RATES FOR WITHHOLDING (INCOME) TAX | TAX YEAR 2020 Tariq Abdul Ghani Maqbool & Co.

Applicable July 01, 2019 to June 30, 2020 as updated vide the Finance Act, 2019 Chartered Accountants Member TAG Group

WHAT THIS DOCUMENT AIMS AT? Tax Rate Nature of Tax Rate Nature of
Activity/ Nature of Payment Activity/ Nature of Payment
Filer Non-Filer Tax Filer Non-Filer Tax
The purpose of this document is to summarize activity-wise rates
and treatment of withholding income tax, taking into account the PAYMENTS FOR SERVICES | S 153(1)(b), 153(2), Div. III & Div IV P III 1st Sch. DOMESTIC AIR TICKETS | Sec 236B, Div IX Part IV 1st Sch
amendments vide the Finance Act, 2019 (the Act). The information Advertising services (elec. & print media) 1.5% 3% On routes for Baluchistan coastal belt,
summarized herein is general and based on our interpretation of the Not Applicable
Transport, Freight forwarding, Air AJ&K, FATA, Gilgit-Baltistan & Chitral
Income Tax Ordinance, 2001 and significant amendments thereto
cargo services, Courier, Manpower Other routes 5% Adv. Tax
vide the Act becoming effective from July 01, 2019 – i.e. for the Tax
outsourcing, Hotel, Security guard,
Year 2020. This information does not constitute any opinion or
Software development, IT and IT SALE/ TRANSFER OF IMMOVABLE PROPERTY | S236C, DvX PIV 1st Sch
advice and may also not be acceptable to taxation authorities in any
enabled services [as defined u/c (133) of To be collected from
particular case. Tax laws are subject to change from time to time Up to 5 Years 1% Advance
Pt I of 2nd Sch.], Tracking services, Seller/ Transferor,
and we do neither warrant at any time the currency of the above 3% 6% Tax
Advertising (other than by print or electronic where Holding Period is: Above 5 Years Not Applicable
details nor accept any responsibility to update the same. Minimum
media), Share registrar services,
Engineering services, Car rental, Tax
FUNCTIONS AND GATHERINGS | Sec 236D, Div XI Pt IV 1st Sch
SALARY | Sec 149, Div I Part I 1st Schedule Building maintenance, Services of
PSX & PMEL, Inspection, Certification, Functions of marriage (in Islamabad,
Taxable Income Lahore, Multan, Faisalabad, Rawalpindi,
Rate of Tax Testing & Training services
From To Gujranwala, Bahawalpur, Sargodha, Sahiwal,
Companies providing other services 8% 16% Sheikhupura, Dera Ghazi Khan, Karachi, Higher of 5% of
Up to 600,000 0%
AOPs & Ind. providing other services 10% 20% Hyderabad, Sukkur, Thatta, Larkana, Mirpur bill ad-valorem
600,000 1,200,000 5% on amount exceeding Rs. 600,000 Khas, Nawabshah, Peshawar, Mardan, or Rs.20,000
Stitching, dying, printing, embroidery, Advance
1% 2% Abbottabad, Kohat, Dera Ismail Khan, Quetta,
1,200,001 1,800,000 30,000 10% on amount > Rs.1.2M washing, sizing & weaving for Exporters Tax
Sibi, Loralai, Khuzdar, Dera Murad Jamali and
1,800,001 2,500,000 90,000 15% on amount > Rs.1.8M Note: No tax to be withheld for payments in case where payments made against services Turbat)
rendered is less than Rs. 30,000/- in aggregate, during a financial year.
