(1) The income of a non-resident person by way of fee for technical services received from a resident person or a permanent establishment in Pakistan of a non-resident person shall be-
(a) in the case of fee received in pursuance of an agreement made before the 8th day of March, 1980, or an agreement made on or after the said date the proposal in respect of which was approved by the Government before the said date only in such cases, the gross amount of the fee less the deductions allowed under section40;
(b) in the case of fee received in pursuance of an agreement made on or after 8th day of March, 1980 but before the 4th day of May, 1981, the gross amount of the fee less the deductions allowed under section 40 with a maximum total deduction equal to twenty percent of the gross amount of such fee; or
(c) in any other case to which sub-section (2) of Section 6 of the Income Tax Ordinance, 2001 does not apply, the gross amount of fee for technical services less the following perquisites:-
(i) any expenditure incurred in Pakistan to earn such [fee for technical services], wherever paid.
(ii) any expenditure incurred outside Pakistan in pursuance of such agreement not exceeding ten percent of gross amount of [fee for technical services.
Provided that a non-resident may opt for taxation under section 6 of Income Tax Ordinance, 2001, by filing a written declaration option within 15 days of the commencement of contract. Such option shall remain operative till completion of the said contract.
(d) [clause] (c) would not apply where the fee for technical service is covered by the provisions of section169.
