Selling on Amazon from Pakistan: the tax position
Cross-border marketplace selling is the area of Pakistani tax where confident online advice is most often wrong, because the answer depends on facts most guides never ask about — where the inventory sits, where the customer is, and who pays you.
Why section 6A generally does not apply
The e-commerce regime under section 6A addresses payments for the supply of digitally ordered goods or services delivered from within Pakistan using locally operated online platforms, including marketplaces and websites. Two elements of that description do the work:
- Locally operated platform. A foreign marketplace is not one.
- Delivered from within Pakistan. Goods shipped from Pakistan to an overseas customer are not being delivered to a Pakistani buyer.
So a Pakistani seller on a foreign marketplace is generally dealing with export rules rather than with the domestic e-commerce regime. If you also sell domestically through a Pakistani platform, that stream is within section 6A and needs separating — see e-commerce and section 6A.
Your model determines everything
| Model | Key questions |
|---|---|
| Goods sourced and shipped from Pakistan to foreign customers | Export of goods; export withholding treatment; zero-rating for sales tax; realisation of proceeds |
| Amazon FBA with inventory held abroad | Did goods export from Pakistan? What is the character of the income? Are there obligations where the stock sits? |
| Drop-shipping from a foreign supplier to a foreign customer | Nothing leaves Pakistan. Is this business income with a Pakistani connection rather than an export? |
| Digital products or services sold to foreign buyers | Potentially the IT and ITeS export regime, subject to the classification test |
| Domestic sales through a Pakistani marketplace | Section 6A applies |
You live and work outside Pakistan, you still hold property, bank accounts or rental income here, and nobody has ever told you in writing what your status actually is.
If goods genuinely export from Pakistan
This is the cleanest model and the rules are established:
- Income tax. Export proceeds fall under the export withholding regime — the section 154 rate moved to 1.25% operating as minimum tax, with the separate 1% advance tax abolished by the Finance Act 2026.
- Sales tax. Export of goods is generally zero-rated, so input tax on Pakistani-sourced inputs remains recoverable and a refund mechanism exists. That makes registration worth modelling rather than avoiding — zero-rated versus exempt.
- Documentation. Export documents for each shipment, plus realisation of proceeds through banking channels.
- Customs. Export declarations and any regulatory requirements for the goods concerned.
The settlement reconciliation
Marketplace accounting is where sellers lose control, because the money that arrives bears no resemblance to the sales made. Build this monthly:
- Gross sales per the settlement report.
- Less platform commission and referral fees.
- Less fulfilment and storage charges where applicable.
- Less advertising spend deducted at source by the platform.
- Less refunds and chargebacks.
- Equals the net remittance, which should tie to your bank credit.
Note that platform fees deducted before remittance are still your expenses — they are deductible, but only if you can evidence them from the settlement report. Sellers who record only the net credit as revenue understate both turnover and expenses, which distorts the whole computation.
The obligations that are not Pakistani
Cross-border selling can create duties in the country where you sell or store goods, entirely separately from Pakistani tax:
- Sales tax or VAT registration in the destination market, where thresholds are met or where marketplace facilitator rules apply.
- Customs and import duties payable on entry, usually borne by whoever is importer of record — which may be you.
- Income tax exposure where inventory held in a jurisdiction creates a taxable presence there.
- Marketplace withholding applied by the platform under local rules before remitting to you.
What to keep
- Monthly settlement reports, downloaded before historical access lapses.
- Bank credit advice for every remittance, with the exchange rate applied.
- Supplier invoices for inventory, and shipping and customs documents where goods export.
- The monthly settlement reconciliation.
- Inventory records, including stock held abroad at the year end.
- Platform account balance at 30 June.
Declare the inventory, the platform balance and the bank balances in your wealth statement with funding traced. Cross-border sellers frequently hold substantial value offshore and omit it, which creates an unexplained position the moment funds are repatriated — wealth statement.
Sources
This guide is written against the official and clearly labelled professional references below. Rates, thresholds and portal procedures change between reviews, so open the primary source before relying on a figure.
- Income Tax Basics (FBR)
- Finance Act 2026 (FBR)
- Overseas Pakistanis tax guidance (FBR)
- Sales Tax Act 1990, amended through 30 June 2026 (FBR)
Questions people also ask
Does the section 6A e-commerce tax apply to my Amazon sales?
Generally no, because that regime addresses digitally ordered goods and services delivered from within Pakistan through locally operated online platforms. A foreign marketplace is not a locally operated platform, and goods shipped to overseas customers are not delivered from within Pakistan to a Pakistani buyer. You are dealing with export rules instead — but confirm the position for your specific model.
I sell through Amazon FBA with stock held in the United States. What is my position?
This is the model most in need of specific advice. Inventory held abroad, sold to foreign customers, with proceeds paid by a foreign platform raises questions about the character of the income, whether an export of goods from Pakistan occurred at all, and potentially about tax obligations in the country where the stock sits. Do not assume the Pakistani export regime applies to a model where nothing leaves Pakistan.
Do I need a sales tax registration to export goods?
Export of goods is generally zero-rated rather than exempt, which is why exporters can sit in a persistent input tax credit position and why a refund mechanism exists for them. Whether registration is required or worthwhile depends on your model and your input tax position. A seller sourcing goods in Pakistan with input tax to recover is in a different position from one drop-shipping from abroad.
How do I evidence my sales if Amazon does not issue invoices to me?
Through the settlement reports the platform provides, reconciled to the bank credits. Download them monthly, because access to historical reports is not permanent. Then reconcile: gross sales, platform fees, refunds, advertising costs, and the net figure actually remitted. That reconciliation is the document a reviewer will ask for.
Does my Amazon account balance need declaring?
A balance you own at the tax year end is an asset in economic terms and belongs in your wealth position, as does any inventory held abroad. Sellers routinely omit both because they are offshore and not obviously visible, which creates an unexplained position later when funds are withdrawn and spent.
Send the tax year and the transaction or filing involved, and we will tell you what is actually required.
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