WHT on Payments to Non-Residents Calculator

The Pakistani payer. If you pay a non-resident for royalties, technical services, a contract, insurance or most other things, you are required to deduct tax at source and deposit it — the obligation sits with you, not the recipient. Failing to withhold makes you liable for the tax yourself, plus default surcharge and penalty.

Pakistan has double taxation treaties with many countries, and where one applies it can reduce the withholding rate — sometimes to a fraction of the domestic rate, occasionally to nil. The treaty rate depends on the country and the specific article covering that type of income, so enter the rate from the actual treaty rather than assuming a standard figure.

Normally a valid tax residency certificate from the recipient's tax authority for the relevant period, and often a declaration of beneficial ownership. Without documentation, the domestic rate is the safe position — applying a treaty rate you cannot evidence leaves the shortfall recoverable from you.

Many contracts promise the non-resident a fixed net amount "free of Pakistani taxes". In that case the tax is your cost, and the gross has to be worked back from the net by dividing by (1 − rate) — not by simply adding the rate to the net. The gross-up mode does that.

The rates shown are indicative domestic figures for common payment types. They are amended by Finance Acts, several categories carry conditions or reduced rates, and treaty rates vary per country. Confirm the rate for your specific payment and recipient before deducting.

It depends on the payment type and whether the non-resident has a permanent establishment in Pakistan — for some payments the deduction is a final tax, for others it is adjustable against an assessed liability. If the recipient has a PE here, the treatment changes substantially. Take advice for anything material.