How to get PRC (Proceed Realization Certificate) for Income Tax for Freelancers in Pakistan
To learn more about PRC and method of getting PRC can be learnt in this video https://youtu.be/w9G0BBPWIXg
If you are a freelancer living in Pakistan and withdrawing your Online freelancing income (like from Fiverr, Upwork, Freelancer, Peopleperhour, etc..) through Payoneer or any other method to your bank, you will have to get the PRC (Proceed Realization Certificate issued) to prove the Bank withdrawals as foreign income which will, then, be exempt from tax.
As per Income Tax Ordinance of Pakistan, any foreign remittance will be exempt from tax if you have PRC (Proceed Realization Certificate issued) from your bank. Every bank is responsible for issuance of PRC for any foreign remittance.
However, if you are withdrawing payments through Payoneer in Pakistan, scenario is different. Actually, Payoneer has partnership with Mobilink MicroFinance Bank in Pakistan and when you withdraw money, Payoneer sends money to MMBL which is sent to respective banks as an IBFT (Inter Bank Funds Transfer) which is taxable according to Pakistan Income Tax Law.
So, you will have to get the PRC issued by your Bank to prove that income as foreign income instead of IBFT and also to prove it as white money.
PRC issuance method is given below
- Contact your Bank with a written application for the issuance of PRC for your transactions
- Prepare an excel sheet of transactions with amount and date
- Your bank will send this request to Mobilink MicroFinance Bank for PRC
- MMBL will issue the PRC and send to your bank
- You can collect the PRC for free from your branch
- Now, declare these income as Exempt in Income Tax Return and show the PRC upon FBR Request
In case of any question regarding this matter, drop an email at email@example.com
TRS at Fiverr and Upwork