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FBR notifies 4pc advance tax on int’l air tickets

FBR notifies 4pc advance tax on int’l air tickets

ISLAMABAD: The Federal Board of Revenue (FBR) notified all the airlines to collect advance tax on air tickets for international journey originates from Pakistan.
According to the notification, the FBR directed all the airlines to collect advance tax at the rate of 4 percent on all air tickets if the journey originates from Pakistan. It read that the airlines issuing tickets to passengers, whether its head office, registered office or authorised agent exists in Pakistan or not, but the journey originates from Pakistan, should be subjected to advance tax.
It adds that where the tickets are issued by persons, other than the airlines, and the person issuing tickets on the behalf of the airlines, are charging and collecting advance tax from the passengers and making payment of tax to the airlines directly, or through any other entity authorised in that behalf, the tax so collected by the airlines from such person shall be paid.
The notification further stated that tax collected by the airlines should be paid by the 15th day of the following second month in respect of the tickets issued up to the last working day of each calendar month. It clarifies that provided for the month of May and June; the tax shall be paid on 15th of June on the basis of average tax paid in respect of July to April. Any short of excess tax paid, in respect of tickets issued during May and June, shall be adjusted in the tax required to be paid by the 15th of July.
The notification further states that every airline should make adequate arrangements for collection of the tax and in case of default, the tax shall be collected from the airlines without prejudice to any other liability, which it may incur under the ordinance.
The FBR also directed the airlines that notwithstanding anything contained in second scheduled to the Income Tax Rules 2002, monthly and annual statements of the tax collected under section 236B and 236L, shall be submitted by every airline to the respective Commissioner Inland Revenue.
It is to be noted that the government announced imposition of 4pc advance tax on the purchase of air tickets in the budget for 2014-15. The FBR had already issued a notification to implement the decision in July 2014, however, the tax department has issued an amended notification, which made some changes in previous notification.