- Finance Act 2025 introduces a definition for digitally delivered services in Pakistan’s income tax framework
- A new clause 17C is added to Section 2 of the Income Tax Ordinance 2001
- Digitally delivered services include those provided via the internet or electronic networks with minimal human involvement
- Examples include streaming platforms, cloud computing, online software subscriptions, telemedicine, e-learning, online banking, digital architectural design, electronic consultancy, and downloadable accounting services
- Both local and foreign entities offering these services in Pakistan may be taxed if consumed by Pakistani users or businesses
- This aligns Pakistan’s tax regime with global practices and aims to capture revenue from the growing online economy
- The reform is expected to expand the tax base and provide a regulatory framework for digital service providers in Pakistan
Source: pkrevenue.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
