Tax Law, Lawyers and Tax Rates in Pakistan
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Here you may find information about tax law and lawyers in Pakistan. Our dedicated team of professional lawyers and consultants best assists their clients in understanding the tax law of Pakistan. Virtually every business decision today has tax consequences. You deserve the most practical, tuned-in and well-crafted tax solutions. We provide a comprehensive range of services from the completion of tax returns under corporation tax, self assessment to complex consultancy assignments and strategic tax planning.
Our ability to focus on our clients and deliver innovative tax solutions is enhanced by our knowledge of specific business environments including financial services, leisure, retail, sport, high growth companies, manufacturing and automotive, technology and communications, public sector, property and utilities. We also have a number of specialist tax groups who deal with specific complex areas of tax law. Our consultants can help you plan, grow and structure your business. We are known for our straightforward approach to solving our clients’ most complex business challenges. We work hand-in-hand with clients to improve the business performance, drive shareholder value and create the competitive advantage.
Our Services include:
Corporate and individual tax planning including of Trusts, Cooperative Societies and NGOs.
Compliance services including preparation of income tax and sales tax returns and Customs clearance.
Representing clients before tax authorities and assisting in preparing appeals to the Tribunals, High Courts and Supreme Court.
International Tax Consultancy including tax on international transactions and advising on double taxation treaties.
Assisting with sales tax matters including registration, de-registration and assessment.
Obtaining Advance Ruling on proposed investments or business transactions.
Establishing gratuity funds, provident funds and other employees benefit schemes and their approval from tax authorities.
Providing general tax advice based on current and evolving laws and rulings.
Tax Law System In Pakistan
Federal taxes in Pakistan like most of the taxation systems in the world are classified into two broad categories, viz., direct and indirect taxes. A broad description regarding the nature of administration of these taxes is explained below:
Direct Taxes
Direct taxes primarily comprise income tax. For the purpose of the charge of tax and the computation of total income, all income is classified under the following heads:
- Salaries
- Interest on Securities
- Income from Property
- Income from Business or Profession
- Capital Gains
- Income from Other Sources
Personal Tax
All individuals, unregistered firms, associations of persons, etc., are liable to tax, at the rates ranging from 10 to 35 per cent.
Tax on Companies
All public companies (other than banking companies) incorporated in Pakistan are assessed for tax at corporate rate of 35%. However, the effective rate is likely to differ on account of allowances and exemptions related to industry, location, exports, etc.
Wealth Statement u/Sec. 116
Wealth Statement u/Sec. 116 is compulsory, where declared income is Rs. 500,000/- or more.
Tax u/Sec. 153(8A) (omitted)
Now, where NTN/CNIC is not available, the excess tax @ 2% shall not be collected.
Inter-Corporate Dividend Tax
Tax on the dividends received by a public company from a Pakistan company is payable at the rate of 5% and at the rate of 15% in case dividends are received by a foreign company. Inter-corporate dividends declared or distributed by power generation companies is subject to reduced rate of tax i.e. 7.5%. Other companies are taxed at the rate of 20%. Dividends paid to all non-company shareholders by the companies are subject to with holding tax of 10% which is treated as a full and final discharge of tax liability in respect of this source of income.
Treatment of Dividend Income
Dividend income received as below, enjoys tax exemption, provided it does not exceed Rs. 10,000/-.
Dividend received by non-resident from the state enterprises Mutual Fund set by the Investment Corporation of Pakistan.
Dividends received from a Domestic Company out of income earned abroad provided it is engaged abroad exclusively in rendering technical services in accordance with an agreement approved by the Central Board of Revenue.
Unilateral Relief
A person resident in Pakistan is entitled to a relief in tax on any income earned abroad, if such income has already been subjected to tax outside Pakistan. Proportionate relief is allowed on such income at an average rate of tax in Pakistan or abroad, whichever is lower.
PAKISTAN TAX YEAR 2019 - 2020
Tax Rates for Salaried Individuals
Division I, Part I, 1st Schedule
Serial No | Taxable Income | Rate of Tax |
01 | Where the taxable income does not exceed Rs.600,000 | 0% |
02 | Where the taxable income exceeds Rs.600,000 but does not exceed Rs.1,200,000 | 5% of the amount exceeding Rs.600,000 |
03 | Where the taxable income exceeds Rs.1,200,000 but does not exceed Rs.1,800,000 | Rs.30,000 plus 10% of the amount exceeding Rs.1,200,000 |
04 | Where the taxable income exceeds Rs.1,800,000 but does not exceed Rs.2,500,000 | Rs.90,000 plus 15% of the amount exceeding Rs.1,800,000 |
05 | Where the taxable income exceeds Rs.2,500,000 but does not exceed Rs.3,500,000 | Rs.195,000 plus 17.5% of the amount exceeding Rs.2,500,000 |
06 | Where the taxable income exceeds Rs. 3,500,000 but does not exceed Rs.5,000,000 | Rs.370,000 plus 20% of the amount exceeding Rs.3,500,000 |
07 | Where the taxable income exceeds Rs. 5,000,000 but does not exceed Rs.8,000,000 | Rs.670,000 plus 22.5% of the amount exceeding Rs.5,000,000 |
08 | Where the taxable income exceeds Rs. 8,000,000 but does not exceed Rs.12,000,000 | Rs.1,345,000 plus 25% of the amount exceeding Rs.8,000,000 |
09 | Where the taxable income exceeds Rs. 12,000,000 but does not exceed Rs.30,000,000 | Rs.2,345,000 plus 27.5% of the amount exceeding Rs.12,000,000 |
10 | Where the taxable income exceeds Rs. 30,000,000 but does not exceed Rs.50,000,000 | Rs.7,295,000 plus 30% of the amount exceeding Rs.30,000,000 |
11 | Where the taxable income exceeds Rs. 50,000,000 but does not exceed Rs.75,000,000 | Rs.13,295,000 plus 32.5% of the amount exceeding Rs.50,000,000 |
12 | Where the taxable income exceeds Rs. 75,000,000 | Rs.21,420,000 plus 35% of the amount exceeding Rs.75,000,000 |
— | Every person responsible for making payment for directorship fee or fee for attending Board meeting or such fee by whatever name called. | 20% of gross amount paid |
Table: Tax Rates for Salaried Individuals | Value of accomodation and conveyance provided by the employer is chargeable to tax under reule 4 & 5 of the Income Tax Rules, 2002.
