The Central Board of Revenue (CBR) of Pakistan has delivered an advance ruling (Advance Ruling No. 6 by CBR) dated 4 July 2007 in the case of a foreign communication services provider working with a Pakistani company. The question raised was whether the income of Telcordia (i.e. the foreign investor) from Pakistan MNP Database (Guarantee) Limited (i.e. the Pakistani company) was liable to withholding tax at 6%, and whether such withholding tax was the final tax liability under the provisions of the income tax law.

The CBR in its ruling referred to the Income Tax Ordinance 2001 and the Finance Act 2006, and held that payments received on account of execution of a contract or sub-contract under a construction assembly or installation project in Pakistan, including a contract for the supply of supervisory activities in relation to the such project or any other contract for construction or services rendered relating thereto, shall be liable to withholding tax of 6% as provided in the Income Tax Ordinance 2001, and this shall be the final tax on the income of the non-resident person.