Business & Corporate · IT & ITeS exports · Tax Year 2026-2027
IT Export Tax Calculator
Export proceeds for IT and IT-enabled services are taxed on the receipt, not the profit — your bank deducts a percentage of every remittance. See the deduction, what lands in your account, and how that compares with paying tax on net income.
Step by step
How the deduction works
Client pays into your bank
The remittance must arrive through a banking channel to count as an export receipt.
Bank deducts on the gross
A percentage of the full remittance — not of your profit — is withheld at the point of credit.
Rate follows your registration
Registered exporters meeting the filing conditions get the concessional rate; others pay the standard one.
You still file
Declare the receipts and the deductions in your return. The low rate is conditional on staying compliant.
Who this covers
Exports of IT and IT-enabled services
| Activity | Usually treated as |
|---|---|
| Software development, apps, SaaS work for a foreign client | IT services export |
| Web and mobile design, UI/UX, QA and testing | IT services export |
| Freelance development or design paid via a foreign platform | IT services export |
| Call centre, back-office, medical or legal transcription | IT-enabled service export |
| Data entry, data processing, remote accounting support | IT-enabled service export |
| Digital content, advertising and platform revenue remitted from abroad | Depends on the contract — confirm the treatment |
| Selling physical goods abroad | Not an IT export — different regime |
Classification is decided by what you actually supply and how it is documented, not by your job title. Where a receipt is borderline, get it categorised before the money lands.
Reading the result
Charged on receipts, so costs do not reduce it
The rate is applied to what arrives in your account, not to what you kept. Salaries, cloud hosting, subcontractors and equipment do not reduce the base, which is what makes the low rate workable — and also what makes it unattractive to a business running at a loss.
A software house with heavy costs and a thin margin can pay more under a receipts-based charge than it would on its actual profit.
The concession depends on how the money arrives
Export proceeds need to come through proper banking channels with the encashment documentation to evidence them. The same work paid into an overseas account and moved informally does not attract the same treatment, because the evidence that it was an export receipt never existed.
A low rate is not an exemption from filing
The return still has to be filed, and where registration is a condition of the concessionary rate, registration has to be current. Companies that pay the tax through the bank and skip the return remain off the Active Taxpayer List, which then costs them on every unrelated transaction.
Where this stops
This applies a rate to receipts. Whether your services fall within IT and IT-enabled services as defined, and whether provincial sales tax on services applies to the same work, are separate questions with separate answers.
The provincial services tax calculator covers that second question.
FAQs
IT export tax FAQs
How is IT export income taxed in Pakistan?
Not on profit. When export proceeds for IT or IT-enabled services are remitted through a banking channel, the bank deducts a small percentage of the gross receipt and that deduction discharges the tax on that income. Because the charge sits on turnover, your costs do not reduce it — a low-margin year and a high-margin year on the same receipts pay the same tax.
What rate applies — 0.25% or 1%?
A concessional rate applies to IT and ITeS exporters registered with the Pakistan Software Export Board and meeting the filing conditions attached to it; a higher rate applies to everyone else. Both fields are editable here because the concessional rate has been extended, narrowed and re-conditioned more than once. Confirm your rate against the current withholding table or your bank's deduction advice before relying on it.
Does this cover freelancers on Upwork, Fiverr and YouTube or AdSense earnings?
It covers the same mechanism: foreign-sourced fees for services delivered from Pakistan and remitted through a bank. What matters is that the receipt is an export of services routed through the banking channel, not the platform it came from. Money kept in an overseas wallet and never remitted is outside this deduction — and being outside the deduction is not the same as being outside the tax net.
Is it a final tax or can I claim expenses?
The deduction on receipts is the point of the regime — it substitutes for computing tax on net income, so office rent, salaries and equipment do not reduce it. The comparison panel above shows what the same year would cost if taxed on net income instead, so you can see which basis is cheaper at your margin. Whether you may choose the other basis depends on the conditions in force for your tax year; that is a question for a tax advisor, not an assumption to make.
Do I still have to file a return?
Yes. A deduction at source is not a substitute for filing, and the concessional rate itself is generally conditional on being a filer with returns and statements up to date. Staying off the Active Taxpayers List is the fastest way to lose the low rate.
Is sales tax on services due as well?
Sales tax on services is provincial and export of services is treated differently from a local supply — several authorities zero-rate or exempt exported services, subject to registration and evidence that the service was consumed outside the province. Check your own authority; the federal income-tax deduction modelled here says nothing about it.
Related tools
Not all of your income is exported?
Local fees and mixed income are taxed on the normal basis — work those out separately.
Open Freelancer Tax Calculator