What is the tax rate for IT export services?

Question

I run a software export business. I want to confirm the latest income tax rate for IT exports after the new budget changes.

Answer 1

According to section 154A of ITO,2001, every authorized dealer in foreign exchange, shall at the time of realisation of foreign exchange proceeds on account of exports of IT services or IT enabled services shall deduct tax from the proceeds at the rate of 1% and shall be considered final tax upon fullfillment of following conditions:

1) Return has been filed

2) withholding tax statements for the relevant tax years have been filed if required under the Ordinance

3) no credit for foreign taxes paid shall be allowed.

The person has the option to opt for Final tax regime and who will file return under FTR will have to fulfill the above conditions to avail the benefit of reduced rate of 1%.Moreover, where the exporter is registered with and duly certified by the Pakistan Software Export Board (PSEB), he shall deduct tax at the rate of 0.25% of the export proceeds.And the option for filling of return shall be exercised every year at the time of filling of return under section 114.

And in order to get registered with PSEB, visit official website of PSEB.