The Federal Board of Revenue (FBR) has served a notice to Netflix for recovery of over Rs. 200 million in income tax, official sources told ProPakistani.
Netflix is a streaming service that offers a wide variety of award-winning TV shows, movies, anime, documentaries, and more on thousands of internet-connected devices.
According to the details, Netflix has given different plans ranging from Rs. 250 to Rs. 1,100 a month to its viewers, and viewers living in Pakistan also got Netflix subscriptions.
Sources told Propakistani that Additional Commissioner CTO Islamabad has generated a demand of over Rs. 200 million in two different years as per section 6 of ITO, 2001.
The company has declared Rs. 1.3 billion in revenue during the tax year 2021 alone just in Pakistan, sources added.
Sources said that Netflix and some other companies are providing offshore digital services without having their offices in Pakistan.
The FBR had served notice to the Netflix Singapore office whereas it also established an office in the Netherlands earlier, sources added.
It has also emerged that companies rendering offshore digital services are hiding behind Double Taxation Agreements (DTA) to allegedly evade the tax.
It is pertinent to note that DTA is a contract signed by two countries to avoid or alleviate (minimize) territorial double taxation of the same income by the two countries
It merits mention here that the government of Pakistan had introduced section 6 in the Income Tax Ordinance 2001 to bring every non-resident person who receives any Pakistan-source royalty fee for offshore digital services or fee for technical services.
The Sindh Revenue Board was already taxing non-residents for offshore services but now FBR has also been imposing income tax against the non-resident persons.
Sources said that the Company through its tax consultant also challenged the assessment orders before the Commissioner Appeal FBR however the Commissioner Appeal has given a decision in favor of FBR.
This sounds so ridiculous. You already tax the transaction of payment. You want to tax a company that you don’t benefit in anyway. Fee for what service? Royalty for what contribution?
This is a good decission by FBR as such companeis must pay tax to Pakistani Government. I’m also subscriber of Netflix and the tax you talk about isn’t income tax, its FED, while bank charge transaction fee. Companeis like FB, Google, Yahoo and others who are generating or drawing income from Pakistan must also be included in Tax net, theres nothing wrong in taxing these companies.
So first improve your country’s cyber security and data protection laws so that these companies open their offices in Pakistan, thereby generating taxes and jobs.
The biggest objection of information technology companies is that Pakistan’s data protection laws are very weak.
What data protection Netflix need in Pakistan? Do they have their servers in Pakistan? What will change if they open office in Pakistan interms of data leak?
Tax on the transaction is the advance tax of payee not a Netflix. They must pay taxes on pakistan source receipt.
Every day I wonder what stupidity I will read in the paper. And every day without fail there is something absurd
What stupidity is in this. Every person drawing income from Pakistan is liable to pay income tax. Why are they paying tax in india amd other countries than?
Why tax
And you are now doing it with Netflix
I swear if Netflix paid it then you will see huge change in their plans
Cause Netflix jave chepest one in Pakistan
You all always eat people money saying it for people
Why FBR is saying too much tax these days
I think that the royal king shabas need some huge funds to stole for London
You are charging Netflix now
I really can’t understand you
Let’s hope notice is served on substantial evidence.
What about spotify,us that next?
Im living in Europe and all these companies paying huge taxes here. FBR did good. If they are not paying taxes on their income Ban them.
Agree with Shahbaz dogar
Bruh if it’s banned what should we watch then. The drama everyday on new channels?
Yes, collect tax Netflix so that money is spent on golden commodes of our worthy politicians and opulent marriage halls of our esteemed protectors.
Wish so much interest/criticism was generated on IPPs too.
One of the biggest extortion scams in recent times the beneficiaries of which are the initiators themselves.