ISLAMABAD – The Federal Board of Revenue (FBR) has introduced new tax rules for non-resident social media influencers earning income through social media platforms.
FBR Chairman Rashid Mahmood Langrial approved the new rules aimed at bringing non-resident Pakistanis and other individuals earning income through social media into the tax net.
Under the new framework, a 5% tax will be levied on income earned through social media activities by non-resident influencers.
The move forms part of the FBR’s efforts to establish a tax framework for income generated through social media platforms by individuals who are not residents of Pakistan.
FBR has also introduced a new framework for taxing income earned from remunerative social media content, including earnings generated by influencers through digital platforms.
Under the new framework, the FBR has set a benchmark of Rs195 for every 1,000 YouTube video views. This rate, known as revenue per mille (RPM), will be used to determine income under the prescribed calculation method and may be revised by the FBR from time to time.
For resident influencers, taxable income from remunerative social media content will be determined after allowing expenses of up to 30% of total revenue.
The rules provide that total remuneration will be determined using whichever is higher: the amount calculated through the prescribed view-based formula or the actual compensation received by the influencer. Compensation received either in cash or in kind will be taken into account.
Influencers who believe their actual earnings are lower than the amount calculated using the Rs195 RPM benchmark will have to provide supporting evidence to the satisfaction of the relevant tax commissioner.
The FBR has also introduced a quarterly advance tax requirement for individuals covered by the special procedure. The advance payment will be calculated according to the prescribed rules governing income and remuneration.
Social media earnings will have to be reported separately in income tax returns for each tax year. If an individual declares income below the amount determined under the prescribed procedure, the relevant tax commissioner may correct the return and recover any resulting tax liability.
The FBR issued three notifications as part of the new framework. One notification formally classified persons earning income from remunerative social media content as a sector eligible for a special taxation procedure, while another established detailed rules for resident persons.
The new rules also cover non-residents whose social media earnings qualify as Pakistan-source income and meet the specified user-related threshold.
