PAKISTAN TAX ADVISE
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WITHHOLDING TAX CHART

Section

Responsible person

Nature of Payment/
Transaction

Rate

Adjustable/
final

Period of Statement/ Rule

Due Date

148

Collector of Customs

Imports (not otherwise specified)



Import under Afghan Transit [Cl. (9), Part II, Second Schedule]

Import of edible oil & condemned ships
[Cl. (13), Part II, Second Schedule].

Import of di-ammonium phosphate (DAP) fertilizer [Cl. (13A), Part II, Second Schedule].

Import of items mentioned in Cl. (13B), Part II, Second Schedule.

Import of gold [Cl. (14), Part IV, Second Schedule].

Import of silver [Cl. (14), Part IV, Second Schedule].

Exemptions from deductions

1)  Re-importation of re-usable containers for re-export qualifying for customs-duty and sales tax exemption on temporary import under the Customs Notification No. 344(I)/95, dated 25.4.1995.
[Sec. 148(2)(a)]

2)  Import of Motor Spirit (MS), Furnace Oil (FO), JP-1 and MTBE [sec. 148(2)(b)].

3)  Import of raw material by manufacturer (other than edible oil) for his own use:

     i)   where aggregate of tax paid/collected equals the amount of tax paid in the immediately preceding year
[Sec. 148(3)]

    ii)   where income is exempt or he is not likely to pay tax on account of depreciation or B/F losses
[Sec. 148(4A)]

For further exemptions see Appendix 3 of Practical Handbook of Income Tax.

6% of the value




3/4th of rate applicable on such goods. 

3%




1%




2%



Rs. 2/- per
11.664 gms.

Rs. 5/- per kg

Final except in the case of an *industrial undertaking.

Final



Final




Final




Final



Final


Final

Six monthly/ rule 62

Annual/rule 62

15 Jan. and 15 July

31 August

Important

100% reduction in tax rate where manufacturer:

 

 

   

(i)   imports raw material (other than edible oil) for his own use and the aggregate of tax paid/ collected equals the amount of tax paid in the immediately preceding year [s. 148(3)]; or

(ii)   is not likely to pay tax on account of depreciation or brought forward losses [(148(4A)].
 

 

 

   

149

Employer

Salary (including value of perquisites computed as per law/rules)
(See Circulars 15 & 18 of 2004).

Average

Adjustable

Quarterly/rule 51B

Annual/rule 51A

15 Oct., 15 Jan., 15 Apr. & 15 July
31 August

150

Every resident Company

Dividend paid to a public company or insurance company

All other cases

However the following concessions are to be noted:

In case of non-resident companies, receiving dividend from a company engaged in mining operations not being petroleum. Cl. (16), Part II, Second Schedule.

-   On dividend declared/ distributed by purchaser of power project privatized by Wapda – Cl. (17), Part II, Second Schedule.

-   On dividend declared/ distributed by a company set up for power generation. Cl. (20), Part II, Second Schedule.

5% of gross payment


10% of gross payment




7.5%








7.5%





7.5%

Final



Final





Final








Final





Final

Annual/rule 52
On every declaration.

NB: No statement has been prescribed under the rules.
31 August
Within sixty days from declaration.
   

151(1)(a)

Any person making payment

Yield on accounts, deposits or certificates under the National Savings Scheme or Post Office Savings Account.

10% of the yield
(no withholding tax on investment upto 150,000/-)

Adjustable

Quarterly/rule 54 & 55
Annual/rule 54 & 55
15 Oct., 15 Jan., 15 Apr. & 15 July
31 August

151(1)(b)

Banking company or financial institution

Profit on debt on an account or deposit.

10% of the yield

Adjustable

Quarterly/rule 54 & 55
Annual/rule 54 & 55
15 Oct., 15 Jan., 15 Apr. & 15 July
31 August

151(1)(c)

Federal/Provincial Govt./local authority

Profit on securities, other than those mentioned in s. 151(1)(a), issued by Federal/Provincial Governments or a local authority

20% of the yield

Adjustable

Quarterly/rule 53

Annual/rule 53
15 Oct., 15 Jan., 15 Apr. & 15 July
31 August

151(1)(d)

Banking company, a financial institution, a company or finance society

Profit on bonds, certificates, debentures, securities or instruments of any kind (other than loan agreements between borrowers and banking companies or development financial institutions) payable to any person other than financial institution

10% of the yield

Adjustable

Quarterly/rule 53

Annual/rule 53
15 Oct., 15 Jan., 15 Apr. & 15 July
31 August

151(2)

  In case of non-resident recipients


Important
In all above cases gross amount shall be taken as reduced by zakat deducted, if any.
30% of the profit

