SATURDAY APRIL 02: Commission liable to 10 percent WHT: FBR

April 04, 2011

RECORDER REPORT

0 Comments

The Federal Board of Revenue on Friday announced that brokerage/commission earned in five zero-rated sectors - textile, leather, surgical, sports and carpets would be liable to 10 percent withholding tax which would be final discharge of tax liability. In this connection, the FBR issued a circular number 3 of 2011 here on Friday to clarify the deduction of withholding tax on commission payments made by sales tax zero-rated categories of taxpayers.

According to the FBR, it is clarified that under the provisions of section 233 of the Income tax ordinance, 2001, withholding tax is deductible @ 10 percent on payments made on account of brokerage commission, in the following categories of taxpayers falling under the zero-rating regime of sales tax including carpets; leather and articles thereof including artificial leather footwear; surgical goods; sports goods and textile and articles thereof. It is clarified that as provided under sub-section (3) of section 233 of the Income Tax Ordinance, 2001 tax collected shall be final tax on the income from brokerage/commission of such person, the FBR added.