Supreme Court Rejects Payoneer Appeal in FBR Tax Case

The Supreme Court of Pakistan has dismissed the appeal filed by Payoneer against the Federal Board of Revenue (FBR), upholding a previous ruling by the Islamabad High Court. The dispute centered on FBR’s show-cause notice issued under Section 114(1) of the Income Tax Ordinance, 2001, which required Payoneer to file income tax returns for the tax years 2019 and 2020.

Payoneer, a non-resident payment gateway facilitating cross-border remittances, insisted that it had no taxable presence in Pakistan and therefore was not liable to file returns. The company maintained its stance that since its operations were limited to fund transfers under a “Home Remittance Agreement” with Mobilink Bank they did not constitute taxable activity.

However, FBR countered them with its own assertion that as a registered entity since March 2021, Payoneer was statutorily obligated to comply with Pakistani tax laws. The Court ruled in favor with FBR’s stance, stating that the show-cause notice only initiated proceedings and did not cause immediate harm. Chief Justice Yahya Afridi went on to point out that Payoneer had the opportunity to present its case during the assessment process and could also seek legal recourse if adversely affected by a final order.