in Foreign Exchange,
TAX ON FOREIGN EXCHANGE PROCEEDS
of Authorized Dealers is invited to F.E.
Circular No.60 of 24th June, 1992 regarding
deduction of withholding tax on foreign exchange proceeds
realized against export of goods.
We had sought certain clarification from the Central Board
of Revenue. Our queries and clarifications thereto given
by the Central Board of Revenue are appended for guidance
of the Authorized Dealers:-
Bank of Pakistans Queries
Board of Revenues clarifications
withholding tax on the amount of export proceeds
will be deducted at the time of crediting the same
to exporters' accounts irrespective of the fact
whether foreign Exchange is realized at some later
date due to negotiation/usance period involved.
Tax on export proceeds will be deducted from all
receipts on or after 1-7-1992 irrespective of the
the tax is to be deducted on gross proceeds i.e. Bill
amount or on such amount which is being credited to
exporters account after deduction on account
of (I) Discount/ agency commission paid or payable
to foreign importer/ agents, (II) Foreign Bank charges,
and (III) local bank charges (other than interest).
is to be deducted from gross proceeds.
are permitted to retain certain portion of agency
commission (not exceeding 5% of FOB value Realized)
in their Foreign Currency Accounts maintained In Pakistan
for export Promotional activities. Will the withholding
tax be deducted on such commission credited to exporters
Foreign currency accounts?
will be deducted from total proceeds and no reduction
or deduction therefrom shall be allowed.
for local supplies against international tenders qualifies
for all export incentives. Is the withholding tax
regime applicable on such receipts?
tax regime shall be applicable to payments for local
sales against International tenders.