All perquisites and allowances are liable to tax without any exemption except special and medical allowance under Clause 39 and 139 respectively of Part-1 of 2nd Schedule.
Tax Rates for Individuals & Association of Persons (Other Than Salaried)
Division I, Part I, 1st Schedule
Serial No | Taxable Income | Rate of Tax |
01 | Where the taxable income does not exceed Rs.400,000 | 0% |
02 | Where the taxable income exceeds Rs.400,000 but does not exceed Rs.600,000 | 5% of the amount exceeding Rs.400,000 |
03 | Where the taxable income exceeds Rs.600,000 but does not exceed Rs.1,200,000 | Rs.10,000 plus 10% of the amount exceeding Rs.600,000 |
04 | Where the taxable income exceeds Rs.1,200,000 but does not exceed Rs.2,400,000 | Rs.70,000 plus 15% of the amount exceeding Rs.1,200,000 |
05 | Where the taxable income exceeds Rs.2,400,000 but does not exceed Rs.,000,000 | Rs.250,000 plus 20% of the amount exceeding Rs.2,400,000 |
06 | Where the taxable income exceeds Rs.3,000,000 but does not exceed Rs.4,000,000 | Rs.370,000 plus 25% of the amount exceeding Rs.3,000,000 |
07 | Where the taxable income exceeds Rs.4,000,000 but does not exceed Rs.6,000,000 | Rs.620,000 plus 30% of the amount exceeding Rs.4,000,000 |
08 | Where the taxable income exceeds Rs.6,000,000 | Rs.1,220,000 plus 35% of the amount exceeding Rs.6,000,000 |
Table: Tax Rates for Individuals & Association of Persons (Other Than Salaried)
Tax Rates for Companies
Division II, Part I, 1st Schedule
Serial No |
Type |
Rate of Tax |
01 |
Banking Companies |
35% |
02 |
Public / Private Companies |
29% |
03 |
Small Companies |
23% |
04 |
Alternate Corporate Tax (ACT) u/Sec. 113C |
17% of accounting profit |
Table: Tax Rates for Companies | Where the taxpayer is a small company as defined in Section 2 of the Income Tax Ordinance, 2001, tax shall be payable at the rate of 24%
Super Tax
Division II, Part I, 1st Schedule
Serial No |
Type |
Rate of Tax |
01 |
Banking Company |
4% |
02 |
Other than a Banking Company, having income equal to or exceeding Rs.500 million |
2% |
Table: Super Tax
Gradual Reduction in Corporate Tax Rates
Serial No |
Tax Year |
Rate of Tax |
01 |
2019 |
24% |
02 |
2020 |
23% |
03 |
2021 |
22% |
04 |
2022 |
21% |
05 |
2023 and onwards |
20% |
Table: Gradual Reduction in Corporate Tax Rates
Dividend Tax
Division III, Part I, 1st Schedule
Serial No |
Description |
Rate of Tax |
01 |
In case of dividend paid by Independent Power Purchaser where such dividend is a pass through item under an Implementation Agreement or Power Purchase Agreement or Energy Purchase Agreement and is required to be reimbursed by Central Power Purchasing Agency (CPPA-G) or its predecessor or successor entity. |
7.5% |
02 |
In cases other than mentioned in 01 and 03. |
15% |
03 |
In case of dividend received by a person from a mutual fund. |
25% |
Table: Dividend Tax | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers’ List.
Tax for Profit on Debt – Other than a Compaany (Sec. 7B)
Division III A, Part I, 1st Schedule
Serial No |
Profit on Debt |
Rate of Tax |
01 |
Where profit on debt does not exceed Rs.5,000,000 |
15% |
02 |
Where profit on debt exceeds Rs.5,000,000 but does not exceed Rs.25,000,000 |
17.5% of the amount exceeding Rs.5,000,000 |
03 |
Where profit on debt exceeds Rs.25,000,000 but does not exceed Rs.36,000,000 |
20% of the amount exceeding Rs.25,000,000 |
Table: Tax for Profit on Debt | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers’ List.
Profit on Debt exceeding Rs.36 million shall be subject to tax under normal law.
