How to get tax exemption for freelancers in Pakistan?

How to get tax exemption for freelancers in Pakistan (1)

How to get tax exemption for freelancers in Pakistan?

Do you know that freelance services are on fire all around the Globe? Pakistan is included in the list of top countries who are rendering freelance services in the field of software development and IT related services. Freelancers are rendering IT services from Pakistan to clients around the world. In order to promote freelancers in the domain of IT sector, Government of Pakistan has offered them full income tax exemption in shape of tax credit which was earlier only available to software houses and Call Centers.

In order to protect the IT industry, the Pakistan Software Export Board (PSEB) has been established by the Government of Pakistan to regulate and promote Information and Communication Technology (ICT) sector. PSEB not only grant license to IT businesses but also regulate the affair pertaining to IT sector development, law reforms and other matters related to ICT. Moreover, the PSEB is now also registering and granting license to Freelancers that render IT related services from or in Pakistan.

What is the Tax Relief to Freelancers?

 According to recent Finance Act introduced in year 2022, Section 65F has been introduced in the Income Tax Ordinance, 2001 which offer 100% tax credit to persons rendering following IT export services:

  1. IT services pertaining to Software Export;
  2. IT services; and
  3. IT Enabled services

Requirement to get tax Relief?

For the purpose of getting 100% tax credit, every freelancer rendering IT export services is required to register with PSEB and fulfil the requirement entailed in subsection 2 of Section 65F of Income Tax Ordinance, 2001, provided herein below:

  1. File annual income tax return
  2. File monthly withholding statements, if you are withholding agent
  3. File monthly Sales Tax returns , if you are giving services in Pakistan

How to Apply for PSEB Freelancer Registration in Pakistan:

  • Access the official link of PSEB:
  • Look for REGISTRATION tab mentioned on top of the page and click on NEW REGISTRATION


If you are a new Freelancer:

  • Fill in the Signup form and generate your credentials.
  • Enter all relevant details in the fields on Registration page, attach all relevant documents as required and submit process for registration. Mke sure to provide accurate information, failing which the application is rejected by PSEB.
  • After getting initial approval, pay requisite fee for registration and attach proof before making submission.
  • Upon verification of payment by PSEB, registration certificate is issued by PSEB within 4-6 days times.


Documents Required for PSEB Registration for Freelancers:

  • Scanned copy of NTN certificate
  • Scanned color copy of CNIC
  • Bank Account Maintenance Certificate issued by Scheduled Bank of Pakistan.

Note: Bank account must be in name of the Freelancer only.


Renewal of PSEB License of Freelancers:

Freelancers license issued by PSEB is valid for 1 year only. Freelancer is required to renew license each year. Procedure for renewal of license is detailed herein below:

  • Using credential login to PSEB registration portal
  • Upload requisite documents and enter relevant data in the field and submit form
  • Upon approval of application, deposit requisite fee with PSEB and upload proof before submission.
  • Upon verification of payments and information provided, renewal is granted within 4-6 days times.

Documents Required for PSEB Renewal of Registration for Freelancers:

  • Income Tax Return for current year.
  • Form R to be issued by Bank

Note: These documents are in additions to documents required for registration.

Registration Fee for PSEB Freelancer Registration:

At present PSEB is charging PKR 5000/- on account of registration fee from freelancers akin to fee structure offered for IT businesses registered as Sole Proprietor and AOP. Whilst the renewal fee for freelancers is fixed at PKR 3500/- payable annually to PSEB.

PSEB Freelancer Registration Benefits:

Following are only some of the benefits being offered to IT related entities and Freelancers:

  • PSEB registration fee is only PKR 5,000 only for the first year, with renewal charges of Rs. 3,500 annually.
  • Free trainings, certifications, access to ICT interns for free and free of cost promotion is offered by PSEB. Day by day PSEB is introducing new programs to facilitate IT businesses.
  • In case you are registered with PSEB, 20% discount is being offered for registration of IT company with SECP.
  • PSEB also help in obtaining investment load for scaleable businesses and project related to IT sector.
  • PSEB also working with government to introduce health insurances and Life insurances for freelancers.
  • Any client from around the globe can access the performances and repute of Freelancers before conducting business.

Income tax exemptions only available to such IT related entities and Freelancers who are registered with PSEB and not otherwise