Tax rates on payments for goods or services during TY22

Tax rates on payments for goods or services during TY22

The advance tax rates on payments to non-residents for the tax year 2022 are under the First Schedule of the Income Tax Ordinance, 2001.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

(1) The rate of tax to be deducted from a payment referred to in clause (a) of sub-section (1) of section 153 shall be –

(a) in the case of the sale of rice, cotton seed or edible oils, 1.5 per cent of the gross amount payable; or:

Explanation.— For removal of doubt, it is clarified that “cotton seed and edible oils” means cotton seed oil and edible oils;

(b) in the case of sale of goods including toll manufacturing,—

9[(i) in case of a company, 4 per cent of the gross amount payable; and

(ii) in any other case, 4.5 per cent of the gross amount payable,  

(2) The rate of tax to be deducted from a payment referred to in clause (b) of sub-section (1) of section 153 shall be —

(i) 3 per cent of the gross amount payable, in the cases of transport services, freight forwarding services, air cargo services, courier services, manpower outsourcing services, hotel services, security guard services, software development services, IT services and IT enabled services as defined in section 2, tracking services, advertising services (other than by print or electronic media), share registrar services, engineering services including architectural services, warehousing services, services rendered by asset management companies, data services provided under license issued by the Pakistan Telecommunication Authority, telecommunication infrastructure (tower) services, car rental services, building maintenance services, services rendered by Pakistan Stock Exchange Limited and Pakistan Mercantile Exchange Limited, inspection, certification, testing and training services, oilfield services, telecommunication services, collateral management services, travel and tour services.

Explanation:—The tax rate under this subparagraph shall be applicable only to a service provider whose services are subjected to withholding tax on gross receipts and the service provider has not agitated taxation of gross receipts before any court of law;

(ii) in case of rendering of or providing of services other than sub-clause (i),-

(a) in case of a company, 8 per cent of the gross amount payable;

(b) in any other case, 10 per cent of the gross amount payable; and

(c) in respect of persons making payments to electronic and print media for advertising services, 1.5 per cent of the gross amount payable.

(3) The rate of tax to be deducted from a payment referred to in clause (c) of sub-section (1) of section 153 shall be

(i) 10 per cent of the gross amount payable in case of sportspersons;

(ii) in case of a company, 6.5 per cent of the gross amount payable; and

(iii) in any other case, 7 per cent of the gross amount payable.

(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

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