2,500,001 3,500,000 195,000 17.5% on amount > Rs.2.5M Higher of 5% of
Functions of marriage in other cities bill ad-valorem
3,500,001 5,000,000 370,000 20% on amount > Rs.3.5M EXECUTION OF CONTRACTS | Sec 153(1)(c), Div III Pt III 1st Sch or Rs.10,000
Received by Listed Companies Adv. Tax
PLUS

5,000,001 8,000,000 670,000 22.5% on amount > Rs.5M 7% 14% Other functions 5% of Bill
8,000,001 12,000,000 1,345,000 25% on amount > Rs.8M
Received by Other Companies
Minimum
Received by sportspersons 10% 20% CABLE OPERATORS & OTHERS | S236F & DivXIII PIV 1st Sch
12,000,001 30,000,000 2,345,000 27.5% on amount > Rs.12M Tax
Received by others 7.5% 15% From IPTV, FM Radio, MMDS, Mobile 20% of the
30,000,001 50,000,000 7,295,000 30% on amount > Rs.30M
TV, Mobile Audio, Satellite TV Channel permission fee
50,000,001 75,000,000 13,295,000 32.5% on amount > Rs.50M ROYALTY TO RESIDENT PERSONS | Sec 153B, Div, IIIB Pt III 1st Sch and Landing Rights or renewal fee
Gross amount of royalty 15% 30% Adv. Tax Advance
Above 75,000,000 21,420,000 35% on amount > Rs.75M From cable operators Various Rates
Tax
From TV channels for screening/ 50% of the
Detailed Handout on TAXATION OF SALARY is available for EXPORTS | Sec 154, Div IV Pt III 1st Sch, Cl 47C Pt IV 2nd Sch viewing Foreign TV Drama serial/ plays permission fee
download at https://tagm.co/pdf/Update-Salary(TY-2020).pdf Realization of export proceeds in any non-English language or renewal fee
[Exemption to cooking oil or vegetable ghee
exported to Afghanistan if tax u/s 148 is paid]
Final Tax
Tax Rate Nature of Inland back-to-back LC by exporter on TAX ON SALES TO DISTRIBUTORS, DEALERS & WHOLESALERS
Activity/ Nature of Payment Exporters
Filer Non-Filer Tax sale of goods under an arrangement BY MANUFACTURERS & COMMERCIAL IMPORTERS | Sec 236G,
may opt for
1% Div XIV Pt IV 1st Sch
prescribed by FBR Minimum
IMPORTS | Section 148 & Part II First Schedule On sale of fertilizers 0.7% 1.4%
Export of goods by EPZ units Tax
Industrial undertakings importing Advance Tax: Regime at On sale of electronics, sugar, cement,
Payment for a firm contract by direct Advance
remeltable steel & directly reduced - raw material
the time of iron & steel products, motorcycles,
or plant & exporters reg. under DTRE Rules, 0.1% 0.2% Tax
iron for own use machinery filing of pesticides, cigarettes, glass, textile,
2001, to indirect exporters
Persons importing potassic fertilizers imported by return beverages, paint, batteries or foam
Realization of proceeds on account of
under ECC‘s decision ECC- industrial 5%
undertakings commission to indenting agent
155/12/2004 dt. 9 Dec 2004 for own use; TAX ON SALES TO RETAILERS & WHOLESALERS BY
Persons importing urea 1% 2% - imports by MANUFACTURERS, DISTRIBUTORS, DEALERS, WHOLESALERS
PROPERTY INCOME/ RENTALS | Sec 155, Div V Pt III 1st Sch
Manufacturers (importing items covered
large Import & COMMERCIAL IMPORTERS | Sec 236H, Div XV Pt IV 1st Sch
houses; Where recipient is a company 15% Adv. Tax
under SRO 1125(I)/2011 dt. 31 Dec’ 2011) - motor vehicles On sale of electronics 1% 2%
Persons importing gold in CBU Other recipients Advance Tax On sale of sugar, cement, iron & steel
condition Annual Rent (Rs.) Advance
Persons importing cotton Tax products, motorcycles, pesticides,
imported by
From To 0.5% 1% Tax
Persons importing LNG on behalf of manufacturers cigarettes, glass, textile, beverages,
of motor Up to 200,000 NIL paint, batteries or foam
Govt. of Pakistan vehicles 200,001 600,000 5% of the amount exceeding 200,000
Persons importing Pulses 2% 4% - Foreign
600,001 1,000,000 20,000 + 10% of the amount above 0.6M
Industrial undertakings importing produced film TAX ON SALES OF PETROLEUM PRODUCTS | S 236HA, DivXVA
1.75% 3.5% for screening 1,000,001 2,000,000 60,000 + 15% of the amount above 1M PIV 1st Sch
plastic raw material (PCT 39.01 to 39.12) & viewing 2,000,001 4,000,000 210,000 + 20% of the amount above 2M
purposes On supply of petroleum products to a Advance
Commercial importers importing 4,000,001 6,000,000 610,000 + 25% of the amount above 4M 0.5% 1%
4.5% 9% petrol pump operator or distributer Tax
plastic raw material (PCT 39.01 to 39.12) Minimum Tax: 6,000,001 8,000,000 1,110,000 + 30% of the amount above 6M
Commercial imports covered under - Goods sold
3% 6% same
Above 8,000,000 1,710,000 + 35% of the amount above 8M COLLECTION OF TAX BY EDUCATIONAL INSTITUTIONS WHERE
S.R.O. 1125(I)/2011 dt. 31 Dec 2011 condition they FEE EXCEEDS RS. 200,000/- | Sec 236I, Div XVI Pt IV 1st Sch
Persons importing coal were imported PRIZES AND WINNINGS | Sec 156, Div VI Pt III 1st Sch
- Edible Oil From residents 5% of Fee Advance
Persons importing finished pharma - Packing On prize bonds & crossword puzzle 15% 30%
4% 8% From non-residents Not Applicable Tax
products, not manufactured locally as Material Raffle, lottery, winning quiz & prizes on Final Tax
- plastic raw 20% 40%
certified by the DRAP sales promotion schemes
material (PCT TAX ON DEALERS, COMMISSION AGENTS & ARHATIS ON
Ship breakers on import of ships 4.5% 9% heading 39.01 ISSUANCE/ RENEWAL OF LICENSE | Sec 236J, Div XVII Pt IV 1st Sch
Companies & industrial undertakings to 39.12), PETROLEUM PRODUCTS | Sec 156A, Div VIA Pt III 1st Sch
5.5% 11% packing Group/ Class A Rs. 100,000 p.a.