Tax on Shipping or Air Transport Income of a Non-Resident Person
Serial No |
Description |
Rate of Tax |
01 |
In the case of shipping income |
8% of the gross amount received or receivable |
02 |
In the case of air transport income |
3% of the gross amount received or receivable |
Table: Tax on Shipping or Air Transport Income of a Non-Resident Person
Tax on Return on Investment (Sec. 5AA)
Division III B, Part I, 1st Schedule
Serial No |
Sukuk-holder |
Rate of Tax |
01 |
Company |
25% |
02 |
Individual and AOP, if the return on investment is more than Rs.1,000,000 |
12.5% |
03 |
Individual and AOP, if the return on investment is less than Rs.1,000,000 |
10% |
Table: Tax on Return on Investment | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers’ List
Tax on Certain Payments to Non-Residents
Serial No |
Category |
Rate of Tax |
01 |
Royalty (Sec. 6) |
15% of the gross amount |
02 |
Fee for Technical Services (Sec. 6) |
15% of the gross amount |
03 |
Offshore digital services (Sec. 6) |
5% of the gross amount |
04 |
Shipping income (Sec. 7) |
8% of the gross amount received or receivables |
05 |
Air transport income (Sec. 7) |
3% of the gross amount received or receivables |
Table: Tax on Certain Payments to Non-Residents | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers’ List
Tax on Income from Property for Individuals and Association of Persons (Sec. 15)
Division V, Part I, 1st Schedule
Serial No |
Gross Amount of Rent |
Rate of Tax |
01 |
Where the gross amount of rent does not exceed Rs.200,000 |
Nil |
02 |
Where the gross amount of rent exceeds Rs.200,000 but does not exceed Rs.600,000 |
5% of the gross amount exceeding Rs.200,000 |
03 |
Where the gross amount of rent exceeds Rs.600,000 but does not exceed Rs.1,000,000 |
Rs.20,000 + 10% of the gross amount exceeding Rs.600,000 |
04 |
Where the gross amount of rent exceeds Rs.1,000,000 but does not exceed Rs.2,000,000 |
Rs.60,000 + 15% of the gross amount exceeding Rs.1,000,000 |
05 |
Where the gross amount of rent exceeds Rs.2,000,000 but does not exceed Rs.4,000,000 |
Rs.210,000 + 20% of the gross amount exceeding Rs.2,000,000 |
06 |
Where the gross amount of rent exceeds Rs.4,000,000 but does not exceed Rs.6,000,000 |
Rs.610,000 + 25% of the gross amount exceeding Rs.4,000,000 |
07 |
Where the gross amount of rent exceeds Rs.6,000,000 but does not exceed Rs.8,000,000 |
Rs.1,110,000 + 30% of the gross amount exceeding Rs.6,000,000 |
08 |
Where the gross amount of rent exceeds Rs.8,000,000 |
Rs.1,710,000 + 35% of the gross amount exceeding Rs.8,000,000 |
Table: Tax on Income from Property
Capital Gains on Disposal of Securities
Division VII, Part I, 1st Schedule
Serial No |
Period |
Tax Year 2015 |
Tax Year 2016 |
Tax Year 2017 |
Tax Years 2018 to 2020 |
|
Securities acquired prior 01.07.2016 |
Securities acquired after 01.07.2016 |
|||||
01 |
Where holding period of a security is less than twelve months |
12.5% |
15% |
15% |
15% |
15% |
02 |
Where holding period of a security is twelve months or more but less than twenty-four months |
10% |
12.5% |
12.5% |
12.5% |
15% |
03 |
Where holding period of a security is twenty-four months or more but the security was acquired on or after 1st July, 2013 |
0% |
7.5% |
7.5% |
7.5% |
15% |
04 |
Where the security was acquired before 1st July, 2013 |
0% |
0% |
0% |
0% |
0% |
05 |
Future commodity contracts entered into by the members of Pakistan Mercantile Exchange |
0% |
0% |
5% |
5% |
5% |
Table: Capital Gains on Disposal of Securities | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers’ List
A Mutual Fund or a Collective Investment Scheme or a REIT Scheme shall deduct Capital Gains Tax at the rates as specified below on Redemtion of Securities, as specified below:
Serial No |
Category |
Rate of Tax |
|
01 |
Individual and Association of Persons |
10% for stock funds |
10% for other funds |
02 |
Company |
10% for stock funds |
25% for other funds |
Provided further that in case of a stock fund if dividend receipts of the fund are less than capital gains, then the rate of tax deduction shall be 12.5%. No capital gains tax shall be deducted, if the holding period of the security is more than 4 years.
Capital Gains on Disposal of Immovable Property (Sec. 37(1A))
Division VIII, Part I, 1st Schedule
Serial No |
Period |
Rate of Tax |
01 |
Where the gain does not exceed Rs.5 million |
5% |
02 |
Where the gain exceeds Rs.5 million but does not exceed Rs.10 million |
10% |
03 |
Where the gain exceeds Rs.10 million but does not exceed Rs.15 million |
15% |
04 |
Where the gain exceeds Rs.15 million |
20% |
Table: Capital Gains on Disposal of Immovable Property
Capital Gains on Disposal of Immovable Property being an Open Plot (Sec. 37(3A))
Serial No |
Holding Period |
Rate of Tax |
01 |
Where the holding period of open plot does not exceed one year |
100% |
02 |
Where the holding period of open plot exceeds one year but does not exceed eight years |
75% |
03 |
Where the holding period of open plot exceeds eight years |
0% |
Table: Capital Gains on Disposal of Immovable Property being an Open Plot
Capital Gains on Disposal of Immovable Property being a Constructed Property (Sec. 37(3B))
Serial No |
Holding Period |
Rate of Tax |
01 |
Where the holding period of constructed property does not exceed one year |
100% |
02 |
Where the holding period of constructed property exceeds one year but does not exceed four years |
75% |
03 |
Where the holding period of constructed property exceeds four years |
