The fee for offshore digital services means any consideration for providing or rendering services by a non-resident person for online advertising including digital advertising space, advertising, emails, online computing, blogs, online content and online data, digital audio/video and online collection or processing of data related to users in Pakistan.
According to the Finance Act, 2018, a fee for offshore digital services shall be Pakistan-source income if it is paid by a resident person, except where the fee is payable in respect of services utilized in a business carried on by the resident outside Pakistan through a permanent establishment or borne by a permanent establishment in Pakistan of a non-resident person.
Every banking company or a financial institution remitting outside Pakistan an amount of fee for offshore digital services, chargeable to tax to a non-resident person on behalf of any resident or a permanent establishment of a non-resident in Pakistan shall deduct tax from the gross amount paid at the specified rate, the Finance Act said.
Under the Finance Act, 2018, fee for offshore digital services means any consideration for providing or rendering services by a non-resident person for online advertising including digital advertising space, designing, creating, hosting or maintenance of websites, digital or cyber space for websites, advertising, emails, online computing, blogs, online content and online data, providing any facility or service for uploading, storing or distribution of digital content including digital text, digital audio or digital video, online collection or processing of data related to users in Pakistan, any facility for online sale of goods or services or any other online facility.
A fee for offshore digital services shall be Pakistan-source income, if it is: (a) paid by a resident person, except where the fee is payable in respect of services utilized in a business carried on by the resident outside Pakistan through a permanent establishment; or (b) borne by a permanent establishment in Pakistan of a non-resident person.
Under the Act, every banking company or a financial institution remitting outside Pakistan an amount of fee for offshore digital services, chargeable to tax under section 6, to a non-resident person on behalf of any resident or a permanent establishment of a non-resident in Pakistan shall deduct tax from the gross amount paid at the rate specified in Division IV of Part I of the First Schedule.
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