Jurisdiction overviewTax in Pakistan
Last reviewed: · by TaxProsRated editorial
Key points
Pakistan's Federal Board of Revenue (FBR) administers personal income tax at progressive 0-35 percent across six brackets for salaried persons (with separate higher schedule for non-salaried), corporate income tax at 29 percent for most companies (super tax adding up to 10 percent for high-income years 2022-2024), and Sales Tax on goods at 18 percent (raised from 17 percent in Finance Act 2024). Provincial sales taxes on services apply separately at varying rates.
Who is the tax authority?
The Federal Board of Revenue (FBR), under the Revenue Division of the Ministry of Finance, is Pakistan's federal tax authority for income tax, federal excise duty, and federal Sales Tax on goods. Provincial revenue authorities administer sales tax on services separately: Sindh Revenue Board (SRB), Punjab Revenue Authority (PRA), Khyber Pakhtunkhwa Revenue Authority (KPRA), Balochistan Revenue Authority (BRA), and the Islamabad Capital Territory Revenue Department. Customs runs through FBR's Customs Wing via Pakistan Customs (Model Customs Collectorates).
Filings flow through IRIS (iris.fbr.gov.pk) for income tax, the e-FBR portal for Sales Tax, and WeBOC for customs declarations. Tax disputes proceed through the Inland Revenue Appellate Tribunal (IRAT) for income tax and the Customs Appellate Tribunal for customs, with further appeal to High Court and Supreme Court on questions of law.
The principal credentialed profession is CA Pakistan (Chartered Accountant), regulated by the Institute of Chartered Accountants of Pakistan (ICAP). The Institute of Cost and Management Accountants of Pakistan (ICMAP) regulates ACMAs. The Pakistan Tax Bar Association represents legal practitioners in tax-controversy work. The substantive legal framework rests on the Income Tax Ordinance 2001 (amended annually by Finance Acts), the Sales Tax Act 1990, Federal Excise Act 2005, Customs Act 1969, and the provincial sales-tax-on-services acts.
Tax year and filing deadlines
The individual tax year runs 1 July to 30 June (the Pakistani fiscal year). Personal income tax returns (Form 114) are due 30 September of the year following the tax year. Corporate annual returns are due 31 December for special-tax-year filers (July-June year-end) or 30 September for special-fiscal-year filers. Sales tax returns are filed monthly by the 15th of the following month, with payment by the 18th. Wealth Statement (Form 116) is mandatory for individuals above a prescribed income threshold.
Quarterly advance tax installments under Section 147 of the Income Tax Ordinance are due 25 September, 25 December, 25 March, and 15 June for individuals and corporates above prescribed income thresholds. Pakistan Single Window has been operational since 2022 for trade-related compliance, integrating customs, FBR, and other regulatory agencies.
Who counts as a Pakistani tax resident?
Under Section 82 of the Income Tax Ordinance 2001, an individual is tax resident in Pakistan in a tax year if any of three tests applies:
- 183-day test: physically present in Pakistan for 183 days or more in the tax year (1 July to 30 June)
- 4-year/120-day test (Finance Act 2019 reform): physically present 120 days or more in the tax year AND 365 days or more in the four years preceding
- Government/company test: a Pakistani national not resident elsewhere who is in service of the federal or provincial government or a Pakistani company
Residents are taxed on worldwide income. Non-residents are taxed on Pakistan-source income only at flat or schedular rates. Treaty tie-breakers under the OECD Model framework apply for dual-residents. The 4-year/120-day rule was introduced to catch frequent-business-traveller Pakistani nationals who would not be resident under the single-year 183-day test alone — careful day-counting across the current year and four preceding years is essential for cross-border professionals.
Personal income tax rates
Pakistan uses separate rate schedules for salaried persons and non-salaried individuals (associations of persons). The Finance Act 2024 raised rates across the board.
| Income (PKR annual) | Salaried rate |
|---|---|
| 0 to 600,000 | 0% |
| 600,001 to 1,200,000 | 2.5% |
| 1,200,001 to 2,400,000 | 12.5% |
| 2,400,001 to 3,600,000 | 20% |
| 3,600,001 to 6,000,000 | 25% |
| 6,000,001 to 12,000,000 | 32.5% |
| Above 12,000,000 | 35% |
A 10 percent surcharge applies on income tax payable for high-income non-salaried individuals above PKR 10 million under Finance Act 2024 amendments. Investment income faces flat withholding — 15 percent on dividends from public companies, 15 percent on bank deposits typically (final tax for Active Taxpayer List filers; elevated rates for non-ATL filers). Capital gains on securities are tiered by holding period under Section 37A: under one year, rates reach up to 15 percent. Real-property capital gains under Section 37(1A) step down from 15 percent at one year to zero at six years of holding for residential property.