0% |
Table: Capital Gains on Disposal of Immovable Property being a Constructed Property
Tax on Builders (Sec. 7C)
Division VIII A, Part I, 1st Schedule
Karachi, Lahore and Islamabad |
Hyderabad, Sukkur, Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Peshawar, Mardan, Abbottabad and Quetta |
Urban Areas not specified in A and B |
|||
For Commercial Buildings |
|||||
Rs.210 / Sq Ft |
Rs.210 / Sq Ft |
Rs.210 / Sq Ft |
|||
For Residential Buildings |
|||||
Area Sq. ft |
Rate Sq. ft |
Area Sq. ft |
Rate Sq. ft |
Area Sq. ft |
Rate Sq. ft |
Up to 750 |
Rs.20 |
Up to 750 |
Rs.15 |
Up to 750 |
Rs.10 |
751 to 1500 |
Rs.40 |
751 to 1500 |
Rs.35 |
751 to 1500 |
Rs.25 |
1501 and more |
Rs.70 |
1501 and more |
Rs.55 |
1501 and more |
Rs.35 |
Table: Tax on Builders
Tax on Developers (Sec. 7D)
Division VIII B, Part I, 1st Schedule
Karachi, Lahore and Islamabad |
Hyderabad, Sukkur, Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Peshawar, Mardan, Abbottabad and Quetta |
Urban Areas not specified in A and B |
|||
For Commercial Plots |
|||||
Rs.210 / Sq Yd |
Rs.210 / Sq Yd |
Rs.210 / Sq Yd |
|||
For Residential Plots |
|||||
Area Sq. Yd |
Rate Sq. Yd |
Area Sq. Yd |
Rate Sq. Yd |
Area Sq. Yd |
Rate Sq. Yd |
Up to 120 |
Rs.20 |
Up to 120 |
Rs.15 |
Up to 120 |
Rs.10 |
121 to 200 |
Rs.40 |
121 to 200 |
Rs.35 |
121 to 200 |
Rs.25 |
201 and more |
Rs.70 |
201 and more |
Rs.55 |
201 and more |
Rs.35 |
Table: Tax on Developers
Minimum Tax (Sec. 113)
Division IX, Part I, 1st Schedule
Serial No |
Person(s) |
Minimum Tax as percentage of the person’s turnover for the year |
01 |
|
0.75% |
02 |
|
0.25% |
03 |
Motorcycle dealers registered under the Sales Tax Act, 1990 |
0.30% |
04 |
In all cases (other than 1 to 3 and 5) |
1.5% |
05 |
Clause (24D) of Part II of the Second Schedule Dealers and sub-dealers of sugar, cement and edible oil subject to the condition that the names are appearing on the ATL issued under the Sales Tax Act, 1990 and the Income Tax Ordinance, 2001 |
0.25% |
Table: Minimum Tax
Reduction in Tax Liability for Full Time Teacher
Clause (2), Part III of 2nd Schedule
The tax payable by a fulltime teacher or a researcher, employed in a non-profit education or research institution duly recognised by HEC, a Board of Education or a University recognised by HEC including government research institution shall be reduced by an amount equal to 25% of the tax payable on his income from salary. Provided that this clause shall not apply to teachers of medical profession who derive income from private medical practice or who receive share of consideration received from patients. |
Table: Reduction in Tax Liability for Full Time Teacher
Payment of Advance Tax
Sec. 147
Installment |
Quarter |
Due Dates |
|
Individuals |
AOPs / Companies |
||
01 |
September |
15th September |
25th September |
02 |
December |
15th December |
25th December |
03 |
March |
15th March |
25th March |
04 |
June |
15th June |
25th June |
Table: Payment of Advance Tax
Advance Tax
Serial No |
Person(s) |
Rate of Tax |
01 |
|
1% of the import value as increased by customs-duty, sales tax and federal excise duty |
02 |
Persons importing pulses |
2% of the import value as increased by customs-duty, sales tax and federal excise duty |
03 |
Commercial importers covered under Notification No. S.R.O. 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O 1125(I)/2011 dated the 31st December, 2011. |
3% of the import value as increased by customs-duty, sales tax and federal excise duty |
04 |
Persons importing coal |
4% |
05 |
Persons importing finished pharmaceutical products that are not manufactured otherwise in Pakistan, as certified by the Drug Regulatory Authority of Pakistan |
4% |
06 |
Ship breakers on import of ships |
4.5% |
07 |
Industrial undertakings not covered under S. Nos 01 to 06 |
5.5% |
08 |
Companies not covered under S. Nos. 01 to 07 |
5.5% |
09 |
Persons not covered under S. Nos. 01 to 08 |
6% |
Table: Advance Tax
Advance Tax on Dividend
Serial No |
Description |
Rate of Tax |
01 |
In case of dividends paid by Independent Power Purchasers where such dividend is a pass through item under an Implementation Agreement or Power Purchase Agreement or Energy Purchase Agreement and is required to be re-imbursed by Central Power Purchasing Agency (CPPA-G) or its predecessor or successor entoty. |
7.5% |
02 |
Other than mentioned above |
15% |
Table: Advance Tax on Dividend
Tax on Brokerage and Commission
Serial No |
Person(s) |
Rate of tax |
01 |
Advertising Agents |
10% |
02 |
Life Insurance Agents where commission received is less than Rs. 0.5 million per annum |
8% |
03 |
Persons not covered in 1 and 2 above |
12% |
Table: Tax on Brokerage and Commission
Collection of Tax by a Registered Stock Exchange in Pakistan
Serial No |
Description |
Rate of Tax |
01 |
In case of purchase of shares as per clause (a) of sub-section (1) of Section 233A. |
0.02% of purchase value |
02 |
In case of purchase of shares as per clause (b) of sub-section (1) of Section 233A. |
0.02% of sale value |
Table: Collection of Tax by a Stock Exchange in Pakistan
Collection of Tax on Passenger Transport Vehicles
Serial No |
Capacity |
Rate per seat per annum |
01 |
Four or more persons but less than ten persons. |
Rs.50 |
02 |
Ten or more persons but less than twenty persons. |
Rs.100 |
03 |
Twenty persons or more. |
Rs.300 |
Table: Collection of Tax on Passenger Transport Vehicles
Yearly Collection of Tax on Private Motor Vehicles
