The Federal Board of Revenue of Pakistan (FBR) want Netflix to pay Rs. 200 million in taxes. Netflix shows movies and TV on the internet.
Netflix charges Rs. 250 to Rs. 1,100 a month in Pakistan. A tax person in Islamabad wants Rs. 200 million from Netflix.
Netflix made Rs. 1.3 billion last year. Netflix doesn’t have offices in Pakistan. The tax people talked to Netflix’s office in Singapore. They also have an office in the Netherlands.
Companies like Netflix use rules to avoid taxes. The government wants to tax companies from other countries.
Some other place in Pakistan was already taxing these companies. Netflix tried to fight the tax but lost.
Sources have also disclosed that Netflix declared revenue of Rs. 1.3 billion during the tax year 2021 in Pakistan alone.
Netflix and some other companies give digital services from outside Pakistan without offices here. FBR sent notices to Netflix in Singapore and they had an office in the Netherlands before.
Companies doing digital services offshore use Double Taxation Agreements (DTA) to avoid taxes.
DTAs are agreements signed by two countries so that people don’t have to pay taxes on the same money twice.
The Pakistani government made section 6 in 2001 to tax people who aren’t from Pakistan. They pay taxes on money they make from digital services and technical work.
The Sindh Revenue Board was already taxing people from other countries for online work. Now the FBR is also taking taxes from these people.
Sources say Netflix tried to argue the tax bills, but the FBR said they have to pay.
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