[World Tax News] Digital Presence Tax in Pakistan | DAC8 in Slovakia & More

Editorial Team – [2025] 175 taxmann.com 471 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:

1. Pakistan introduces Digital Presence Tax in federal budget

On June 10, 2025, the Pakistani Ministry of Finance unveiled its Federal Budget for the fiscal year 2025-2026, which includes a significant new tax measure: the Digital Presence Proceeds Tax Act, 2025. This act imposes a 5% tax on the revenue earned by foreign e-commerce providers.

Financial institutions, including banks, licensed exchange companies, and other payment service providers, will be responsible for withholding this 5% tax when processing payments to foreign entities for goods and services. Additionally, new regulations will mandate e-commerce platforms to collect and remit an 18% sales tax.

The budget also outlines several other tax adjustments:

(a) Income Tax Brackets for Salaried Individuals: The tax rates for the second, third, and fourth income tax brackets will be reduced from 5%, 15%, and 15% to 1%, 11%, and 23%, respectively.

(b) Surcharge on High Individual Income: The 10% surcharge on individual taxable income exceeding PKR 10 million will be lowered to 9%.

(c) Interest Income Tax: The tax rate on interest income will increase from 15% to 20%.

(d) Construction Sector Withholding Tax: Withholding tax rates for the construction sector will be reduced:

○ For tax filers: from 2.0% to 1.5%

○ For non-filers: from 3.5% to 2.5%

○ For certain other categories: from 4.0% to 3.0%

Source – Budget Documents

2. Slovakia’s parliament passes DAC8 Crypto-Asset reporting law

On June 10, 2025, Slovakia’s Parliament officially approved legislation to enact the Council Directive (EU) 2023/2226 (DAC8). This new law introduces reporting and due diligence requirements for crypto-asset service providers.

DAC8, which the European Council approved in October 2023, largely aligns with the OECD’s Crypto-Asset Reporting Framework (CARF) and the revised Common Reporting Standard (CRS) for the automatic exchange of financial account information for tax purposes.

Most of these new obligations will take effect on January 1, 2026, with the first reports on crypto-asset transactions from service providers due in January 2027. However, certain specific provisions within the bill will not be implemented until January 1, 2028, or January 1, 2030.

Source – Draft bill

3. Italy offers tax credit for hiring researchers

Italy has enacted Law No. 79 of June 5, 2025, published in its Official Gazette. This law converts Decree-Law No. 45 of April 7, 2025, into binding legislation, with some revisions.

The new law contains several provisions primarily aimed at implementing Italy’s National Recovery and Resilience Plan, addressing education, technical institutes, teachers, and school infrastructure.

Notably, it introduces a EUR 10,000 tax credit for eligible companies that hire researchers. To qualify, the hired researchers must hold a PhD or be employed under a research contract. This credit applies to permanent hires made between July 1, 2025, and December 31, 2026.

Source – Law no. 79

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