Export of software/ IT services/ IT enabled services is now subject to 0.25% of export proceeds subject to fulfillment of the following conditions:

  • Registration with PSEB
  • Annual tax return has been filed;
  • Withholding statements have been filed;

Sales tax returns for Federal & Provincial tax authorities (whichever is applicable) have been filed.

In case condition “a” i.e. PSEB registration is not fulfilled, tax deduction rate will be 1% but would still be Final Tax Regime (FTR).

If any of the conditions from “b” to “d” are not met than the person goes under Normal Tax Regime (NTR).

NTR means the following taxation become applicable:

Small Company: Tax liability is higher of following under NTR:

  • 20% of taxable income
  • 17% of accounting income
  • 1.25% of turnover

Other than Small Companies: Tax liability is higher of the following under NTR:

  • 29% of taxable income
  • 17% of accounting income
  • 1.25% of turnover

Individual/ AOP with more than Rs.100 million gross sales/ revenue/ turnover in any year 2017 and onwards: Tax liability is higher of following:

  • % of taxable income as per slab rates – highest slab is 35% – please check table at the end of this document for complete slab rates
  • 1.25% of turnover

Individual/ AOP with less than Rs.100 million gross sales/ revenue/ turnover: Tax liability is % of taxable income as per slab rates – highest slab is 35% – please check table at the end of this document for complete slab rates.