09-05-2007, 11:40 PM
Dear,
Notwithstanding to which person u have addressed ur message, I invite your attention towards deduction of tax from the amount payable to non-resident consultant.
This deduction is covered under section 152 of Income Tax Ordinance 2001. You have to check the nature of your contarct with the consultant to establish that would it be covered under subsection 1 or 1A of section 152. Tax rates for different sort of services are different. However, tax deduction has to be made on gross amount. Of course any out of pocket expenses or other facilities given to him under the contract are not subject to deduction of tax. Only the gross amount of his fee or charges excluding out of pocket expenses are subject to deduction.
Following are the rates applicable to different situations
Royalty payments 15%
Fee for technical services 15%
Payments against Certain contracts 6%
Others 30%
You must study section 152 and relevant clauses of first schedule along with establishing the nature of services your consultant have provided to you.
If you will apprise the details, I may advise you further.
Regards,
Kamran
Notwithstanding to which person u have addressed ur message, I invite your attention towards deduction of tax from the amount payable to non-resident consultant.
This deduction is covered under section 152 of Income Tax Ordinance 2001. You have to check the nature of your contarct with the consultant to establish that would it be covered under subsection 1 or 1A of section 152. Tax rates for different sort of services are different. However, tax deduction has to be made on gross amount. Of course any out of pocket expenses or other facilities given to him under the contract are not subject to deduction of tax. Only the gross amount of his fee or charges excluding out of pocket expenses are subject to deduction.
Following are the rates applicable to different situations
Royalty payments 15%
Fee for technical services 15%
Payments against Certain contracts 6%
Others 30%
You must study section 152 and relevant clauses of first schedule along with establishing the nature of services your consultant have provided to you.
If you will apprise the details, I may advise you further.
Regards,
Kamran