The Federal Board of Revenue (FBR) has served a notice to Netflix for recovery of over Rs. 200 million in income tax, official sources told ProPakistani.
Netflix is a streaming service that offers a wide variety of award-winning TV shows, movies, anime, documentaries, and more on thousands of internet-connected devices.
According to the details, Netflix has given different plans ranging from Rs. 250 to Rs. 1,100 a month to its viewers, and viewers living in Pakistan also got Netflix subscriptions.
Sources told Propakistani that Additional Commissioner CTO Islamabad has generated a demand of over Rs. 200 million in two different years as per section 6 of ITO, 2001.
The company has declared Rs. 1.3 billion in revenue during the tax year 2021 alone just in Pakistan, sources added.
Sources said that Netflix and some other companies are providing offshore digital services without having their offices in Pakistan.
The FBR had served notice to the Netflix Singapore office whereas it also established an office in the Netherlands earlier, sources added.
It has also emerged that companies rendering offshore digital services are hiding behind Double Taxation Agreements (DTA) to allegedly evade the tax.
It is pertinent to note that DTA is a contract signed by two countries to avoid or alleviate (minimize) territorial double taxation of the same income by the two countries
It merits mention here that the government of Pakistan had introduced section 6 in the Income Tax Ordinance 2001 to bring every non-resident person who receives any Pakistan-source royalty fee for offshore digital services or fee for technical services.
The Sindh Revenue Board was already taxing non-residents for offshore services but now FBR has also been imposing income tax against the non-resident persons.
Sources said that the Company through its tax consultant also challenged the assessment orders before the Commissioner Appeal FBR however the Commissioner Appeal has given a decision in favor of FBR.
The post Netflix Ordered to Pay Rs. 200 Million Income Tax by FBR appeared first on ProPakistani.