Corporate income tax
Pakistan's corporate rate structure creates a multi-tier landscape depending on company type and size.
CIT for most companies on net taxable income. Includes manufacturing, services, tech, retail, and non-banking financial. 6-year loss carryforward; no carryback.
Banking company rate raised under successive Finance Acts. Combined with Super Tax, effective rate for high-profit banking years reached 43% — the highest headline rate in the region.
Section 80 definition: paid-up capital not exceeding PKR 50M, employees not exceeding 250, turnover not exceeding PKR 250M, non-listed. Applies on first PKR 100M of profit.
Super Tax under Section 4C of the Income Tax Ordinance applies on high-income companies (income exceeding PKR 150 million) at progressive rates of 1 to 10 percent depending on income band. Originally framed as one-time for tax year 2022, Super Tax has been retained through successive Finance Acts — in-scope multinational groups should not assume it will sunset. Minimum Turnover Tax under Section 113 applies at 1.25 percent of turnover (1 percent for specific industries), creating a floor that catches loss-making businesses. Pillar Two GloBE implementation has not yet been transposed into Pakistani law as of mid-2026; IMF Stand-By Arrangement conditions have signalled progressive alignment but specific QDMTT/IIR/UTPR legislation is pending. Transfer pricing under Section 108 follows OECD principles; CbCR applies for groups above PKR 35 billion consolidated revenue. Group relief under Section 59B requires 75 percent ownership; group taxation under Section 59AA requires 100 percent.
Special incentive regimes include Special Economic Zones under SEZ Act 2012, Special Technology Zones under STZ Authority Act 2021, and Export Processing Zones — offering 10-year tax holidays plus reduced subsequent rates.
Sales Tax and provincial services tax
The federal Sales Tax on goods is 18 percent (raised from 17 percent under the Finance Act 2024). Higher rates apply on specified luxury items — up to 25 percent on luxury vehicles, certain electronics, and branded apparel above prescribed unit-price thresholds.
| Jurisdiction / Rate | Applies to | Authority |
|---|---|---|
| 18% federal | Goods — standard rate | FBR |
| Up to 25% | Specified luxury goods | FBR |
| 0% | Exports (zero-rated) | FBR |
| Sindh: 13-15% | Services — Sindh | SRB |
| Punjab: 16% | Services — Punjab | PRA |
| KPK: 15% | Services — Khyber Pakhtunkhwa | KPRA |
| Balochistan: 15% | Services — Balochistan | BRA |
The federal-provincial sales-tax split is constitutionally based on the 18th Constitutional Amendment (2010), which devolved sales tax on services to the provinces. Service businesses operating across provincial boundaries face multi-jurisdictional registration and compliance. The registration threshold for federal Sales Tax is annual taxable supplies above PKR 10 million for goods; manufacturers and importers face mandatory registration regardless of turnover. E-invoicing (POS-integration) is mandatory for tier-1 retailers under successive SROs (SRO 1262(I)/2024 sequence). Reverse-charge applies on certain digital services from foreign suppliers. Federal Excise Duty (FED) under the Federal Excise Act 2005 applies on cigarettes, tobacco, beverages, cement, and other excisable goods.
Cryptoassets
No dedicated crypto-asset tax law yet; FBR taxes gains under existing income categories
The State Bank of Pakistan issued a 2018 banking prohibition on cryptoassets (SBP Circular 03 of 2018). FBR has taxed gains by treating cryptoasset sales as business income or capital gains under existing Income Tax Ordinance categories. The Pakistan Crypto Council was established in early 2025 to develop a national regulatory framework covering taxation, licensing, AML/CFT, and consumer protection. Mining and staking are business income for organised activity. Receipt of crypto as employment compensation is taxable as standard salary income at the PKR-equivalent value at receipt. Pakistan acceded to the Common Reporting Standard from 2018; CARF implementation remains pending under the Crypto Council's mandate.
