STAFF REPORT IBD: Federal Board of Revenue (FBR) is devising ways to tax internet search engine Google Inc on the revenue generated through its business in Pakistan, sources close to the tax department disclosed this.
“It is difficult to levy taxes on the Internet search engine as it has no permanent establishment,” said a tax official adding however, since revenue is being generated through local advertisements, local departments have the right to collect tax under this head. The recent discussion in the FBR on taxing the foreign company came in the limelight following the reports that Indian taxation authorities had issued notices to Google Inc for tax evasion.
The daily also reported search giants Indian arm had misled the department, under-declared its income, violated accounting rules and attempted to underreport revenues.
“The FBR head has instructed the tax departments to identify the business activities of the company in Pakistan,” said another official.