Serial No |
Engine Capacity |
Rate of Tax |
01 |
Up to 1000cc |
Rs.800 |
02 |
1001cc to 1199cc |
Rs.1,500 |
03 |
1200cc to 1299cc |
Rs.1,750 |
04 |
1300cc to 1499cc |
Rs.2,500 |
05 |
1500cc to 1599cc |
Rs.3,750 |
06 |
1600cc to 1999cc |
Rs.4,500 |
07 |
2000cc and above |
Rs.10,000 |
Table: Yearly Collection of Tax on Private Motor Vehicles
Lump sum Collection of Tax on Private Motor Vehicles
Serial No |
Engine Capacity |
Rate of Tax |
01 |
Up to 1000cc |
Rs.10,000 |
02 |
1001cc to 1199cc |
Rs.1,8000 |
03 |
1200cc to 1299cc |
Rs.20,000 |
04 |
1300cc to 1499cc |
Rs.30,000 |
05 |
1500cc to 1599cc |
Rs.45,000 |
06 |
1600cc to 1999cc |
Rs.60,000 |
07 |
2000cc and above |
Rs.120,000 |
Table: Lump sum Collection of Tax on Private Motor Vehicles
Collection of Tax on Electricity Consumption
Serial No |
Electricity Bill |
Amount in Rs. |
01 |
Does not exceed Rs.400 |
0 |
02 |
Exceeds Rs.400 but does not exceed Rs.600 |
80 |
03 |
Exceeds Rs.600 but does not exceed Rs.800 |
100 |
04 |
Exceeds Rs.800 but does not exceed Rs.1,000 |
160 |
05 |
Exceeds Rs.1,000 but does not exceed Rs.1,500 |
300 |
06 |
Exceeds Rs.1,500 but does not exceed Rs.3,000 |
350 |
07 |
Exceeds Rs.3,000 but does not exceed Rs.4,500 |
450 |
08 |
Exceeds Rs.4,500 but does not exceed Rs.6,000 |
500 |
09 |
Exceeds Rs.6,000 but does not exceed Rs.10,000 |
650 |
10 |
Exceeds Rs.10,000 but does not exceed Rs.15,000 |
1,000 |
11 |
Exceeds Rs.15,000 but does not exceed Rs.20,000 |
1,500 |
12 |
Exceeds Rs.20,000 |
|
Table: Collection of Tax on Electricity Consumption
Advance Tax on Domestic Electricity Consumption
Serial No |
Description |
Rate of Tax |
01 |
If the amount of monthly bill is Rs.75,000 or more |
7.5% |
02 |
If the amount of bill is less than Rs.75,000 |
0% |
Table: Advance Tax on Domestic Electricity Consumption
Collection of Tax on Telephone Users
Serial No |
Description |
Rate of Tax |
01 |
In the case of a telephone subscriber (other than mobile phone subscriber) where the amount of monthly bill exceeds Rs.1,000 |
10% of the exceeding amount of bill |
02 |
In the case of subscriber of internet, mobile telephones and pre-paid internet or telephone card |
12.5% of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form. |
Table: Collection of Tax on Telephone Users
Tax on Cash Withdrawal from a Bank
Serial No |
Description |
Rate of Tax |
01 |
Cash amount withdrawn, for the person whose name is not appearing in the active taxpayer’s list. |
0.6% of the amount withdrawn |
Table: Tax on Cash Withdrawal from a Bank
Advance Tax on Transactions in Bank [Transferor]
Serial No |
Description |
Rate of Tax |
01 |
The rate of tax to be deducted under Sec. 231AA for the person whose name is not appearing in the active taxpayers’ list. |
0.6% of the transaction |
Table: Advance Tax on Transactions in Bank
Advance Tax on Banking Transactions Otherwise Than Through Cash [Receiver]
Serial No |
Description |
Rate of Tax |
01 |
Banking Transaction (other than cash) at the time of sale of instrument, including demand draft, pay order, special deposit receipt, transfer of any sum through cheque, online transfer, ATM transfers or any other mode of electronic or paper based transfers. |
0.4% of the transaction amount |
Table: Advance Tax on Banking Transactions Otherwise Than Through Cash
Advance Tax on Purchase, Registration and Transfer of Motor Vehicles
Serial No |
Engine Capacity |
Rate of Tax |
01 |
Up to 850cc |
Rs.7,500 |
02 |
851cc to 1000cc |
Rs.1,5000 |
03 |
1001cc to 1300cc |
Rs.25,000 |
04 |
1301cc to 1600cc |
Rs.50,000 |
05 |
1601cc to 1800cc |
Rs.75,000 |
06 |
1801cc to 2000cc |
Rs.100,000 |
07 |
2001cc to 2500cc |
Rs.150,000 |
08 |
2501cc to 3000cc |
Rs.200,000 |
09 |
Above 3000cc |
Rs.250,000 |
Table: Advance Tax on Purchase, Registration and Transfer of Motor Vehicles
Advance Tax on Transfer of Registration or Ownership of Motor Vehicles
Serial No |
Engine Capacity |
Rate of Tax |
01 |
Up to 850cc |
__ |
02 |
851cc to 1000cc |
Rs.5,000 |
03 |
1001cc to 1300cc |
Rs.7,500 |
04 |
1301cc to 1600cc |
Rs.12,500 |
05 |
1601cc to 1800cc |
Rs.18,750 |
06 |
1801cc to 2000cc |
Rs.25,000 |
07 |
2001cc to 2500cc |
Rs.37,500 |
08 |
2501cc to 3000cc |
Rs.50,000 |
09 |
Above 3000cc |
Rs.62,500 |
Table: Advance Tax on Transfer of Registration or Ownership of Motor Vehicles
Tax on Cable Television Operator
License Category as provided in PEMRA Rules |
Tax on License Fee |
Tax on Renewal |
H |
Rs.7,500 |
Rs.10,000 |
H-1 |
Rs.10,000 |
Rs.15,000 |
H-2 |
Rs.25,000 |
Rs.30,000 |
R |
Rs.5,000 |
Rs.12,000 |
B |
Rs.5,000 |
Rs.40,000 |
B-1 |
Rs.30,000 |
Rs.35,000 |
B-2 |
Rs.40,000 |
Rs.45,000 |
B-3 |
Rs.50,000 |
Rs.75,000 |
B-4 |
Rs.75,000 |
Rs.100,000 |
B-5 |
Rs.87,500 |
Rs.150,000 |
B-6 |
Rs.175,000 |
Rs.200,000 |
B-7 |
Rs.262,500 |
Rs.300,000 |
B-8 |
Rs.437,500 |
Rs.500,000 |
B-9 |
Rs.700,000 |
Rs.800,000 |
B-10 |
Rs.875,500 |
Rs.900,000 |
Table: Tax on Cable Television Operator
Advance Tax on Sale to Distributors, Dealers or Wholesalers
Serial No |
Category of Sales |
Rate of Tax |
01 |
Fertilizers |
0.7% |
02 |
Other than Fertilizers |
0.1% |
Table: Advance Tax on Sale to Distributors, Dealers or Wholesalers
Advance Tax on Dealers, Commission Agents and Arhatis, etc.
Serial No |
Group |
Amount of Tax |
01 |
Group or Class A |
Rs.100,000 |
02 |
Group or Class B |
Rs.7,5000 |
03 |
Group or Class C |
Rs.5,0000 |
04 |
Any Other Category |
Rs.5,0000 |
Table: Advance Tax on Dealers, Commission Agents and Arhatis, etc.
