Sales Tax Withheld at Source in FBR Digital Invoicing
Certain buyers must withhold a portion of sales tax at source. Here is how sales tax withholding works, who it affects, and how it is shown on a compliant FBR digital invoice.
What withholding at source means
Under the sales tax withholding rules, specified buyers — such as government departments and certain large entities — deduct a portion of the sales tax at the time of payment and deposit it with FBR directly.
So the supplier receives less tax in hand, because part has already been withheld and paid on their behalf.
How it appears on the invoice
The invoice must show the sales tax withheld at source as its own value, separate from the sales tax payable, so both the supplier and the withholding agent have a clear record.
This field is part of what FBR validates, so it must be represented accurately.
Why it matters
Getting withholding right affects how much you actually collect and how the transaction reconciles later. Errors here create mismatches between your records and your buyer's.
For withholding agents, an invoice that clearly states the withheld amount makes their own compliance straightforward.
Getting it right
Digi Invoice provides the field for sales tax withheld at source and validates the invoice as a whole before it is posted to FBR.
That keeps withholding transactions clean and consistent for both sides.