the Active Taxpayers’ List The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e.: 4 percent of the gross amount in case of company; 5 percent of the gross amount in case of other than company.
For sale of any other goods: 4 percent of the gross amount in case of company; 4.5 percent of the gross amount in case of other than company.
Persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e.: 8 percent of the gross amount in case of a company; 9 percent of the gross amount in case of other than a company.
Goods: No deduction of tax where payment is less than Rs. 75,000/- in aggregate during a financial year [S.153(1)(a)].
The FBR said that it shall be minimum tax for all except in the following cases where it shall not be minimum tax on sale or supply of goods, by:
(i) a company being manufacturers of such goods or
(ii) Public company listed on registered Stock Exchange in Pakistan.
The FBR said that under Section 153(1)(b) the tax rate should be collected at 3 percent in case:
(i) i. Transport services, freight forwarding services, air cargo services, courier services, man power outsourcing services, hotel services, security guard services, software development services, IT Services and IT enabled services as defined in clause (133) of Part I of the Second Schedule, tracking services, advertising services (other than by print or electronic media), share registrar services, engineering services, car rental services, building maintenance services, services rendered by Pakistan Stock Exchange Ltd. & Pakistan Mercantile Exchange Ltd. , inspection, certification, testing & training services.;
Persons not appearing in the Active Taxpayers’ List :The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e. 6 percent of the gross amount.
ii. In case of rendering or providing of services other than as mentioned at (i) above;
a) In case of company: 8 percent of the gross amount
b) In any other case: 10 percent of the gross amount
c) In respect of persons making payment to electronic & print media for advertising services: 1.5 percent of the gross amount.
Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e.:
a) In case of company: 16 percent of the gross amount.
b) In any other case: 20 percent of the gross amount.
c) In respect of persons making payment to electronic & print media for advertising services: 3 percent of the gross amount.
Services : No deduction of tax where payment is less than Rs. 30,000/- in aggregate during a financial year [S.153(1)(b)].
It shall be minimum cases in mentioned above cases.
Under Section 153(1)(c), the tax rates shall be:
Execution of Contracts
i) In case of sportsperson: 10 percent
ii) In the case of Companies: 7 percent
iii) In the case of persons other than companies: 7.5 percent
Persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e.:
i) In case of sportsperson: 20 percent
ii) In the case of Companies: 14 percent
iii) In the case of persons other than companies: 15 percent
Minimum Tax for all whereas it will remain adjustable where payments are received on account of execution of contracts by Public Company listed on registered Stock Exchange in Pakistan.