In short
- Foreign earnings brought in through a bank can qualify for a reduced final tax rate.
- The 0.25% rate for IT exports applies to those registered with PSEB, and runs to Tax Year 2029.
- Keep your bank's proceeds certificates. They are your proof that income came from abroad.
Setting up properly
- Get an NTN and register with the Pakistan Software Export Board (PSEB).
- Receive payments into a Pakistani bank account in your own name, not a friend's or relative's.
- Ask your bank for proceeds realisation or encashment certificates for each receipt.
Local clients are different
- Work for clients inside Pakistan is taxed at normal rates, not the export rate.
- Provincial sales tax on services may also apply to local IT work.
Example
Bilal earns USD 2,000 a month on freelance platforms
He is registered with PSEB and receives payments into his own bank account. The bank deducts the reduced export rate at source, and he files a return showing this income and the tax already deducted.
Common mistakes we fix
- Receiving money through other people's accounts, which breaks the proof trail.
- Not registering with PSEB and paying a higher rate than necessary.
- Not filing a return because the bank has already deducted tax.
Do I need a company to get the reduced rate?
No. Individual freelancers can register with PSEB too. A company may still make sense as you grow, and we can compare the options for you.
I'm paid through Payoneer or a similar service. Does that count?
Funds withdrawn to a Pakistani bank account through proper banking channels generally count. Keep the bank's certificates as proof.
General guidance for Tax Year 2027, not advice on your specific case. Rules change with each Finance Act, so please speak to us before acting on it.