Pakistani authorities have introduced new taxes on Netflix, directing banks to deduct a 13 percent provincial sales tax on advertisement services last year.

Commercial banks are now applying additional taxes to video-on-demand streaming services. Netflix subscribers in Pakistan will pay a 3% Sales Tax on Services when using debit or credit cards for subscription fees.

Read more: Netflix Ordered to Pay Rs. 200 Million Tax By FBR

Additionally, there is a 5% Advance Tax on International Transactions for filers, with Card Transaction Charges set at 4%, excluding Federal Excise Duty (FED). Non-filers face a 10% advance tax on international transactions.

Commercial banks will collect these additional taxes on Netflix on behalf of the Sindh Revenue Board.

This development follows the Federal Board of Revenue (FBR) issuing a tax notice to Netflix to recover millions of rupees. The tax authority directed Netflix to pay Rs200 million in tax on income for the past two years.

Reports indicate that Netflix earned over Rs1 billion in Pakistan in 2021, highlighting its large subscriber base in the country.