ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a special procedure for taxation of resident persons and non-resident persons, earning income from remunerative social media content, with income to be determined through a prescribed formula based on views and actual remuneration.
In this regard, the FBR has issued three notifications on Wednesday.
The FBR has notified SRO 1640(I)2026 to specify “Persons Earning Income from Remunerative Social Media Content”.
The FBR has issued SRO 1641(I)/2026 for resident persons and SRO 1642(I)/2026 for non-resident persons.
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Under the new procedure (SRO 1642(I)/2026), the rules will apply to non-resident persons earning income from remunerative social media content, where such income constitutes Pakistan-source income through interaction with users in Pakistan, subject to the prescribed user threshold.
The FBR has prescribed a threshold of more than 50,000 users during a tax year or 12,250 users during a quarter for qualifying as systemic and continuous solicitation of business activities or engagement in interaction through digital means.
The new rules provide that the minimum income from remunerative social media content for a tax year will be calculated by deducting total expenses from total remuneration received. The expenses, however, will be allowed up to a maximum of 30 percent of total revenue.
For determining total remuneration, the rules provide that the amount will be the higher of the remuneration calculated on the basis of the prescribed revenue-per-mille (RPM) formula and the actual remuneration received from social media content, whether received in cash or in kind.
The FBR has specifically prescribed Rs195 per 1,000 YouTube video views as the RPM for the special procedure. The notification provides that the RPM may be revised from time to time.
Through SRO 1641(I)/2026, the FBR amended the Income Tax Rules, 2002 by inserting a new Chapter-IIA-Special Procedure for Taxation of Persons Earning Income from Remunerative Social Media Content.
The new procedure applies to resident persons earning income from interaction with users in Pakistan through social media platforms. The rules have been framed under Section 99C read with Section 237 of the Income Tax Ordinance, 2001.
Under the notified mechanism, the minimum income from remunerative social media content for a tax year will be calculated by deducting allowable expenses from total remuneration received. Expenses will be recognised up to a maximum of 30 percent of total revenue.
The rules further provide that total remuneration received from remunerative social media content will be the higher of two amounts: RPM multiplied by the total number of views divided by 1,000, or the actual remuneration received from the social media content, whether in cash or in kind.
For this purpose, the FBR has prescribed Rs195 as RPM, meaning revenue generated per 1,000 views on a video shared on YouTube. The prescribed rate may be revised from time to time.
Where a person considers that actual remuneration is lower than the amount calculated on the basis of the prescribed RPM threshold, the taxpayer will be required to provide evidence to the satisfaction of the Commissioner to establish the lower amount.
The FBR has also provided for quarterly advance income tax under Section 147 of the Income Tax Ordinance, with the advance tax to be calculated according to the prescribed rules relating to income and remuneration from social media content.
The income is required to be declared in a special part of the income tax return for each tax year. If the declared income is lower than the amount calculated under the prescribed procedure, the relevant Commissioner may rectify the omission or error in the return and recover the amount due under the Income Tax Ordinance, 2001.
The FBR has defined a social media platform as an internet-based service primarily enabling users to interact and share user-generated content where economic value arises from user participation, network effects and monetisation of user engagement or data. Remunerative social media content covers content generating remuneration in any form.
The notification also provides that all provisions of the Income Tax Ordinance, 2001 not specifically dealt with under the new procedure will continue to apply, mutatis mutandis, to persons earning income from remunerative social media content.
Copyright Business Recorder, 2026
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