Texation in Pakistan

::. Pakistan Business Guide ...Cost, Elements & Zones


	::. Texation in Pakistan

Generally, any income received / accrued in or deemed to be received / accrued in from any source is liable to tax in Pakistan. However income remitted to Pakistan by resident companies, non-resident companies and non-resident individuals are exempted from tax.

Income / Profits generated by an assessee from the following setups is exempted from tax :

a) An industrial undertaking, which is engaged in manufacturing of goods or material transformation, conversion, transmission or distribution or supply of electrical energy or hydel power.

b) An undertaking approved by CB

c) A setup in areas specified by CBR.

d) Export of software developed in Pakistan.

Residential status determination

In case of individuals:

a) Person in that year is in Pakistan for a period / periods amounting to 182 days or more.

b) Person in that year is in Pakistan for 90 days or more who has been in Pakistan within four preceding years for 365 days or more.

In case of companies:

The control and management of its affairs is situated wholly in Pakistan

Company Tax
Banking Companies	50%
Public Companies	35%
Other Companies	45%
Personal Income Tax
Resident Individuals	7.5% - 35%
Non-Resident Individuals	20%
Withholding Tax
¨ Interest on Securities	30% after Zakat
¨ Interest on Profit (on Bank Account/Fin.Inst.)	10% before Zakat
¨ Fees for Technical Services	15% of Gross fee
¨ Services Rendered	5%
Execution of contract
a) Value not exceeding 30 million rupees	5% with NTN
	7% without NTN
b) Value exceeding 30 million rupees	6% with NTN
	8% without NTN
¨ Supply of Goods	3.5% with NTN
	5% without NTN
¨ Profit or Interest on Bonds,Certificates,Securities etc.	10% from payment
¨ Commission or Brokerage	10%
¨ Royalty	15% of Gross fee
Sales Tax
This tax is imposed at the import and manufacturing level	15 – 20%
Registered items	15%
Non-registered items	18%
Specified items	20%
Turn over Tax	2%
Interest rate for long term finances	12 – 18%

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