E-commerce entities to pay 0.5pc minimum tax

fbr

ISLAMABAD: Federal Board of Revenue (FBR) has explained the changes to Income Tax Ordinance, 2001 through Finance Act, 2017 and said that 0.5 percent income tax has been introduced for e-commerce entities during tax year 2018.
In Income Tax Circular No. 04 of 2017 issued on Wednesday, the Finance Act, 2017 introduced the concept of an ‘online marketplace under Section 2(38B) of the Income Tax Ordinance, 2001, which has been defined as an information technology platform run by an e-commerce entity over an electronic network that acts as a facilitator in transactions that occur between a buyer and a seller.
A person running an online marketplace shall be subject to reduced /concessionary rate of minimum tax under section 113 of the Ordinance at 0.5 percent for the Tax Year 2018.
Moreover, in terms of clause (28C) of Part II of the Second Schedule to the Ordinance inserted through the Finance Act, 2017 the rate of collection of advance tax on brokerage and commission for a person running an online marketplace shall be 5 percent which shall constitute final tax.

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