📢 Freelancers & Foreign Remittance Earners: Don't Forget Your PRCs!
As the tax year-end is approaching, it is important to start organizing your documents for filing your Income Tax Return.
Along with other supporting documents, Proceeds Realisation Certificates (PRCs) are extremely important for individuals receiving foreign remittances, including freelancers and exporters of services.
Make sure to timely obtain PRCs from your respective banks for all foreign remittances credited to your bank account from 1 July 2025 to 30 June 2026 (going to end in few days). It is advisable to collect these certificates periodically rather than waiting until the return filing season.
In my experience, obtaining PRCs several months after the actual transaction can sometimes be difficult and time-consuming, which may cause unnecessary delays and inconvenience when filing your tax return.
Stay organized, stay informed, and stay compliant.
For our services, you can contact us via below link:
tax-sahulat.com/tax-return
If you’re a freelancer exporting IT/ITeS services, compliance is not optional — it’s what protects you from future tax exposure.
Your export income should fall under final tax regime u/s 154A (0.25% / 1%) — but only if properly structured and documented.
To stay compliant and avoid potential notices from Federal Board of Revenue, ensure the following:
• Obtain a PRC (Proceeds Realization Certificate) from your bank with the correct IT/export remittance code
• Share invoices/contracts with your bank so tax is deducted at the correct final rate (0.25% where eligible)
• Receive payments strictly through banking channels and ensure conversion into PKR
• Instruct clients to clearly state: “Payment for IT/ITeS services under formal contract”
• Get registered with Pakistan Software Export Board to secure the 0.25% rate benefit
• Maintain proper books of accounts and ensure review/audit for Section 111 compliance
⚠️ Critical misconception:
Don’t confuse foreign income (service exports) with foreign remittance (family support).
The commonly cited PKR 5M “safe limit” applies to remittances — NOT to income earned from services.
Misclassification can trigger unexplained income proceedings u/s 111, leading to taxation at slab rates penalties.
Bottom line:
Paying tax is not enough — correct classification, documentation, and routing is what ensures protection.