Advance Tax on Purchase of Immovable Property
Serial No |
Period |
Rate of Tax |
01 |
Where the value of immovable property is up to 3 million |
0% |
02 |
Where the value of immovable property is more than 3 million |
1% |
Table: Advance Tax on Purchase of Immovable Property
Advance Tax on Sale or Transfer of Immovable Property
Serial No |
Description |
Rate of Tax |
01 |
The rate of tax to be collected under Sec 236K shall be in accordance with the fair market value. |
1% |
Table: Advance Tax on Sale or Transfer of Immovable Property
Advance Tax on International Air Ticket
Serial No |
Type of Ticket |
Rate of Tax |
01 |
First / Executive Class |
Rs.16,000 per person |
02 |
Others excluding Economy |
Rs.12,000 per person |
03 |
Economy |
0 |
Table: Advance Tax on International Air Ticket
Advance Tax on Functions and Gatherings
Serial No |
Locations |
Rate of Tax |
01 |
For Islamabad, Lahore, Multan, Faisalabad, Rawalpindi, Gujranwala, Bahawalpur, Sargodha, Sahiwal, Sheikhupura, Dear Ghazi Khan, Karachi, Hyderabad, Sukkur, Thatta, Larkana, Mirpur Khas, Nawabshah, Peshawar, Mardan, Abbotabad, Kohat, Dera Ismail Khan, Quetta, Sibi, Loralai, Khuzdar, Dear Murad Jamali and Turbat. |
5% of the bill ad valorem or Rs.20,000 per function, whichever is higher |
02 |
For cities other than those mentioned above. |
5% of the bill ad valorem or Rs.10,000 per function, whichever is higher |
Table: Advance Tax on Functions and Gatherings
Advance Tax on Insurance Premium
Serial No |
Type of Premium |
Rate of Tax |
01 |
General insurance premium |
4% |
02 |
Life insurance premium if exceeding Rs. 0.3 million in aggregate per annum |
1% |
03 |
Others |
0% |
Table: Advance Tax on Insurance Premium
Advance Tax on Extraction of Minerals
Serial No |
Description |
Rate of Tax |
01 |
The rate of tax to be collected under Sec 236V as per value of the minerals. |
5% |
Table: Advance Tax on Extraction of Minerals
Withholding Income Tax Rates
Nature of Payment |
Tax Rate |
Nature of Tax (Advance / Final / Minimum Tax) |
|
Persons appearing in ATL |
Persons not appearing in ATL |
IMPORTS [Sec. 148 and Part II of First Schedule] |
|||
Industrial undertaking importing remittable steel and directly reduced iron for its own use |
1% |
2% |
Advance Tax in the case of:
Minimum Tax in the case of:
|
Persons importing potassic fertilizers under ECC’s decision No ECC-155/12/2004 dated 09-12-2004 |
|||
Persons importing urea |
|||
Manufacturers covered under SRO 1125(1)/2011 dated 31-12-2011 for importing items as per said SRO |
|||
Persons importing gold |
|||
Persons importing cotton |
|||
Persons importing LNG |
1% |
2% |
|
Persons importing pulses |
2% |
4% |
|
Industrial undertaking importing plastic raw material (PCT) Heading 39.01 to 39.12 for its own use |
1.75% |
Companies: 11% Others: 12% |
|
Commercial importers, importing plastic raw material (PCT) Heaing 39.01 to 39.12 |
4.5% |
||
Commercial importers covered under SRO 1125(I)/2011 dated 31-12-2011 |
3% |
6% |
|
Persons importing coal |
4% |
8% |
|
Persons importing finished pharmaceutical products that are not manufactured in Pakistan, as certified by the Drug Regulatory Authority of Pakistan |
4% |
8% |
|
Ship breaker on import of ships |
4.5% |
9% |
|
Companies and industrial undertakings not covered above |
5.5% |
11% |
|
Others |
6% |
12% |
DIVIDEND, INCLUDING DIVIDEND IN SPECIE [Sec. 150, 236S, Division I Part III First Schedule & Clause 11B Part IV Second Schedule] |
|||
Dividend from a company where no tax is payable by such company due to exemption of income or carry forward of business losses or claim of any tax credits |
25% |
50% |
Final Tax |
Inter-corporate dividend within the group companies covered under group taxation, where return of the group has been filed for the latest completed tax year |
0% |
0% |
|
Other cases, including repatriation of after-tax profits by branches of foreign companies |
15% |
30% |
RETURN ON INVESTMENT IN SUKUKS [Sec. 150A, Division IB Part III First Schedule] |
|||
Received by Company |
15% |
30% |
Final Tax |
Received by an individual or an AOP, if profit is more than Rs.1 million |
12.5% |
25% |
|
Received by an individual or an AOP, if profit is less than Rs.1 million |
10% |
20% |
PROFIT ON DEBT [Sec. 150A, Division IB Part III First Schedule] |
|||
Where debt yield is up to Rs.500,000 |
10% |
Advance Tax in the case of companies Minimum Tax in other cases |
|
Where debt yield is above Rs.500,000 |
15% |
30% |
PAYMENTS TO NON-RESIDENTS [Sec. 152, Division IV Part I First Schedule & Division III First Schedule] |
|||
Royalty or fee for technical services |
15% |
30% |
Minimum Tax |
Fee for offshore digital services |
5% |
10% |
|
Contracts or related services |
7% |
14% |
|
Insurance or re-insurance premium |
5% |
10% |
|
Advertisement services to a non-resident media person relaying from outside Pakistan |
10% |
10% |
|
Execution of contract by sportspersons |
10% |
20% |
|
Any other receipt |
20% |
40% |
PAYMENTS TO PERMANENT ESTABLISHMENT (PE) OF NON-RESIDENTS [Sec. 152, Division II Part III First Schedule] |
|||
Sale / supply of goods by PE of non-resident company |
4% |
8% |
Minimum Tax |
Sale / supply of goods by PE of other non-residents |
4.5% |
9% |
|
Rendering / providing of services by PE of non-resident company |
8% |
16% |
|
Rendering / providing of services by PE of other non-residents |
10% |
20% |
|
Rendering / providing of transport services |
2% |
