Business & Corporate · Section 152 · Tax Year 2026-2027
Non-Resident Withholding Tax Calculator
A Pakistani payer deducts tax under section 152 when paying a non-resident: 15% on royalties and technical fees, 20% on any payment without its own rate, less where a treaty gives a lower rate. On Rs 1,000,000 of royalty the payer deducts Rs 150,000. Tax on your own income as an overseas Pakistani starts with your residence status: see the resident or non-resident status calculator.
| Payment | Rate | Tax on Rs 1,000,000 | Gross for Rs 1,000,000 net | Nature |
|---|---|---|---|---|
| Royalty or fee for technical services | 15% | Rs 150,000 | Rs 1,176,471 | Final |
| Fee for offshore digital services (remitted by a bank) | 15% | Rs 150,000 | Rs 1,176,471 | Final |
| Card network, payment gateway, money transfer or interbank messaging fee (paid by a bank or exchange company) | 10% | Rs 100,000 | Rs 1,111,111 | Final |
| Construction, assembly or installation contract in Pakistan, or related services | 7% | Rs 70,000 | Rs 1,075,269 | Minimum |
| Insurance or reinsurance premium | 5% | Rs 50,000 | Rs 1,052,632 | Minimum |
| Advertising by a non-resident media person relaying from outside Pakistan | 10% | Rs 100,000 | Rs 1,111,111 | Minimum |
| Foreign-produced commercial for advertisement in Pakistan | 20% | Rs 200,000 | Rs 1,250,000 | Final |
| Profit on debt (interest) to a non-resident without a permanent establishment | 10% | Rs 100,000 | Rs 1,111,111 | Adjustable |
| Any other payment to a non-resident | 20% | Rs 200,000 | Rs 1,250,000 | Adjustable |
| Payment to a Pakistani permanent establishment for goods | 5.5% (company 5%) | Rs 55,000 | Rs 1,058,201 | Minimum |
| Payment to a Pakistani permanent establishment for listed services (transport, freight, courier, manpower, hotel, security, engineering, car rental and others) | 8% | Rs 80,000 | Rs 1,086,957 | Minimum |
| Payment to a Pakistani permanent establishment for IT or IT-enabled services (software development, maintenance, web design, hosting) | 4% | Rs 40,000 | Rs 1,041,667 | Minimum |
| Payment to a Pakistani permanent establishment for other services | 15% | Rs 150,000 | Rs 1,176,471 | Minimum |
| Payment to a Pakistani permanent establishment on a contract (other than for goods or services) | 8% | Rs 80,000 | Rs 1,086,957 | Minimum |
| Payment to a sportsperson's Pakistani permanent establishment on a contract | 15% | Rs 150,000 | Rs 1,176,471 | Minimum |
Reading the result · Tax Year 2026-2027
How much tax is deducted on a payment to a non-resident?
It depends on what the payment is for. Rs 1,000,000 of royalty or technical fees carries Rs 150,000, final for the non-resident; the same amount for something with no rate of its own carries Rs 200,000 under section 152(2). Payments to a non-resident’s permanent establishment in Pakistan have their own rates, set by the kind of goods, services or contract.
Treaty rates cut it; the active taxpayers’ list mostly does not raise it
A treaty rate of 10% on the same royalty would leave Rs 100,000 to deduct, Rs 50,000 less, with section 107 giving the treaty effect. The active taxpayers’ list matters only for payments to a permanent establishment, the one kind doubled off it: Rs 1,000,000 for listed services to a permanent establishment off the list is withheld at 16%, Rs 160,000, of which Rs 80,000 is the extra for being off the list.
Net-of-tax contracts cost more than the rate
When the payer has promised the non-resident a fixed amount after tax, the tax is the payer’s cost and is worked on the grossed-up figure: to leave Rs 1,000,000 after 15%, the payer pays Rs 1,176,471 and deducts Rs 176,471, which is 17.65% of the net, not 15%.