not covered above Commission/ discount to petrol pump
material & 12% 24% Final Tax Group/ Class B Rs. 75,000 p.a. Advance
edible oil operators on petroleum products
Others 6% 12% Group/ Class C Tax
Rs. 50,000 p.a.
WITHDRAWAL OF BALANCE UNDER PENSION FUND | Sec 156B Any other category
DIVIDEND | S 150, 236S, Div. I Pt III 1 Sch. & Cl. 11B Part IV 2nd Sch.
st

Dividend from Independent Power Withdrawal before retirement age Lower of 3 past
Withdrawal in excess of 50% balance years’ ART or Final Tax PURCHASE OF IMMOVABLE PROPERTY | S236K, DivXVIII Pt IV 1st Sch
Purchasers, being a pass-through item
at or after retirement age current ART On fair market value 1% 2% Adv. Tax
under Implementation/ Power/ Energy 7.5% 15%
Purch. Agreement, required to be
reimbursed by CPPA-G CASH WITHDRAWALS FROM BANKS | S 231A, Div VI P IV 1st Sch, Cl 28B P II 2nd Sch INTERNATIONAL AIR TICKETS | Sec 236L, Div XX Pt IV 1st Sch
Final Tax By licensed Exchange companies 0.15% Adv. Tax First/ executive class Rs.16,000
Dividend if no tax is payable by the Co. Adv. Tax
25% 50% From PKR accounts against foreign Others, excluding economy Rs.12,000
due to exemption, c/f loss, tax credits Not Applicable (N/A)
remittances credited in such accounts Economy NIL
Other cases, including mutual funds &
repatriation of after-tax profits by 15% 30% Other cases, if total withdrawal from all Advance
N/A 0.6%
branches of foreign companies accounts is Rs.50K+ in a day Tax NON-CASH BANKING TRANSACTIONS | Sec 236P, Div XXI Pt IV
Inter-corp. divid. under group taxation Not Applicable 1ST Sch
TRANSACTIONS IN BANK | Sec 231AA, Div VIA Pt IV 1st Sch Non-cash payment transactions (all types) N/A 0.6% Adv. Tax
All payment transactions N/A 0.6% Adv. Tax
INVESTMENT IN SUKUKS | Sec. 150A, Div. IB Pt III 1 st Sch.
Received by Company 15% 30% Adv. Tax RENT OR PAYMENT FOR RIGHT TO USE MACHINERY &
TAX ON MOTOR VEHICLES | S 231B&234, Div VII, Div III Pt IV 1st Sch EQUIPMENT | S 236Q, Div XXIII Pt IV 1ST Sch
Received by individuals or AOPs and
12.5% 25% Purchase/ transfer of motor vehicles Based on Eng. Cap. Advance To be collected for industrial,
the profit is above Rs. 1M
Final Tax Leasing on Vehicle (based on value) N/A 4% Tax commercial and scientific equipment & 10% Final Tax
Received by individuals or AOPs and machinery
10% 20%
the profit is up to Rs. 1M
BROKERAGE & COMMISSION | Sec 233, Div II Pt IV 1st Sch Note: WHT deduction shall not be applicable in the following cases:
Advertising commission 10% 20% a. Agricultural machinery; and
PROFIT ON DEBT | Section 151, Div. IA Part III 1st Sch. Minimum b. Machinery owned and leased by leasing companies, investment banks,
Where yield is up to Rs. 500,000 10% Life Insur. Comm. up to Rs. 0.5M p.a. 8% 16% modarabas, scheduled banks or DFIs
Tax
Final Tax Others 12% 24%
Where yield is above Rs. 500,000 15% 30%
EDUCATION RELATED EXPENSES REMITTED ABROAD |
TAX COLLECTION BY NCCPL FROM STOCK EXCHANGE MEMBERS Sec 236R, Div XXIV Pt IV 1st Sch
PAYMENTS TO NON-RESIDENTS | S152, Div. IV Pt. I, Div. II Pt. III 1st Sch.
