CIRCULAR NO. 09 OF 2004

(Income Tax)

Subject: WITHHOLDING TAX ON PAYMENTS MADE TO NON-RESIDENTS ON ACCOUNT OF ADVERTISEMENTS

An amendment has been made through Finance Act, 2004 by adding clause (e) in sub-section (3) of section 153 of the Income Tax Ordinance, 2001 whereby tax shall be deducted from the gross amount payable or paid under a contract for advertising services rendered by T.V. Satellite Channels. A corresponding amendment in Division III of Part III of First Schedule to the Income Tax Ordinance, 2001 has been made providing for deduction of tax in the case of advertisement services at the rate of 5% of the gross amount payable.

2. The tax would be deducted by the concerned advertising agents on gross payments made to T.V. Satellite Channels.

Muhammad Ashfaq Ahmed

Secretary (WHT)