FBR Announces Withholding Tax Rates for Export of Services for Fiscal Year 2025-26

• FBR updates withholding tax rates for export of services for fiscal year 2025-26
• Rates issued under Section 154A of the Income Tax Ordinance, 2001
• Key tax rates for export of services:
• 0.25 percent for computer software, IT services, or IT-enabled services for ATL taxpayers
• 0.5 percent for non-ATL taxpayers in the same category
• 1 percent for all other export services for ATL persons
• 2 percent for non-ATL persons in other categories
• Export of services includes IT and software services, technical services abroad, royalty and commission, construction contracts, and other notified services
• Exporters must file annual income tax returns, submit withholding tax statements, and file sales tax returns if applicable
• Non-compliance may lead to standard taxation instead of final tax treatment
• Policy aims to encourage export of services by maintaining low tax rates for compliant taxpayers, especially in IT and digital sectors

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.

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