- Introduction of Withholding Tax: Pakistan’s Federal Board of Revenue has announced the implementation of a new withholding tax on payments for digitally ordered goods delivered via local online marketplaces through Notification S.R.O. 1429(I)/2025, introduced as part of the Finance Act 2025.
- Withholding Tax Rates: The tax is set at a flat rate of 1% on gross amounts for digital or banking payments made through payment intermediaries, and 2% for cash-on-delivery payments made via courier services.
- Compliance Requirements: Payment intermediaries and couriers are mandated to withhold the respective tax and deposit it, along with submitting monthly statements electronically by the 10th of the following month. Online marketplaces must also submit monthly statements but are not required to withhold taxes. Specific forms for these submissions (STR-34, STR-35, STR-36) are included in the notification.
Source Orbitax
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