FBR proposes tax on social media earnings
The Federal Board of Revenue (FBR) has proposed a special taxation procedure to bring social media content creators earning income from remunerative content into the tax net.
In two separate notifications, the tax collection body sought objections and suggestions within seven days before finalising certain further amendments in the Income Tax Rules, 2002.
“Every non-resident person deriving income from interaction with users in Pakistan through social media platforms to the extent such income constitutes Pakistan-source income under clause (b) of sub-section (3B) of section 10 l of the Income Tax Ordinance, 2001 (XLIX of 2001), subject to the prescribed threshold under these rules,” read the notification.
Under the new mechanism, individuals who deliver content to at least 50,000 users annually will fall under the tax net.
Exceeding 50,000 users during a tax year or 12,250 users during a quarter will fall under the prescribed threshold category.
“Every person under this special procedure shall pay advance income tax calculated by applying the procedure given in rule -l9M and rule-19N for one quarter and shall be payable or recoverable as the case may be as per provisions of section 147 of the Income Tax Ordinance, 2001,” read the notification.
The FBR, however, allowed influencers to claim up to 30% of their social media income as expenses.