Where this stops
The page applies one rate to one payment. It does not decide whether a payment is Pakistan-source, which treaty article applies, or whether a permanent establishment exists, and it does not cover capital gains through SCRA, FCVA or NRVA accounts (s.152(1D)-(1DA)), sukuk returns (s.152(1DB)) or section 151B, and Part IV of the Second Schedule switches section 152 off for some named payers and payees. Sales tax on imported services and the payer's own deduction for the expense are separate. Payments to a resident for services or contracts are on the section 153 services calculator. Provincial sales tax on services, which a recipient pays on many services from abroad, is on the sales tax on services calculator.
FAQs
Non-resident withholding tax FAQs
Who deducts tax on a payment to a non-resident?
The person making the payment deducts the tax from the gross amount when paying, and pays it to the government within the time prescribed (s.160). Section 152 covers royalties and fees for technical services, construction and installation contracts, insurance premiums, advertising by foreign media, profit on debt, and most other payments to a non-resident, with separate rates for payments to a non-resident's permanent establishment in Pakistan, which only a prescribed person deducts. A payer who fails to deduct is personally liable for the tax (s.161), and cannot deduct the expense until the tax is paid (s.21(c)).
What rate applies to royalties and technical fees?
Royalties, fees for technical services and fees for offshore digital services paid to a non-resident are taxed at 15% of the gross amount (section 6, First Schedule Part I Division IV), deducted by the payer under section 152(1), or for offshore digital services by the remitting bank under section 152(1C). On Rs 1,000,000 that is Rs 150,000. The tax is final unless the right or the services are connected with a permanent establishment in Pakistan.
Is the tax final for the non-resident?
The royalty and technical-fee tax under section 6 is a final tax (s.8), as is the tax on foreign-produced commercials (s.152(1BA)) and on card network, payment gateway and money transfer fees (s.152(1E)). Tax on construction contracts, insurance premiums and foreign media advertising is a minimum tax (s.152(1B)), and so is tax on payments to a permanent establishment (s.152(2B)), except on goods sold by a company that manufactured them.
How does a tax treaty change the rate?
Where Pakistan has a tax treaty with the non-resident's country that gives a lower rate, section 107 gives the treaty effect, subject to section 109, and the payer may deduct at that rate. A payer who intends to pay without deduction must first notify the Commissioner, who has thirty days to pass an order (s.152(5), (5A)); a reduced treaty rate needs no notice. Whether a nil treaty rate is a reduced rate or a payment without deduction is not stated.
Is the rate doubled if the non-resident is not on the active taxpayers' list?
Only payments to a permanent establishment (s.152(2A)) are doubled for a recipient off the active taxpayers' list; every other section 152 deduction is outside the Tenth Schedule (rule 10(b)). The doubled amount is withholding: the filer rate is the tax, and the extra is adjustable against the tax for the year with a return filed in time (Tenth Schedule rule 4(3)). Because the permanent establishment deduction is a minimum tax, whether the minimum is the single or the doubled amount is not decided by the text.
How do I work out the tax on a net-of-tax contract?
Where a contract promises the non-resident a fixed amount free of Pakistani tax, the payer bears the tax and the gross payment is the net divided by one less the rate. The tax is then worked on that gross, so it is more than the rate applied to the net. To leave Rs 1,000,000 after 15%, the gross is Rs 1,176,471 and the tax Rs 176,471.
Can the rate be reduced by the Commissioner?
On application, the Commissioner may let a permanent establishment be paid at a reduced rate, cut by no more than 80% of the rate, only where the deduction is not a minimum tax (s.152(4A)): in practice, goods sold by a company that manufactured them. For a payment that is part of a cohesive business operation, the payer may be allowed to deduct 20% of the tax under s.152(1A) (s.152(4B)).
Sources
Where the rules come from
Read in FBR’s Ordinance amended up to 30 June 2026 (the Part III rates read from the page images) on .
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