Tax on certain payments to non-residents
The rate of tax imposed on payments to non-residents shall be 15% of the gross amount of royalty or fee for technical services and 10% in any other case. on every non-resident person who receives any Pakistan source
- royalty fee for offshore digital services fee for money transfer operations,
- card network services,
- payment gateway services,
- interbank financial telecommunication services
- fee for technical services.
- The tax imposed above on a non-resident person shall be computed by applying the relevant rate of tax to the gross amounts of receipts
Exclusions: These rates of tax shall not apply to
(a) any royalty where the property or right giving rise to the royalty is effectively connected with a permanent establishment in Pakistan of the non-resident person;
(b) any fee where the services giving rise to the fee are rendered through a permanent establishment in Pakistan of the non-resident person; or
(c) any royalty or fee for technical services that is exempt from tax under the Income Tax Ordinance.
Any Pakistani-source royalty or fee received by a non-resident person to which this section does not apply shall be treated as income from business attributable to the permanent establishment in Pakistan of the person.