Adjustable

Quarterly/rule 58

Annual/rule 58
15 Oct., 15 Jan., 15 Apr. & 15 July
31 August
152 Every Person 1.   Royalties or fee for technical services to non-residents 15% of the gross amount

Final

Quarterly/rule 58 15 Oct., 15 Jan., 15 Apr. & 15 July
   

2. Any payment to non-resident other than royalties, fee for technical service and the following:

(a) on account of salary, dividend, contractual payments u/s 153(3), rent, winnings & prizes;

(b) taxable in the hands of a PE in Pakistan of the non-resident person;

(c) payable by a person who is liable to pay tax as representative of the non-resident; or

(d) not chargeable to tax in the hands of the non-  resident

30% of the gross amount Adjustable Annual/rule 58 31 August
    Important
For making payment without deduction of tax, a notice is to be given to the Commissioner communicating the nature and amount of payment along with the name and address of the non-resident person. The Commissioner is bound to pass an order within 30 days accepting the contention or in case of disagreement, to pass an order directing for deduction of tax. However, prior clearance from the Commissioner is not required in the following cases:
       
   

(a) on import of goods where title passes outside Pakistan and payment is not related to supply of goods to a PE in Pakistan; supply is made between associates or supply is made by a resident person or a Pakistani PE of a non-resident; or

(b) education and medical expenses remitted in accordance with the regulations of SBP.
 

       

153(1)(a)

 

- Federal Govt./ Provincial Govt.
- Company
- AOP constituted or formed under the law
- Foreign contractor or consultant
- Consortium or Joint Venture

Payment in full or in part including by way of advance to:

 

 

Quarterly/rule 56
 
15 Oct., 15 Jan., 15 Apr. & 15 July

1.  A resident or permanent establishment (PE) of non-resident;

 

 

Annual/rule 56 31 August
- for sale of rice, cotton seed, cotton, *edible oil; 1.5% of the gross payment

Final

   
- for sale of any other goods 3.5% of the gross payment

Final

   
153(1)(b)



 
  - Transport services; 2% of the payment **Adjustable/ Final    
- Other services; 5% of the payment ***Adjustable/ Final    
153(1)(c)









 
  On execution of a contract, other than for supply of goods or the rendering of professional services:

i) 
contract not exceeding Rs. 30m

ii)
contract exceeding Rs. 30m






5% of gross payment

6% of gross payment






Final
   
Final    
153(3)








































































 
  2.  A non-resident person on the execution of:

(a) Turn key contract


(b)
Contract or subcontract for the design, supply of  plant and equipment or construction of power project

(c) Contract or sub-contract under a construction, assembly or installation project in Pakistan including a contract for the supply of supervisory activities relating to such contract.

(d) All other contracts:

i) contract exceeding Rs. 30m

ii) contract not exceeding Rs. 30m

(e) Contract for advertisement services rendered by TV satellite channels.




8% of gross amount

5% of gross amount for hydel power or construction line
4% for any other power project







6% of gross amount

5% of gross amount




Final


Final





Final









Final


Final
   

Important: Section 153(1) shall not apply to:

-sale of imported goods where the importer of the goods has paid tax u/s 148 in respect of such goods and the said goods are sold in the same condition in which they were imported;

-
any payment by Federal/provincial govt./local authority for construction material supplied to the contractor by them.

-
a refund of any security deposit;

-
purchase of assets under sale and lease back agreement   by a leasing company, Modaraba, banking or financial institution; and

-
securitization of receivables by Special Purpose Vehicle to originator.
 

       

154(1)

Authorized dealer/Banking company

On realization of proceeds on account of export of goods mentioned in the 7th Schedule:

 

 

Quarterly/no statement prescribed.
Annual/rule 59
15 Oct., 15 Jan., 15 Apr. & 15 July
31 August

Part I

0.75%

Final

   

Part II

1.0%

Final

   

Part III

1.25%

Final

   

154(2)

 

On realization of proceeds on account of commission to indenter except export indenting commission agent.

Export indenting commission agent [Cl. (5), Part II, Second Schedule].

5%


 

0.75% to 1.25%

*Adjustable Quarterly/no statement prescribed.
Annual/rule 59
15 Oct., 15 Jan., 15 Apr. & 15 July
31 August

154(3)

Banking company

On realization of proceeds on account of sale of goods to an exporter under inland back to back LC or any other arrangement as may be prescribed by CBR

0.75% to 1.25%

Final

Quarterly/no statement prescribed.
Annual/rule 60
15 Oct., 15 Jan., 15 Apr. & 15 July
31 August

154(3A)

EPZ Authority

Export of goods located in EPZ

0.75% to 1.25%

Final

Quarterly/no statement prescribed.
Annual/No statement prescribed in rules.
15 Oct., 15 Jan., 15 Apr. & 15 July

31 August

154(3B)

Direct exporter/export house registered under DTRE Rules, 2001

Payment to indirect exporters as defined in DTRE Rules, 2001

0.75% to 1.25%

Final

Quarterly/no statement prescribed.
Annual/No statement prescribed in rules.
15 Oct., 15 Jan., 15 Apr. & 15 July

31 August

155

Federal Govt./ Provincial Govt.; Company; Foreign Mission;  Foreign Contractor or Consultant; Consortium or Joint Venture

Any payment in full or in part including by way of advance on account of rent of immovable property including rent of furniture and fixtures and services relating to such property

NB. Above provisions apply where amount of annual rent exceeds Rs. 300,000.