Treaty network
Pakistan has approximately 66 active double tax treaties. Key partners include UK, USA, China, UAE, Saudi Arabia, Turkey, Iran, Germany, France, Netherlands, Belgium, Italy, Switzerland, Sweden, Denmark, Canada, Japan, South Korea, Malaysia, Indonesia, Singapore, and Australia. Pakistan ratified the OECD MLI on 28 February 2020 with modifications entering force from 1 May 2020 onward, including adoption of the Principal Purpose Test (PPT) under Article 7 MLI. The Pakistan-India treaty has been substantively non-functional due to bilateral relations since 2019 — Indian-related cross-border flow taxpayers cannot rely on treaty access.
Common audit triggers include: disproportionate input-tax adjustments flagged via IRIS reconciliation; mismatched POS data and Sales Tax returns for tier-1 retailers; transfer-pricing non-compliance under Section 108; withholding-tax under-collection by withholding agents; the ATL compliance framework (elevated withholding rates on non-filers create immediate financial cost); CRS-driven foreign-bank-balance flagging; and unexplained net-worth growth versus declared income via FBR's wealth-statement reconciliation. Standard statute of limitations is 5 years from the tax year under Section 122 (6 years where no return was filed; 10 years for fraud or concealment).
South Asia tax cohort
Pakistan anchors the progressive-PIT + sales-tax archetype in the South Asia cohort alongside four distinct peer structures.
Currency
The Pakistani Rupee (PKR) floats against major currencies under State Bank of Pakistan oversight. The PKR has experienced significant devaluation in recent years under IMF Stand-By Arrangement conditions — the exchange rate moved from approximately PKR 100-150 per USD in earlier years to approximately PKR 278-285 per USD by mid-2026 (verify current rate via SBP data before any FX-sensitive filing). All PIT brackets, Sales Tax thresholds, and CIT thresholds are denominated in PKR and are subject to adjustment via annual Finance Acts.
For multinational groups, PKR devaluation means constant restatement of functional-currency amounts against PKR-denominated regulatory thresholds. Transfer pricing documentation and CbCR thresholds (PKR 35 billion) require annual monitoring against the current rate.
Common pitfalls
Foreign investors and professionals working in Pakistan encounter a cluster of recurring traps:
The Active Taxpayer List (ATL) triggers elevated withholding rates across many transaction categories for non-filers. Many foreign-controlled Pakistani subsidiaries find themselves off-ATL during routine audits or filing-delay periods — the cascading withholding consequences are immediate and financial.
The Finance Act 2019 rolling residency rule catches frequent-business-traveller foreign nationals who would pass the single-year 183-day test. Day-counting across the current year and four preceding years is essential for cross-border professionals visiting Pakistan regularly.
Super Tax under Section 4C was framed as one-time for tax year 2022 but has been retained through successive Finance Acts. In-scope MNE groups should not carry forward assumption of Super Tax expiry — it has become a structural feature of Pakistan's corporate tax for high-income entities.
The 18th Constitutional Amendment devolved services tax to the provinces. Service businesses operating across Sindh, Punjab, KPK, and Balochistan face four separate registration and compliance obligations at varying rates — the federal/provincial split catches many new entrants.
Pakistan's withholding regime (Sections 149-165B and beyond) covers an unusually wide range of transaction categories. Foreign service providers and Pakistani payers need careful identification of withholding category, ATL status, and treaty-rate eligibility before each cross-border payment.
Salaried persons and non-salaried individuals (associations of persons) face different rate schedules. The higher non-salaried rates reflect FBR's policy differential for self-reported versus PAYE-withheld income — misclassification between the two schedules creates significant tax exposure.
Quarterly advance tax under Section 147 applies for individuals and corporates above income thresholds. Missed installment deadlines (25 Sep/Dec/Mar and 15 Jun) trigger interest under Section 205 at the prevailing SBP policy rate plus a margin, calculated daily from the due date.
The Pakistan-India double tax treaty has been substantively non-functional since 2019 due to bilateral relations. Indian-connected cross-border flow taxpayers cannot rely on treaty access and face full domestic withholding rates on Pakistan-source income.
