Punjab Revenue Authority released notices to Google and Facebook, to register them with PRA under Punjab Sales Tax on services Act, 2012. PRA Issues Notices to Facebook & Google for Tax Payment.
Both Facebook and Google said that they do not fall under the criteria of this act. The reason they gave was that they don’t PRA Issues Notices to Facebook & Google for Tax Payment have any office or employees in Pakistan.
PRA Issues Notices to Facebook & Google for Tax Payment
Still Punjab Revenue Authority said that both companies were taxable under sales tax in services Act, 2012 as they have witnessed economic activity in Pakistan through Virtual presence. This virtual presence is evident from website and web portal.
Spokesperson of PRA revealed that notices are served to the head offices of both companies operational in US and Singapore. He also told that PRA was facing this challenge from potential tax clients.
PRA can also urge these companies in tax net by suspending their services in the jurisdiction
Catering the demand of both companies that they do not fall in the category of tax, government gave new definition of jurisdiction to bring all service providers under the tax net. Under the new definition, the scope of the expression ‘place of business’ is proposed to be broadened to include persons carrying out economic activity in Punjab through virtual presence, website, web portal, any other form of E-commerce or through liaison offices.
He also told that one company has challenged the PRA authority to tax it while other has registered with PRA but has not payed a single penny of tax.
PRA can also urge these companies in tax net by suspending their services in the jurisdiction of the province in case of non compliance of orders.