Tax Google as wanted by FBR


As reported The News citing unnamed sources, ways to tax internet giant Google are being seek, by the Federal Board of Revenue (FBR), which is the authority responsible for taxing business and individuals in Pakistan, on the revenue generated through its business in Pakistan.

FBR want Tax Google

FBR want Tax Google

After learning that for evading taxes and misleading Indian authorities by under reporting its revenues, the Indian tax authorities has slapped Google with a fine of 760 millions Indian rupees or USD 13.8 million, it is said that FBR got the hint of taxing Google.

In order to bring Google under the tax, by identifying the business activities of Google in Pakistan, the chairman of FBR, after getting the news from India, reportedly instructed the tax departments. As of now atleast, FBR is clueless on how to tax Google, from what we have heard.

In respective of courtiers, where payments are made for doing business with Google by the advertisers, the tax on advertising revenues is deducted, as it had said, when we last checked with Google. For example If someone buys Google ads from USA, then the Google is not liable to pay tax to Pakistani authorities, as in his/her country, the advertiser is already taxed.

The local ad buying (from Pakistan) could be taxed, as agreed by the Google, but the purchase doesn’t come on radar as usually it is done through credit card.

At the time of purchase, to deduct tax for all media buying with in Pakistan, Google can be confined (by Pakistani Authorities), as opine by the experts. At the time of issuance of Payments to Pakistani publishers, all Adsense payments can be taxed is the same way. In USA and European countries, at the time of transaction, this process of deducting tax from publishers and advertisers is in practice.

Under the head of income tax, the revenues made through ad clicks, which are generated from Pakistan are tax-able or not, it is still unclear and disputed. In its native country, on gross income, it is believed that Google pay taxes and hence it will impact its tax rate returned in USA, if there is anything to be taxed in Pakistan or other countries, seemingly which is hard to achieve.

From Pakistani advertisers Rs. 320 million were spent in online media, during the last fiscal year, and in which 35 per cent is shared by Google, as according to the media reports.

Taxing Google is extremely hard but still very much possible, as said by the experts. To tax a company like Google, the tax authorities of Pakistan, as according to the experts, will have to be vigilant and will have to come out of the box.


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