Written by Akhter Syed in Taxation Income Tax Rule 19 specifies how fees received by non-residents for technical services from Pakistani sources will be taxed, including allowable deductions and an option to choose taxation under Section 6. ISLAMABAD: The Federal Board of Revenue (FBR) has prescribed rules for taxing fees for technical services received by non-resident persons from Pakistan during Tax Year 2027. The FBR issued the Income Tax Rules, 2002, updated up to September 15, 2026, for Tax Year 2027, covering the period from July 1, 2026, to June 30, 2027. Under Rule 19, fees for technical services received by a non-resident from a resident person or a permanent establishment in Pakistan of another non-resident are subject to specific deductions and tax calculation procedures. Tax Treatment of Technical Services Fees According to Rule 19, the tax treatment depends on the date of the agreement under which the fee is received. For agreements made before March 8, 1980, or agreements approved by the government before that date, the gross fee will be reduced by deductions allowed under Section 40 of the Income Tax Ordinance, 2001. For agreements made on or after March 8, 1980, but before May 4, 1981, deductions under Section 40 will be permitted, subject to a maximum…