4% |
|
Execution of contract other than contract for sale or services by PE of non-resident company |
7% |
14% |
|
Execution of contract other than contract for sale or services by PE of other non-residents |
7% |
14% |
PAYMENTS FOR FOREIGN PRODUCED COMMERCIALS [Sec. 152, Division II Part III First Schedule] |
|||
Payment against foreign produced advertisement commercial to non-residents |
20% |
Final Tax |
PAYMENTS FOR SUPPLY OF GOODS [Sec. 153(1)(a), Division III Part III First Schedule & Clause 24A Part II Second Schedule] |
|||
Sale of rice, cotton seed oil and edible oil |
1.5% |
3% |
Advance Tax in case of listed companies and companies engaged in manufacturing Minimum Tax for other cases |
Sale by distributors of cigarettes and pharmaceutical products and large import houses |
1% |
2% |
|
Sale of goods by FMCG distributors, which are companies |
2% |
4% |
|
Sale of goods by FMCG distributors, which are not companies |
2.5% |
5% |
|
Sale of any other goods by companies |
4% |
8% |
|
Sale of any other goods by other than companies |
4.5% |
9% |
|
No tax to be withheld for payments in case of:
|
PAYMENTS FOR SERVICES [Sec. 153(1)(b), 153(2) Division III Part III First Schedule & Division IV Part III First Schedule] |
|||
Person providing advertising services (electronic and print media services) |
1.5% |
3% |
Minimum Tax |
Persons providing transport services, freight forwarding services, air cargo services, courier services, manpower outsourcing services, hotel services, security guard services, software development services, IT services and IT enabled services as defined under Clause 133 of Part I of Second Schedule, tracking services, advertising services (other than by print or electronic media), share registered services, engineering services, car rental services, building maintenance services, services rendered by PSE and PMEL, inspection, certification, testing and training services |
4% |
8% |
|
Companies providing other services |
8% |
16% |
|
Non-company entities providing other services |
10% |
20% |
|
By export houses for services rendered for stitching dyeing, printing, embroidery, washing, sizing and weaving |
1% |
2% |
|
No tax to be withheld for payments in case of payment for securitisation of receivables by Special Purpose Vehicles to Originators. Any tax deducted by a person making payment for a Special Purpose Vehicle, on behalf of the Originator, the tax is credited to the Originator. |
PAYMENT ON ACCOUNT OF EXECUTION OF CONTRACTS [Sec. 153(1)(c) and Division III Part III First Schedule] |
|||
To companies |
7% |
14% |
Advance Tax for listed companies Minimum Tax for non-listed companies |
To sportsperson |
10% |
20% |
Minimum Tax |
To others |
7.5% |
15% |
PAYMENT OF ROYALTY TO RESIDENT PERSONS [Sec. 153b and Division IIIb Part III First Schedule] |
|||
On gross amount of royalty |
15% |
30% |
Advance Tax |
EXPORTS [Sec. 154, Division IV Part III First Schedule & Clause 47C Part IV Second Schedule] |
|||
At the time of realisation of proceeds on export of goods (Exemption to cooking oil or vegetable ghee exported to afghanistan if tax u/Sec. 148 is paid) |
1% |
Final Tax Exporters may opt at the time of filing of return that the tax collected to be treated as Minimum Tax |
|
Indenting commission on realisation of proceeds on account of commission to indenting agent |
5% |
||
Inland back to back LC by exporter on sale of goods under inland back to back LC or any other arrangement as may be prescribed by FBR |
1% |
||
Export of goods by units located in EPZ |
1% |
||
Payment for a firm contract by direct exporters or export houses registered under DTRE Rules, 2001 to an indirect exporter as per the said Rules. |
1% |
PROPERTY INCOME / RENTALS [Sec. 155, Division V Part III First Schedule] |
||||
To Companies |
15% of the gross amount of rent |
Advance Tax |
||
To Individuals & AOPs |
Annual Rent (Rs.) |
Tax Rate |
||
From |
To |
|||
Up to 200,000 |
Nil |
|||
200,001 |
600,000 |
5% of the amount exceeding Rs.200,000 |
||
600,001 |
1,000,000 |
Rs.20,000 + 10% of the amount exceeding Rs.600,000 |
||
1,000,001 |
2,000,000 |
Rs.60,000 + 15% of the amount exceeding Rs.1,000,000 |
||
2,000,001 |
4,000,000 |
Rs.210,000 + 20% of the amount exceeding Rs.2,000,000 |
||
4,000,001 |
6,000,000 |
Rs.610,000 + 25% of the amount exceeding Rs.4,000,000 |
||
6,000,001 |
8,000,000 |
Rs.1,110,000 + 30% of the amount exceeding Rs.6,000,000 |
||
Above Rs.8,000,000 |
Rs.1,710,000 + 35% of the amount exceeding Rs.8,000,000 |
PRIZES AND WINNINGS [Sec. 156, Division VI Part III First Schedule] |
|||
Prize on prize bonds and crossword puzzle |
15% |
30% |
Final Tax |
Winning from a raffle, lottery, prize on winning a quiz or prizes related to companies’ sales promotion schemes |
20% |
40% |
PETROLEUM PRODUCTS [Sec. 156A, Division VIA Part III First Schedule] |
|||
Commission or discout to petrol pump operators on petroleum products |
12% |
24% |
Final Tax |
WITHDRAWAL OF BALANCE UNDER PENSION FUND [Sec. 156B] |
||
Withdrawal before retirement age |
Average rate of tax for 3 preceding years or rate applicable for the year whichever is lower |
Final Tax (Separate Block of Income) |
Withdrawal in excess of 50% of accumulated balance at or after the retirement age |
CASH WITHDRAWAL FROM BANKS [Sec. 231A, Division VI Part IV First Schedule & Clause 28B Part II Second Schedule] |
|||
Exchange company, duly licensed and authorised by SBP, subject to specified conditions |
