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Withholding tax on online markets being imposed from Sept 1

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ISLAMABAD: The Federal Board of Revenue (FBR) has issued a notification for the imposition of withholding tax on online markets that shall be effective from September 1, 2021.
The FBR announced this decision through SRO 984(I)/2021 under the eleventh schedule to the Sales Tax Act, 1990. In the budget 2021-22, the government had proposed a withholding tax at the rate of 2 percent of the gross value of supplies made by persons other than active taxpayers.
From September 1, 2021, the online marketplaces facilitating the supply of goods owned by third-party suppliers are required to withhold sales tax at the rate of two percent of gross value of supplies made by persons other than active taxpayers.
According to the notification, the FBR is pleased to direct that the provisions of Serial # 8 of the Eleventh Schedule to the Sales Tax Act, 1990 shall be effective from September 1, 2021.
The FBR has defined the “online market place” to cover ecommerce platform, portal or similar means, which facilitate sale of goods, including third-party sale.
According to the Finance Act 2021, the “online market place” includes an electronic interface such as a market place, e-commerce platform, portal or similar means, which facilitate sale of goods, including third-party sale by controlling the terms and conditions of the sale; authorising the charge to the customers in respect of the payment for the supply; or ordering or delivering the goods. – TLTP