When to engage a Pakistan tax professional
Situations requiring a licensed CA Pakistan (ICAP) or ACMA (ICMAP) professional:
Filing Form 114 + Wealth Statement on time to maintain ATL status. The financial cost of non-ATL (elevated withholding across multiple transaction categories) far exceeds filing costs.
Pakistan's broad WHT regime (Sections 149-165B) covers royalties, technical services, dividends, interest, and many other categories. Treaty-rate eligibility requires documentation and ATL cross-reference.
Section 4C Super Tax assessment for companies with income above PKR 150M and banking-sector CIT at 39% both require specialist computation — especially given successive Finance Act amendments.
Inland Revenue Appellate Tribunal proceedings, FBR audit notices, and High Court appeals on tax law questions require qualified CA Pakistan or Pakistan Tax Bar Association practitioner representation.
Verified firms
TaxPros Rated lists 13 verified firms serving Pakistan-based taxpayers. Firms hold CA Pakistan credentials regulated by ICAP or ACMA/CMA credentials regulated by ICMAP. Coverage spans all four Big Four Pakistan offices (PwC / A.F. Ferguson, KPMG / Taseer Hadi, EY / Ford Rhodes, Deloitte / Yousuf Adil), mid-tier international networks (Grant Thornton Anjum Rahman, BDO Pakistan, RSM Pakistan, Forvis Mazars, Crowe Hussain Chaudhury), and national practices across Karachi and Lahore.
Firm profiles include: stated specialisms (IRIS filing, withholding compliance, Sales Tax, Super Tax computation, SEZ and STZ incentive structures, transfer pricing, IRAT representation, international tax), languages (English and Urdu), and verified credential tier. Use the filters above to narrow by city, specialism, and tier.
Sources
- Federal Board of Revenue (FBR) — official portal: https://www.fbr.gov.pk/
- Income Tax Ordinance 2001 (as amended by Finance Acts): https://www.fbr.gov.pk/income-tax-ordinance-2001/52055
- Sales Tax Act 1990 (as amended): https://www.fbr.gov.pk/sales-tax-act-1990/52055
- FBR Double Taxation Agreements: https://www.fbr.gov.pk/categ/income-tax-treaties/51149/26157/26157
- PwC Worldwide Tax Summaries — Pakistan: https://taxsummaries.pwc.com/pakistan
- Finance Act 2024 — Annual Fiscal Package: https://www.fbr.gov.pk/
- Section 4C Income Tax Ordinance — Super Tax: https://www.fbr.gov.pk/income-tax-ordinance-2001/52055
This page is general information about Pakistan's tax framework. It is not personal guidance for your specific situation. Tax rules change frequently. Always verify current figures on the FBR website (iris.fbr.gov.pk) or with a licensed CA Pakistan or ACMA practitioner before filing.
Frequently asked
Who is the Pakistani tax authority?
The Federal Board of Revenue (FBR), under the Revenue Division of the Ministry of Finance, is Pakistan's federal tax authority for income tax, federal excise, and federal Sales Tax on goods. Provincial revenue authorities (SRB, PRA, KPRA, BRA, Islamabad CT) administer provincial sales tax on services. Filings flow through IRIS (iris.fbr.gov.pk). CA Pakistan regulated by ICAP is the principal credentialed profession.
When is the Pakistani annual return due?
Personal returns (Form 114) for the 1 July to 30 June tax year are due 30 September of the following year. Corporate special-tax-year returns are due 31 December of the year following tax year-end. Sales Tax monthly by the 15th, payment by the 18th. Quarterly advance tax under Section 147 due 25 September, 25 December, 25 March, and 15 June. Wealth Statement (Form 116) is mandatory.
Who is a Pakistani tax resident?
Tax residents are physically present 183 days or more in the tax year, OR present 120 days or more in the tax year AND 365 days or more in the four preceding years (4-year/120-day rule from Finance Act 2019), OR Pakistani nationals not resident elsewhere in service of the federal or provincial government or Pakistani companies. Residents are taxed on worldwide income. Treaty tie-breakers apply.
What are the Pakistani personal income tax rates?