5% of the
gross rent

Adjustable

Quarterly/rule 57

Annual/rule 57
15 Oct., 15 Jan., 15 Apr. & 15 July
31 August

156

Every person

Payment of prize on prize bond

Payment on a winning from a raffle, lottery, prize on winning a quiz, prize offered by companies for promotion of sale or crossword puzzle

(Where such amount is not paid in cash then tax is to be collected from the recipient on fair market value of the prize)

10%


20%

Final


Final

Annual/rule 61 31 August
156A Every person Payment to petrol pump operator on account of sale of petroleum products 10% of amount of commission Final Annual/No statement has been prescribed for section 156A though rule 65 (applicable to omitted s. 157) is relevant. 31 August
233 Every person - Commission income of indenting commission agents*, advertising agents and yarn dealers.

- Payment of brokerage or commission to travel agents & insurance and any other commission not mentioned above.
5% of the amount of payment


10% of the amount of payment
Final for tax year 2005
and onward


Final for tax
 year 2005
and onward
Quarterly/rule 54 & 55
Annual/rule 54 & 55
15 Oct., 15 Jan., 15 Apr. & 15 July
31 August
233A(1)(a) Stock Exchange registered in Pakistan On purchase of shares in lieu of the commission earned by its members. 0.005% of purchase value Final for tax year 2005
and onwards
**Monthly/rule 66A 25th of each month
(1)(b)   On sale of shares in lieu of the commission earned by its members. 0.005% of sale value Final for tax year 2005
and onwards
   
(1)(c)   From its members in respect of trading of shares. 0.005% of traded value Adjustable    
(1)(d)   From its members in respect of financing of carryover trade (Badla) in shares business. 10% of carryover charge Adjustable    

234

 

Person collecting motor vehicle tax

From plying or hiring of goods transport;

as per Part IV Division III of First Schedule.

Final

Annual/rule 64 31 August
passenger transport; and

Adjustable

   
private motor cars

Adjustable

   

235

Person preparing electricity bills.

Commercial and industrial consumer

As given in Part IV Division IV
of First Schedule.

Adjustable

Annual/no statement prescribed in rules 31 August

236

Person preparing telephone bill/issuing or selling prepaid card for mobile phones.

Telephone/prepaid card for mobile phone subscribers

As given in Part IV Division V of First Schedule.

Adjustable

Quarterly/rule 66

Annul/rule 66
15 Oct., 15 Jan., 15 Apr. & 15 July
31 August

 

*  As per para 4(i) of CBR’s Circular No. 6 of 2003 all services rendered, other than by professionals, are to be treated as final tax under section 153(1)(c). Any income arising from goods transport vehicles falls under presumptive tax regime as provided in 234(5). How can the same income be taxed twice and that too under presumptive tax regime? ‘Transport services’ is mentioned in isolation and without considering section 234(5). Transport facilities provided under ‘contracts’ do not constitute ‘contract for services’. These are simple contracts, other than for services. Legally, all kinds of transport contracts are covered under presumptive tax regime u/s 153(c). The use of the term “transport services” vis-à-vis its liability fixed under section 153(1)(b) in Division III, Part I of the First Schedule [see para 2(a)] negates CBR’s Circular No.6 of 2003 [para 4(i)]. Whether CBR is misleading the taxpayers or overriding the law can be anybody’s guess?

** As per para 4(i) of CBR’s Circular No. 6 of 2003 all services rendered, other than by professionals, are to be   treated as final tax under section 153(1)(c). This interpretation is contrary to law but taxpayers can avail the benefit of any concessional administrative instructions.

[1] In the repealed Ordinance section 50(5A) provided presumptive taxation of commission received in foreign exchange by indenting agents from foreign principals. In Circular No. 8 of 1999 CBR confirmed that tax deducted at the rate of 10% shall be discharge of final liability in respect of such income from assessment year 2000-2001. In section 154 of the new Ordinance export indenting commission is not mentioned but reduced rate of deduction is given in clause (5) Part II of the Second Schedule to the Ordinance. Since the circular has not been withdrawn and concessional rate is provided, inference can be drawn that the Legislature wanted to extend the same benefit to the indenters as available to the exporters or export buying houses.

 

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