ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a special tax regime for income earned from remunerative social media content, covering resident persons and certain non-residents deriving Pakistan-source income through digital platforms.
The FBR has issued three Statutory Regulatory Orders (SROs) to establish the new framework under Section 99C of the Income Tax Ordinance, 2001.
The regime sets out specific procedures for calculating, declaring and paying tax on income generated through remunerative social media content.
Special Tax Regime for Resident Social Media Earners
Under SRO 1641(I)/2026, the FBR has inserted a new Chapter-IIA into the Income Tax Rules, 2002, titled “Special Procedure for Taxation of Persons Earning Income from Remunerative Social Media Content”.
The rules apply to resident persons earning income from remunerative social media content, including those deriving income through interaction with users in Pakistan via social media platforms.
For tax purposes, minimum income from remunerative social media content will be calculated by deducting allowable expenses from total remuneration received. However, the rules cap allowable expenses at 30% of total revenue.
The total remuneration will be taken as the higher of two amounts: the prescribed revenue-per-mille calculation based on views or the actual remuneration received from social media content, whether in cash or in kind.
For YouTube videos, the prescribed revenue-per-mille rate is PKR 195 per 1,000 views, subject to revision from time to time.
Where a person considers the actual remuneration to be lower than the amount calculated using the prescribed threshold, evidence must be provided to the satisfaction of the Commissioner.
Advance Tax and Income Declaration
Persons covered by the special procedure will be required to pay advance income tax for one quarter, calculated according to the prescribed rules in accordance with Section 147 of the Income Tax Ordinance, 2001.
The relevant income must also be declared in a dedicated section of the income tax return for each tax year.
If the declared amount is lower than the amount calculated under the special procedure, the relevant Commissioner may rectify the omission or error and recover the outstanding amount under the Income Tax Ordinance.
The FBR has also clarified that provisions of the Income Tax Ordinance that are not specifically addressed by the new rules will continue to apply to persons earning income from remunerative social media content.
FBR Defines Social Media Income
The new rules define a social media platform as an internet-based service primarily designed to enable users to interact and share user-generated content, where economic value arises from user participation, network effects and the monetisation of user engagement or data.
Social media content covers digital information, communication or creative material generated or published by users, where its value arises from engagement, audience reach or platform-facilitated dissemination.
This includes content capable of generating advertising, sponsorship or other forms of monetisation.
The rules define remunerative social media content as social media content that derives remuneration in any form.
Rules Extend to Certain Non-Residents
Through SRO 1642(I)/2026, the FBR has introduced a separate chapter covering non-resident persons earning income from remunerative social media content.
The provisions apply to non-residents deriving income through interaction with users in Pakistan where the income constitutes Pakistan-source income under Section 101(3B)(b) of the Income Tax Ordinance, subject to the prescribed threshold.
For this purpose, the rules establish a threshold for systemic and continuous solicitation of business activities or digital interaction.
A person exceeds the threshold where the number of users is more than 50,000 during a tax year or 12,250 during a quarter.
30% Expense Limit Applies to Non-Residents
The non-resident regime also establishes a procedure for calculating minimum income from remunerative social media content.
Allowable expenses are subject to the same maximum limit of 30% of total revenue.
Total remuneration is determined with reference to the prescribed calculation and actual remuneration received, including amounts received in cash or in kind.
Non-resident persons covered by the special procedure must pay advance income tax for one quarter under Section 147.
They must also declare the relevant income in a designated section of their income tax return.
Where declared income is below the amount calculated under the prescribed rules, the relevant Commissioner may rectify the return and recover the amount due under the Income Tax Ordinance.
YouTube Revenue Rate Set at PKR 195 per 1,000 Views
The FBR has applied the same definitions of social media platform, social media content and remunerative social media content to the non-resident procedure.
The prescribed YouTube revenue-per-mille rate is PKR 195 per 1,000 views, although the rate may be revised by the FBR from time to time.
The new framework brings covered remunerative social media activity within a dedicated tax procedure, establishing prescribed rules for determining income, allowable expenses, advance tax payments and annual declarations for eligible resident and non-resident persons.