For salaried persons under Finance Act 2024: 0% up to PKR 600,000; 2.5% on 600,001 to 1,200,000; 12.5% on 1,200,001 to 2,400,000; 20% on 2,400,001 to 3,600,000; 25% on 3,600,001 to 6,000,000; 32.5% on 6,000,001 to 12,000,000; 35% above 12,000,000. Non-salaried individuals (AOP) face higher rates. 10% surcharge on non-salaried individuals above PKR 10M.
How does Pakistan's corporate tax work?
Corporate income tax is 29% for most companies. Banking sector 39% (combined with Super Tax can reach 43%). Small companies 20% under Section 80. Super Tax under Section 4C applies on companies with income above PKR 150M at 1-10% depending on band. Pillar Two not yet transposed. Loss carryforward 6 years. Minimum Turnover Tax 1.25% under Section 113.
What is the Pakistani Sales Tax rate?
Federal Sales Tax on goods is 18% (raised from 17% in Finance Act 2024). Higher rates on specified luxury items up to 25%. Provincial sales taxes on services administered by SRB, PRA, KPRA, BRA, Islamabad CT at 13-16% depending on province. Registration threshold PKR 10M annual supplies for goods. E-invoicing mandatory for tier-1 retailers. Federal-provincial split based on 18th Constitutional Amendment 2010.
How does Pakistan tax cryptoassets?
No dedicated crypto-asset tax framework as of 2026. SBP 2018 banking prohibition (Circular 03 of 2018) remains in force. FBR taxes crypto gains by treating sales as business income or capital gains under existing categories on a case-by-case basis. Pakistan Crypto Council established early 2025 to develop a national framework. Mining and staking are business income for organised activity. CRS adopter from 2018; CARF pending.
How many tax treaties does Pakistan have?
Approximately 66 active double tax treaties. Key partners: UK, USA, China, UAE, Saudi Arabia, Turkey, Germany, France, Netherlands, Switzerland, Japan, Canada, South Korea, Singapore. Pakistan ratified the OECD MLI on 28 February 2020 with modifications entering force from 1 May 2020 including the Principal Purpose Test. Pakistan-India treaty non-functional since 2019. CRS adopter from 2018.
Major tax firms in Pakistan
Verified directory of the largest accounting + tax practices operating in Pakistan. Listings are entity-level reference cards — claim flow is open to firm representatives.
- Big 4
Deloitte Pakistan (Deloitte Yousuf Adil)
- Big 4
EY Pakistan
- Big 4
EY Pakistan (EY Ford Rhodes)
- Big 4
KPMG Pakistan
- Big 4
KPMG Pakistan (KPMG Taseer Hadi & Co.)
- Big 4
PwC Pakistan
- Big 4
PwC Pakistan (A.F. Ferguson & Co.)
- National
BDO Pakistan
- National
Crowe Hussain Chaudhury & Co.
- National
Forvis Mazars Pakistan
- National
Grant Thornton Anjum Rahman
- National
Grant Thornton Pakistan (Grant Thornton Anjum Rahman)
- National
RSM Pakistan
Find a tax pro in Pakistan
Browse credentialed pros serving Pakistan — filter by specialty, language, and credential type.
Browse the Pakistan directorySources
The figures, dates, and rules on this page are sourced from the documents listed below. Where two sources disagree, both are listed.
- Federal Board of Revenue (Pakistan) · accessed
- Federal Board of Revenue (Pakistan) · accessed
- Federal Board of Revenue (Pakistan) · accessed
- Federal Board of Revenue (Pakistan) · accessed
- PwC Worldwide Tax Summaries · accessed
- Federal Board of Revenue (Pakistan) · accessed
- Federal Board of Revenue (Pakistan) · accessed
Important disclaimer
Informational only — not tax advice. This page summarises publicly available information about tax in Pakistan as of July 2026. Tax laws change, individual circumstances vary, and the application of any rule depends on your specific facts.
TaxProsRated does not provide tax, legal, accounting, or financial advice. Before acting on anything you read here, consult a qualified tax professional licensed in your jurisdiction (in the US: CPA, Enrolled Agent, or attorney; in the UK: CIOT- or ATT-qualified adviser; in Australia: TPB-registered tax agent; elsewhere: a locally-licensed equivalent). TaxProsRated, its operators, and its contributors disclaim all liability for action taken in reliance on this page.