Section 6: Tax on certain payments to non-residents

6. Tax on certain payments to non-residents.— (1) Subject to this Ordinance, a tax shall be imposed, at the rate specified in Division IV of Part I of the First Schedule, on every non-resident person who receives any Pakistan- source royalty 2[, fee for offshore digital services 3[, fee for money transfer operations, card network services, payment gateway services, interbank financial telecommunication services] ] or fee for technical services. (2) The tax imposed under sub-section (1) on a non-resident person shall be computed by applying the relevant rate of tax to the gross 4[amounts of receipts mentioned in sub-section (1)]. (3) This section shall not apply to — (a) any royalty where the property or right giving rise to the royalty is effectively connected with a permanent establishment in Pakistan of the non-resident person; (b) any fee 5[ ] where the services giving rise to the fee are rendered through a permanent establishment in Pakistan of the non-resident person; or (c) any royalty or fee for technical services that is exempt from tax under this Ordinance. (4) Any Pakistani-source royalty 1[ 2[or fee] received by a non-resident person to which this section does not apply by virtue of clause (a) or (b) of sub- section (3) shall be treated as income from business attributable to the permanent establishment in Pakistan of the person.

Effective date: 2001-09-13

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