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.
