Export of services/ foreign salary

Question

What is called freelancing income? Is it related to only foreign sources?

A person is providing services to foreign company online (he says these are IT services ) which is paying fixed 200,000 per month to him in his Pakistani bank account through transfer from foreign bank. How we will treat this in tax return:

1 When we look it at an angle that it is fixed amount which seems salary

2 He doesn't have the proceeds realisation certificates if we consider it as IT services, in this case we will show it in business income?

3 He has the PRC but through purpose code mentioned on it is not correct

4 Can we treat this as remittance only

5 If we mention this in business income(as Export of IT services) then IRIS asks to select any business category in attributable tab. In this case, any business registration in income tax with FBR is mandatory or not? Further, if we select any category like export of IT services then what are the chances to receive tax notices related to business?

Please provide comprehensive answer as this a very confusing as to what rates should apply in each above case any to segregate what is remittance or foreign salary or foreign business income or export of serious and also elaborate in above scenarios what is the implications of Section 111 (4A)

Thanks

Answer 1

How to File Your Taxes as a Freelancer in Pakistan is elaborated in detail here.

For customied solutions we will require the financial details, also you can buy our services, and share financial details to give advise. 

Comments

It is very important common topic, please give a general answer keeping in view above scenarios

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