Entertainment businesses in Pakistan deal with income tax, provincial sales tax on services and, for some events, provincial duties. Income is often irregular and project based, and many payments go to freelancers or to performers from abroad.
The points where tax and accounting rules come into play are numbered.
Numbered points are explained below.
At: Develop
Where a project takes place can decide which province you owe sales tax to, even if your business is based elsewhere. Services such as advertising, event management and production are taxable under provincial law, and the authority depends on where the service is provided.
We check each project against the provincial schedules before you invoice.
At: Produce
A missed deduction on a payment to a performer from abroad is a problem for the business that paid, not only for the performer. Paying a non-resident for a performance or service in Pakistan generally requires tax to be deducted under section 152, and the rate and any treaty relief depend on the country and the nature of the payment.
We look at the contract and the performer’s country before payment.
At: Post-production
With many freelancers and income arriving in stages, it is easy to miss a deduction or put income in the wrong year. Withholding must be applied on payments made, and income recognised against the right project and tax year.
We keep project-level records so each payment and receipt is accounted for in the right place.
Payments to non-residents generally carry withholding under section 152, and a treaty may change it. We look at the contract and the performer’s country before payment.
Some provinces levy duties on entertainment in addition to sales tax on services. We check the law in the province where the event takes place.