Taxation of Salary received in Pakistan from Foreign Employer

Question

I receive monthly compensation against contract with foreign company having local office in Pakistan. Lumpsum salary is received in local account as 'remittance'. No tax deduction shared by company nor bank deducts any tax. Guide regarding taxability with applicable sections.

Answer 1

Your monthly compensation is taxable in Pakistan as salary income since services are rendered in Pakistan.
The fact that payment is received as "remittance" does not exempt it from tax if it relates to local services.
No tax deduction by the company/bank means you must declare income and pay tax yourself at salary slab rates.
If the company is not deducting withholding tax, you are still legally obliged to file and discharge liability as a resident taxpayer.
Failure to declare may attract penaltiesand default surcharge.

Comments

Thanks... as employer is not registered in Pakistan & salary is received in account as remittance, so was expecting tax non-applicability.

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If you're receiving salary from foreign account it is still taxable under export of services.