Software and IT export from Pakistan: PSEB, tax and remittances

When a foreign client pays you for software or IT services, your bank deducts income tax before you see the money: 0.25% if you are registered with PSEB (Pakistan Software Export Board), 1% if you are not. As of October 2026, SBP (State Bank of Pakistan) lets you keep 50% of the proceeds or $5,000 a month, whichever is higher, in a dollar account. The rest reaches you in rupees.

Who counts as an IT exporter in Pakistan?

The Income Tax Ordinance defines two groups. IT services include software development, software maintenance, system integration, web design, web development, web hosting and network design.

IT-enabled services include call centres, medical transcription, remote monitoring, graphic design, accounting, HR services, telemedicine, data entry, cloud computing, data storage, locally produced TV programmes and insurance claims processing.

Both lists say “include but not limited to”, so similar services can count. A software house, an IT company and an individual freelancer selling these services abroad are all exporters for tax and banking purposes.

How does a foreign payment reach you in rupees?

SBP set the one working day limit for processing inward export receipts in April 2026. If the money first lands at a different bank, that bank has one working day to pass it on and yours has one more to credit it. The same one-day limit applies to payments you send abroad from your dollar account.

What is the tax on software export in Pakistan?

Section 154A of the Income Tax Ordinance makes your bank deduct tax at the moment it realises the foreign exchange. FBR’s rate card for tax year 2027 sets two rates:

This deduction becomes your final tax on that income only if you meet the conditions in section 154A(2). The first one is that you file your income tax return. So you still need to be on the return-filing side: see how to become a filer.

For slabs, the final-tax option and worked examples, read freelancer tax in Pakistan.

Should you register with PSEB?

The tax gap is the main reason. On $1,000 of exports, PSEB registration saves $7.50 in tax. PSEB’s yearly fee for a freelancer is covered in PSEB registration, along with documents and steps.

PSEB also says registered startups get a 100% tax credit for 3 years, covering minimum, alternate corporate and final taxes.

How much of your export income can you keep in dollars?

SBP’s Foreign Exchange Manual (Chapter 12, para 12), as revised by EPD Circular Letter No. 06 of 6 April 2026:

The $5,000 floor used to apply only to freelancers. SBP’s October 2023 rules gave companies a flat 50%. The April 2026 text applies the same rule to both. Banks must also issue a debit card on the ESFCA if you ask for one.

For freelancers, the ESFCA is opened together with the main rupee account, online or at a branch. We compare the ways to get paid in freelancer payment methods in Pakistan.

What paperwork does your bank need?

SBP simplified this in April 2026:

• One-time declaration. You tell your bank the nature of the services you sell abroad when you open the account. Existing customers do it when the bank asks.
• Purpose code. The bank tags your account with the right service and purpose code. If you sell more than one kind of service, tell the bank when a payment is for something other than the tagged service.
• No Form R on export receipts. The revised rules say IT companies and freelancers no longer submit Form R for their export receipts. For other kinds of receipts, SBP raised the Form R threshold to above $25,000 (EPD Circular Letter No. 07 of 2026).
• Paying for services abroad from the ESFCA needs your request and the agreement or invoice. If you pay through a digital channel, the bank collects the documents afterwards, within three working days.

More guides: E-commerce & IT Export, Tax & Registration, how to get an NTN.