Tax Book 2023

Final Tax Regime and Minimum Tax Chapter- 22

than a

company case

10%

152(2A)(c) Payment on execution of contract

10% in case of

a sportsperson

7% in case of

other than a

company

Nil

Minimum

tax Any person^

2. Sub-section (1AA) shall not apply to an amount, with the written approval of the Commissioner
   Inland Revenue that is taxable to a PE in Pakistan of the non-resident person.


3. The tax deductible as above shall be a Minimum Tax on the income of a non-resident person
   except the following:
    Royalty and fee for technical services connected or through Permanent Establishment
   (PE) of non-resident in Pakistan.

 Exempt royalty and fee for technical services.

4. In this section “prescribed person” means a prescribed person as defined in sub-section (7) of

section 153.

5. 
   

   The Commissioner may, on application made in the prescribed form by the recipient of
   payment referred to in sub-section (1A) having permanent establishment in Pakistan, or by a
   recipient of payment referred to in sub-section (2A), as the case may be, and after making such
   inquiry as the Commissioner thinks fit, allow by order in writing, in cases where the tax
   deductable under sub-section (1) or sub-section (2A) is not minimum tax, any person to make
   the payment without deduction of tax or deduction of tax at a reduced rate.

   
   


6. 
   

   Payment for foreign produced commercials [Section 152A]

   
   

Omitted by Finance Act, 2021.

6. Sale of goods, rendering of services and contracts [Section 153(a) and (c)]:

Every prescribed person making a payment to a resident person shall deduct tax at the time of

payment (including sales tax) as per following schedule:

Payment for: Rule for tax deduction

Sale of goods

including Toll

manufacturing

1. Tax shall be deducted on gross amount payable including sales tax.


2. In case of sale of rice, cotton seed oil or edible oils, rate of tax is 1.5%.


3. Supply made by distributors of fast moving consumer goods is 2 % if
   supplier is company & 2.5% if supplier is other than a company.


4. In case of sale of any other goods, rate of tax is 4 % if supplier is a
   company and 4.5% for other than a company.


5. Reduced rates under second schedule where applicable.

Rendering of

services

a) Tax shall be deducted on gross amount payable.

2. 3% in case of transport services, freight forwarding services, air cargo
   services, courier services, manpower outsourcing services, hotel services,
   security guard services, software development services, IT services and IT
   enabled services as defined in section 2, tracking services, advertising
   services (other than by print or electronic media), share registrar services,
   engineering services including architectural services, warehousing services,
   services rendered by asset management companies, data services provided
   under license issued by the Pakistan Telecommunication Authority,
   telecommunication infrastructure (tower) services, car rental services,
   building maintenance services, services rendered by Pakistan Stock