Section 152 — Withholding on Payments to Non-Residents
Section 152 non-resident WHT Pakistan TY 2025-26 — royalties, fees for technical services, contracts, and insurance payments, with DTAA treaty rate reductions.
Section 152 applies whenever a Pakistani resident pays a non-resident for services, royalties, fees for technical services, contracts, insurance, or similar income. The default rates: services and royalties 15% (filer) / 30% (non-filer); fees for technical services 15%/30%; contracts 7%/14%; insurance/reinsurance 5%/10%. The deduction is generally final tax for the non-resident.
Double Taxation Avoidance Agreements (DTAAs) can substantially reduce these rates. Pakistan's treaties with the US, UK, Germany, Singapore, Japan, the UAE, and most major partners cap royalty WHT at 10–15% and fees for technical services at similar levels. The non-resident must file a treaty-residency certificate (Tax Residence Certificate from their home revenue authority) to claim the reduced rate.
For Pakistani payers, Section 152 is a compliance obligation: deduct at source, deposit to FBR within 7 days, and report the deduction on the Section 165 statement. A common error is treating a foreign vendor as a service provider when the contract is actually a royalty or fees-for-technical-services — the categorisation drives the rate, not the label on the invoice.
Frequently asked questions
When does Section 152 apply?
When a Pakistani resident pays a non-resident for services, royalties, technical fees, contracts, insurance, or similar income. The deduction is generally final tax for the recipient.
Can a DTAA reduce Section 152 WHT?
Yes. Pakistan's DTAAs with major partners (US, UK, EU, Singapore, UAE) cap royalty and technical-services WHT at 10-15%. The non-resident must provide a Tax Residence Certificate.
What's the rate on payment to a foreign contractor?
Section 152 contracts: 7% (filer) / 14% (non-filer). Services: 15% / 30%. The correct category depends on the contract substance, not the invoice label.
Do Pakistani residents pay Section 152?
No — Section 152 applies only to payments to non-residents. Pakistani residents fall under Sections 149 (salary), 153 (services), and other resident-specific WHT sections.