Pakistan removes digital tax on foreign platforms, with the Federal Board of Revenue exempting the 5% levy on digitally ordered goods and services supplied from outside Pakistan.
The decision covers major names including Temu, AliExpress, SHEIN, Google, Netflix, and Meta, and takes effect from July 1, 2025, under an FBR notification.
The waiver applies to all foreign firms, not just US companies, and follows talks aimed at advancing a Pakistan-US trade deal.
It reverses a charge introduced a month ago under the Digital Presence Proceeds Tax Act, 2025.
Pakistan removes digital tax: what changes for global platforms and local users
For consumers, the exemption should ease pressure on prices for streaming, cloud tools, and app services, while reducing surprise add-ons at checkout.
For advertisers, creators, and SMEs that pay for online ads, storage, or software, platform invoices are expected to reflect the removal of the 5%-line item on eligible cross border services from July 1 onward.
The FBR said the tax “shall not apply” to digitally ordered goods and services supplied from outside Pakistan.
That scope includes automated, internet-delivered offerings such as audio and video streaming, cloud services, online software, e-learning and tele-medicine, as well as platform based services with minimal human intervention.
Marketplaces like Temu, AliExpress, and SHEIN also fall under the decision for their qualifying cross border supplies.
Officials framed the move as part of wider trade discussions while stressing that normal rules still apply elsewhere.
Provincial sales taxes on services, customs duties on imported physical goods, and standard income tax or withholding obligations remain in place where relevant.
Businesses should confirm how the waiver interacts with contracts and any billing that straddles July 1.
Finance and tax teams in companies that rely on Google Workspace, Microsoft style cloud tools, Meta ads, or Netflix style corporate plans should review vendor communications and update cost forecasts.
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