On financing of COT, margin U/s Remittance of tuition fee, boarding &
Royalty or fee for technical services 15% 15% 233AA, Advance
Fee for offshore digital services 5% 10% financing, margin trading or Div IIB Pt 10% lodging expenses, payments for distant Advance
Tax 5%
securities lending IV 1st Sch learning programs and any other Tax
Contracts or related services 7% 14%
Minimum expense related to foreign education
Insurance or re-insurance premium 5% 5%
Tax CNG STATIONS | Sec 234A, Div VIB Pt III 1st Sch
Advertisement services 10% 20% INSURANCE PREMIUM | Sec 236U, DivXXV Pt IV 1st Sch
On the amount of gas bill 4% Min. Tax
Execution of contract by sportspersons 10% 20% General insurance premium N/A 4%
Other payments 20% 20% Advance
ELECTRICITY CONSUMPTION | S235, DivIV P IV 1st Sch, Cl 66 P IV 2nd Sch Life insurance premium above Rs. 0.3M
Tax
N/A 1%
Min. Tax for per annum
PAYMENTS TO PE OF NON-RESIDENTS | S 152, Div. II Pt III 1st Sch. Electricity bill of commercial or AOPs & Ind.
For supplies by PE of N/R Companies 4% 8% industrial consumers | Exporters-cum- for Bill Amt. up
EXTRACTION OF MINERALS | Sec 236V, Div XXVI Pt IV 1st Sch
Various rates to Rs. 360K
For supplies by PE of other N/Resid. 4.5% 9% manufacturers are exempt from this
Adv. Tax for To be collected by provincial revenue
For services by PE of N/R Companies 8% 16% collection
Minimum other cases authority/ board on value of minerals
Advance
For services by PE of other N/Resid. 10% 20% Tax extracted, produced, dispatched & N/A 5%
Tax
For transport services 2% 4% DOMESTIC ELECTRICITY CONSUMP. | S 235A, DivXIX PIV 1st Sch carried away from licensed or leased
For other contracts 7% 14% Monthly bill is below Rs. 75,000 0% Advance areas of mines
Monthly bill is Rs. 75,000 and above 7.5% Tax
PAYMENT FOR FOREIGN PRODUCED COMMERCIALS | Section 152A PURCHASE OF TOBACCO | Section 236X
Foreign produced commercials 20% Final Tax TAX ON STEEL MELTERS, ETC. | Sec 235B, Sec 153(1) To be collected by Pakistan Tobacco
Electricity consumed for producing Board or its contractor on value of Advance
5%
SUPPLY OF GOODS| S153(1)(a), Div. III P III 1st Sch, Cl 24A, 24C P II 2nd Sch steel billets, ingots & MS products, Rs. 1 per unit Non tobacco purchased by a person, Tax
Sale of rice, cottonseed oil & edible oil 1.5% 3% Advance excluding stainless steel, by steel of electricity Adjust- including manufacturers of cigarettes
Sale of cigarettes & pharma products Tax for melters & Composite Steel Units consumed able Tax
1% 2% Listed (Registered for Ch XI of Sales Tax Special REMITTANCE ABROAD THROUGH CREDIT, DEBIT OR PREPAID
by distributors & Large Import Houses Procedure Rules, 2007)
Sale of sugar, cement & edible oil by
companies CARDS | Sec 236Y, Division XVXVII Pt IV 1st Sch
0.25% 0.5% and
dealers & sub-dealers Companies TELEPHONE USERS | Sec 236, Div V Pt IV 1st Sch Gross amount remitted to abroad 1% 2% Adv. Tax
Sale by Corporate FMCG distributors 2% 4% Engaged in Mobile phone bills & prepaid cards 12.5%
Sale of goods by other (non-corporate)
Manu-
Landline bills exceeding Rs. 1,000 10%
Advance REACH US AT…
2.5% 5% facturing. Tax
FMCG distributors Postpaid internet & prepaid net cards 12.5%
Minimum Head Office: 173-W, Block 2, P.E.C.H.S., Karachi
Sale of other goods by companies 4% 8% Tax for other Tel: +92 (021) 34322 582 & 583, 34322 606 & 607
Sale of other goods by AOPs & Ind. 4.5% 9% cases. SALE BY AUCTION | Sec 236A, Div VIII Pt IV 1st Sch Email: info@tagm.co | Web: www.tagm.co
Note: No tax to be withheld in case of (a) where aggregate annual payment is below Rs Sale of property, goods or lease of right Advance LinkedIn: LinkedIn/TAGM | Facebook: FB/TAGM
75,000/- (b) yarn sold by traders to taxpayers specified in the sales tax zero-rated regime as
per Clause (45A) of Pt IV of 2nd Sched. AND (c) purchase of asset under lease & buy back
by public auction or tender 10% 20% Tax
agreement by modarabas, leasing/ banking companies or financial institutions. Sale of lease of the right to collect tolls Final Tax July 6, 2019 | Karachi