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Tax on certain payments to non-residents
(1) Subject to this Ordinance, a tax shall be imposed, at the rate specified in Division IV of Part I of the First Schedule, on every non-resident person who receives any Pakistan- source royalty , fee for offshore digital services , fee for money transfer operations, card network services, payment gateway services, interbank financial telecommunication services or fee for technical services.
(2) The tax imposed under sub-section (1) on a non-resident person shall be computed by applying the relevant rate of tax to the gross amounts of receipts mentioned in sub-section (1) .
(3) This section shall not apply to —
(a) any royalty where the property or right giving rise to the royalty is effectively connected with a permanent establishment in Pakistan of the non-resident person;
(b) any fee where the services giving rise to the fee are rendered through a permanent establishment in Pakistan of the non-resident person; or (c) any royalty or fee for technical services that is exempt from tax under this Ordinance.
(4) Any Pakistani-source royalty or fee received by a non-resident person to which this section does not apply by virtue of clause (a) or (b) of sub- section (3) shall be treated as income from business attributable to the permanent establishment in Pakistan of the person.
(2) The tax imposed under sub-section (1) on a non-resident person shall be computed by applying the relevant rate of tax to the gross amounts of receipts mentioned in sub-section (1) .
(3) This section shall not apply to —
(a) any royalty where the property or right giving rise to the royalty is effectively connected with a permanent establishment in Pakistan of the non-resident person;
(b) any fee where the services giving rise to the fee are rendered through a permanent establishment in Pakistan of the non-resident person; or (c) any royalty or fee for technical services that is exempt from tax under this Ordinance.
(4) Any Pakistani-source royalty or fee received by a non-resident person to which this section does not apply by virtue of clause (a) or (b) of sub- section (3) shall be treated as income from business attributable to the permanent establishment in Pakistan of the person.
Amendment history (6)
- Inserted by the Finance Act, 2017
- Inserted by the Finance Act, 2018
- The expression inserted by the Finance Act, 2022.
- services” substituted by the Finance Act, 2022.
- Section 6A inserted by the Finance Act, 2025.
- Sub-section (3) inserted by the Finance Act, 2026.
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 38
Unofficial reference, compiled from the FBR’s consolidated Income Tax Ordinance 2001 (amended up to 30 June 2026). Provided for general information only — not an official FBR publication and not legal or tax advice. Always verify against the official FBR text before relying on it for filing or any decision.