ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a special procedure for calculating income tax on earnings from remunerative social media content by adding a new chapter to the Income Tax Rules.
Under the new rules, expenses claimed against social media income will be capped at 30 per cent of total revenue. Taxable income will be calculated after deducting eligible expenses from the total remuneration received.
The procedure applies to resident individuals earning income through remunerative social media content. The total remuneration will be determined using the higher of income calculated on the basis of revenue per thousand views and the actual remuneration received, whether in cash or in kind.
The rules also require eligible taxpayers to pay advance income tax on a quarterly basis. Social media earnings will have to be declared separately in the income tax return.
If a taxpayer declares income below the amount calculated under the prescribed procedure, the relevant commissioner may rectify the return and recover the tax due, according to the rules.
The new procedure covers income generated through social media platforms, social media content and remunerative content, including earnings derived from user engagement and monetisation.
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