Netflix Ordered to Pay Rs. 200 Million Income Tax by FBR

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.

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  • 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?

          • Don’t worry about him… He is staying stuff without thinking… It’s as simple as this… You do any business here… You pay tax…

      • Ok so may be this will be implemented but fact is Netflix will also double the price of package or something like that

    • 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

    • What a ridiculous comment. When Netflix is drawing revenue from Pakistan in Billions annually why woud it be exempt from paying income tax? They have cheapest plans in India as well, and they are paying income tax there as well. And still from that revenue they are making huge amount of original content. How much original series netflix made in Pakistan? They aren’t making any Pakistani original content, getting billions in revenue and still it is wrong to pay income tax? What logic is this?

  • You know what’s absurd… So many people defending a american company charging Pakistanis money and taking it aboard without paying tax… Pakistanis are next level… It’s in the bones….not paying tax… Let’s defend them too for not paying tax…

  • Actually they want to put pressure on consumers in pakistan so they can their pocket filled for their 22 to 34 elites families. The hierarchy come from top. No one is watching their news channel. That cause depression and anxiety to our children. There is no family rating in their dramas or movies. All just scripted lies like Pakistan studies and censorship a Time. Talented people who use to bring change are either made to leave the country or adopt like them. Currently they have no other form to put tax on citizen this is only platform that they cannot control or put censorship for their own sake. That is asking such companies to open office later they may block their traffic. Like youtube and etc.
    They want to open to get their talent employees but rather they want to put control so they get more money for their luxury life.
    Can some tell me what kind of information and education channel they are running which safe for families either they like them. Only video logger are earn money in dollars that is contributing to economy. Of which they are holding all taxes. Funny part is no one watches PtV so they put their license in Electricity bill. Why there is no PayPal, amazon, and ali pay the leading techs. Becuase when parcel item arrive at customs they are mostly stolen . My own dash cam video card was stolen. And parcel was tapped.

  • Food for thought.

    Why Pakistani doesn’t want to pay tax to Pak government. But when lives abroad pays all taxes happily.

    What I feel is Pakistani does not get anything in return. All money goes into the pocket of those who keeps on adding more taxes every day.

    So what plant are they watering 🤔

    And our government servants are making decisions that are not producing results.

  • 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.

  • As per knowledge, Netflix doesn’t has a physical office in Pakistan. They are providing services residing in another country. Therefore, they are liable to pay taxes in the country they are residing not in Pakistan.

  • People say, they would raise prices. The tax is on their income, its not general sales tax.
    If they raise prices they will face significant competition.
    We need to stop accepting that the sellers margin would stay the same while they evade taxes.
    Netflix charges you regardless of your usage.
    The only support they need from government is internet and payment system. These two have been available for those who can afford 1000+ just for a TV experience every month(although its cheaper than HD cable walay, they charge 600/TV) i.e. in rich areas.
    They enjoy a new market from govt infrastructure so they should pay taxes.

    Those who think there is no security to open offices here, if they have enough security to do business here take risk to provide services because they know it’s safe enough to make profit then its also safe enough to open offices.

    Anyway, it’s better that they never open offices here. Nerflix is doing fine they don’t need to hire more staff. AI is getting good enough to get rid of scamming cyber thief workesr (which are a lot in Amazon prime).

  • Islamo e likum
    New budget medical pha rma Co’s per duties
    Taxes increase kereen .pharma Co’s kee medicin6 ke prices
    I India say zyyada heen
    Pakistan meen Medicines xpharmaceutical. x 400/500 co,s heen
    Pakistan meen certificate juerti booti ke bhttat
    Hay example nayyab tree ke guuoond
    Ke smuggling say puta chulta hay
    Medicines kay raw materials ko Pakistan
    Co’s uses say Medicines tyyar keeren
    Pakistan meen pharma Medicines ke demand
    Poore kereen pharma /Medicines
    /manufactering key Co’s eastblish key
    Jaayyen %100 Tadda. /quantities ke
    Jaay 10 lakh young ko job deen .Young
    Ko Pharma/Medicines ke eaduction promotion sales maufactering ke training
    Foreigen universities meen dee jay
    Sales promotions youngster’s key starting
    60000 t0 one lakh with car allowances deen
    Sales Representive 9.AM to 12.00 Pm/ 1.00 an
    42C garage meen duties detay heen
    Govt .miniseries of labours Neen duties hours 7.00 to 8.00 hour. Labourers kay hay
    Medicines pharma cos ke rubbery /juberet mushqet
    Lr per nnotice leen pharmaceutical
    Medicines .amanufactering cos workers
    Ko salaries sixty thousand to one lakh
    Rupees per month with car Allowance deen
    42C to 50 c meen employees kaam kerry
    Heen .medicine pharmaceutical cos
    Workers 4 years grade promotions deen
    .Meer Asmat ullah meer
    [email protected]

  • Yes ban them, they don’t care about the net income from Pakistan and will simply stop serving us.

    Be it Google, FB or Netflix, they don’t care what FBR does and we are a drop in their income profile. At the end of the day us people at the losing end.

    I have personally spoken to people at Google and they have verified the above.

    In the end we would have to pay more, rely on vpn and FBR can keep on knocking their doors.

    Agree with the idea of making our country profile better, conducive to business environment and this cannot be done by blocking twitter or threatening these giants, rather working with them and giving them protection.

    They pay taxes in India because they value that market, want to build themselves in that market, whereas Pakistan doesn’t offer stability on any front.

    Only if we had visionaries to ensure and place people of Pakistan before anything else! Good luck FBR, you will not recover a dime!

  • Netflix already offering very reasonable plans keeping in view income of different customers and affordability.
    Fbr is now imposing tax to discourage and spoil businesses of Netflix and other offshore companies.

  • 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.

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