Withholding Tax Services At Ebridge
At Ebridge Legal, we offer tax-related services from applications and registrations to filling and deposits. We make the daunting process fast and smooth leaving no room for errors.
Withholding Taxes & its Compliance in Pakistan
Withholding tax (WHT) is mainly a type of ‘presumptive’ tax which is levied on the income in advance. It is based on the notion that an earner with a certain income will “presumably” keep earning the same amount (if not less) in the future.
Withholding Taxes in Pakistan are a major source of Federal revenue which is collected at the national level. Characterized by their adjustable nature, withholding tax regimes is part of the tax system.
Directorate General of Withholding Taxes
Under section 230A of the Income Tax Ordinance 2001, the Directorate General of Withholding Taxes was created through the Finance Act of 2008 to monitor and manage the system of Withholding Tax & its compliance in Pakistan.
You can check the Withholding Tax Forms on the FBR website. Download the Withholding statement template FBR here.
Quarterly Withholding Statement
According to the with-holding tax regulations, every individual collecting/deducting taxes is required to submit to the Commissioner, a quarterly statement. The e-filing of the Quarterly Income Tax Withholding Statement requires the following information:
- Name, CNIC, NTN
- Address of person from whom the collection was made
- The total amount of tax collected/deducted from a person
- The total amount of payments received from a person
- Other prescribed particulars
Income Tax Statement Section 165
For filing an income statement u/s 165, one can visit the IRIS portal monitored by the FBR. Follow the given instructions on the online portal and conveniently file an income statement u/s 165.
Payment of Tax Collected or Deducted
The tax deducted or collected should be paid to the Commissioner by way of credit to the Federal Government.
Taxes with-held shall be deposited to the Commissioner, by the concerned person who is collecting the taxes, within the prescribed time and manner.
FAQs
- What is Withholding tax in Pakistan?
Withholding tax (WHT) is mainly a type of ‘presumptive’ tax which is levied on the income in advance. It is based on the notion that an earner with a certain income will “presumably” keep earning the same amount (if not less) in the future.
- Who is exempt from withholding tax in Pakistan?
An individual receiving a foreign-source salary is exempt from withholding tax in Pakistan in case that individual has paid foreign income tax.
- Why do we deduct Withholding tax?
With-holding taxes provides revenue to the government regularly throughout the year for expenditure and operations. It also serves as an opportunity for taxpayers to fulfill their tax obligations in a manageable manner.
- Do you get withholding tax back?
In case the tax is paid in excess, the taxpayer is properly chargeable under the Ordinance and can apply to the Commissioner for a refund of the excess amount.