New Pakistan tax rules explained: What overseas creators need to know
FBR outlines how taxable social media income is calculated
DUBAI – Pakistan has introduced a new framework for taxing income earned from remunerative social media content, including certain earnings of creators based outside the country.
The Federal Board of Revenue (FBR) has notified separate procedures for resident and non-resident persons through SRO 1641(I)/2026 and SRO 1642(I)/2026.
The measures come alongside a 5% withholding tax on revenues received from social media platforms under Section 154B of the Income Tax Ordinance, 2001. For non-resident persons, the withholding tax is treated as final tax under the relevant provisions, while the newly notified procedure sets out how income from remunerative social media content is to be determined.
Who qualifies?
The non-resident procedure applies to people earning Pakistan-source income from interaction with users in Pakistan through social media platforms, provided the prescribed threshold is met. Under SRO 1642(I)/2026, the threshold is more than 50,000 users during a tax year or 12,250 users during a quarter.
The threshold relates to what the FBR describes as systemic and continuous solicitation of business activities or engagement through digital means. This means the rules are not framed as applying automatically to every overseas creator whose content happens to be accessible in Pakistan. The relevant income must also constitute Pakistan-source income under Section 101(3B)(b) of the Income Tax Ordinance.
The wider framework covers remunerative social media content, meaning content that generates remuneration in any form. The definition of a social media platform covers internet-based services designed to allow users to interact and share user-generated content, where economic value can arise from participation, network effects and monetisation of engagement or user data.
How income is calculated
The FBR has established a prescribed method for determining minimum income from remunerative social media content. The calculation starts with total remuneration and allows expenses of up to 30% of total revenue.
Total remuneration is not necessarily limited to the amount a creator says they actually received. The rules require the higher of two figures to be used: the amount generated under the prescribed revenue-per-mille formula or the actual remuneration received, whether in cash or in kind.
For YouTube videos, the prescribed revenue-per-mille, or RPM, is Rs195 for every 1,000 views. The FBR can revise this rate from time to time.
For example, the RPM formula would produce Rs195,000 for one million YouTube views. That figure is then compared with the actual remuneration received, with the higher amount forming the basis for the calculation before allowable expenses are deducted.
If a creator believes their actual remuneration was lower than the amount produced by the prescribed RPM calculation, they must provide evidence to the relevant Commissioner to establish the lower figure.
Tax and returns
The 5% social media withholding tax was introduced through the Finance Act 2026 under Section 154B. The provision requires banking and non-banking financial institutions to deduct tax when an amount representing revenue from social media platforms is credited or received in a person's account. The legislation defines digital content creators and social media influencers broadly, covering monetised content on platforms including YouTube, Facebook, Instagram and TikTok.
The newly notified procedure separately requires people covered by the special rules to pay advance income tax for each quarter under Section 147 of the Income Tax Ordinance.
The relevant social media income must also be declared in a designated section of the annual income tax return. If the income declared is lower than the amount calculated under the prescribed procedure, the relevant Commissioner may rectify the return and recover the amount due under the Ordinance.
Overseas creators
For overseas creators, the key provision is SRO 1642(I)/2026. It specifically deals with non-resident persons whose remunerative social media income qualifies as Pakistan-source income through interaction with users in the country.
The rules therefore bring a particular category of foreign-based digital earners within Pakistan's tax framework when the prescribed conditions are met. Creators based in countries such as the UAE can fall within the non-resident procedure if their Pakistan-linked activity meets the requirements set out by the FBR.
The framework also distinguishes between the calculation of income and the collection of tax. The 5% withholding tax operates under Section 154B, while SRO 1642(I)/2026 establishes the special method for determining income, allowable expenses, quarterly advance payments and annual declarations for qualifying non-residents.
The FBR has also issued SRO 1640(I)/2026 alongside the resident and non-resident procedures, completing the notified framework for persons earning income from remunerative social media content.