ISLAMABAD: Pakistani authorities introduced an additional tax on Netflix, instructing banks to deduct a 13 percent provincial sales tax on advertising services last year, here on Sunday.
As per the details, under the fresh guidelines, commercial banks are now levying new taxes on video-on-demand streaming services. Following the latest changes, Netflix users in Pakistan will have to pay a 3pc sales tax on the services when paying subscription fees via debit or credit card.
Additionally, there is a 5pc advance tax on international transactions for filers, while card transaction charges are set at 4pc, in addition to the federal excise duty FDE. For non-filers, the advance tax on international transactions is different, with a rate of 10 percent for non-ATL individuals.
Commercial banks will collect this additional tax on Netflix on behalf of the Sindh Revenue Board.
The development comes after the Federal Board of Revenue (FBR) issued a tax notice to Netflix to recover lakhs of rupees. The top tax authority sent a notice to Netflix directing them to pay tax of Rs 200 million on the income of the last two years.
Reports claim that Netflix earned more than one billion rupees in Pakistan in 2021 alone as the South Asian country has a large number of subscribers.
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