0.15% |
Advance Tax |
|
Cash withdrawals from Pak Rupees bank accounts where foreign remittances credited directly such accounts |
Exempt |
Exempt |
Exempt |
Other cases where total withdrawals in a day exceeds Rs.50,000 from all bank accounts |
Exempt |
0.6% |
Advance Tax |
TRANSACTIONS IN BANKS – Banking Instrument purchased against payment in cash [Sec. 231A, Division VIA Part IV First Schedule] |
|||
Sale against cash of any instrument including demand draft, payment order, CDR, STDR, RTC or any other instrument of bearer nature except payment is made throuh a crossed cheque |
Exempt |
0.6% |
Advance Tax |
TAX ON MOTOR VEHICLES [Sec. 231B, 234 Division VII Part IV First Schedule & Division III Part IV First Schedule] |
|||
Tax on purchase / transfer of motor vehicles along with annual motor vehicle tax (Not applicable to Federal, Provincial and Local Govts., Foreign Diplomatic Missions in Pakistan) |
Various rates based on engine capacity |
Advance Tax |
|
On value of motor vehicle leased by Leasing Companies, Scheduled Banks, Investment Banks, DFIs or Modarabas |
0% |
4% |
BROKERAGE & COMMISSION [Sec. 233, Division II Part IV First Schedule] |
|||
Advertising Agents |
10% |
20% |
Minimum Tax |
Life Insurance Agents where commission received is less than Rs.0.5 million per annum |
8% |
16% |
|
Others |
12% |
24% |
COLLECTION OF TAX BY STOCK EXCHANGES IN LIEU OF TAX ON COMMISSION [Sec. 233A, Division IIA Part IV First Schedule] |
|||
On purchase of shares |
0.02% |
0.04% |
Advance Tax |
On sale of shares |
0.02% |
0.04% |
COLLECTION OF TAX BY NCCPL FROM MEMBERS OF STOCK EXCHANGES [Sec. 233AA, Division IIB Part IV First Schedule] |
||
In respect of financing of carryover trade, margin financing, margin trading nor securities lending in shares business |
10% |
Advance Tax |
CNG STATIONS [Sec. 233A, Division VIB Part IV First Schedule] |
|||
On the amount of gas bill |
4% |
6% |
Minimum Tax |
ELECTRICITY CONSUMPTION [Sec. 235, Division IV Part IV First Schedule & Clause 66 Part IV Second Schedule] |
||
Electricity bil of commercial or industrial consumers [Exporters-cum-manufacturers are exempt from this collection] |
Various rates |
Minimum Tax (for non-corporate taxpayers upto Rs.360,000) Advance Tax (for other cases) |
DOMESTIC ELECTRICITY CONSUMPTION [Sec. 235A, Division XIX Part IV First Schedule] |
||
Where the amount of monthly bill is less than Rs.75,000 |
0% |
Advance Tax |
Where the amount of monthly bill is Rs.75,000 and above |
7.5% |
STEEL MELTERS, RE-ROLLERS ETC. [Sec. 235B / Sec 153(1)] |
||
Electricity consumed for the production of steel billets, ingots and mild steel (MS products) excluding stainless steel by steel-melters, steel re-rollers, composite steel units (registered for the purpose of Chapter XI of Sales Tax Special Procedure Rules, 2007) |
Rs.1 per unit of electricity consumed |
Non-adjustable / Final Tax |
TELEPHONE USERS [Sec. 236, Division V Part IV First Schedule] |
||
Mobile phone bills and prepaid telephone cards |
12.5% |
Advance Tax |
Landline bills exceeding Rs.1,000 |
10% |
|
Post-paid internet and prepaid internet cards |
12.5% |
SALE BY AUCTION [Sec. 236A, Division VIII Part IV First Schedule] |
|||
Sale of property, goods or lease of right by public auction or tender |
10% |
20% |
Advance Tax |
Sale of lease of the right to collect tolls |
10% |
20% |
Final Tax |
PURCHASE OF DOMESTIC AIR TICKETS [Sec. 236B, Division IX Part IV First Schedule] |
||
Tickets for routes of Balochistan coastal belt, Azad Jammu and Kashmir, FATA, Gilgit-Baltistan and Chitral |
Exempt |
Not Applicable |
Other routes |
5% |
Advance Tax |
SALE OR TRANSFER OF IMMOVABLE PROPERTY [Sec. 236C, Division X Part IV First Schedule] |
|||
To be collected from seller or transferor at the time of recording or attesting the transfer, where holding period of property is up to 5 years. |
1% |
2% |
Advance Tax |
To be collected from seller or transferor at the time of registering or attesting the transfer, where holding period or property is above 5 years |
0% |
FUNCTIONS & GATHERINGS [Sec. 236D, Division XI Part IV First Schedule] |
||
To be collected from a person arranging or holding a function on total amount of bill and also for food, service or facility |
5% |
Advance Tax |
Function of marriage for Islamabad, Lahore, Multan, Faisalabad, Rawalpindi, Gujranwala, Bahawalpur, Sargodha, Sahiwal, Sheikhupura, Dear Ghazi Khan, Karachi, Hyderabad, Sukkur, Thatta, Larkana, Mirpur Khas, Nawabshah, Peshawar, Mardan, Abbotabad, Kohat, Dera Ismail Khan, Quetta, Sibi, Khuzdar, Dera Murad Jamali and Turbat |
Higher of 5% of the bill ad valorem or Rs.20,000 per function |
|
For cities other than those mentioned above |
Higher of 5% of the bill ad valorem or Rs.10,000 per function |
CABLE OPERATORS AND OTHER ELECTRONIC MEDIA [Sec. 236F, Division XIII Part IV First Schedule] |
||
From IPTV, FM Radio, MMDS, Mobile TV, Mobile Audio, Satellite TV Channel and Landing Rights |
20% of the permission fee or renewal fee |
Advance Tax |
From cable operators |
Various Rates |
|
From every TV channel in respect of screening or viewing Foreign TV Drama serial or a play in any language other than English |
50% of the permission fee or renewal fee |
TAX ON SALES TO DISTRIBUTORS, DEALERS AND WHOLESALERS BY MANUFACTURERS AND COMMERCIAL IMPORTERS [Sec. 236G, Division XIV Part IV First Schedule] |
|||
On sale of fertilizers |
0.7% |
1.4% |
Advance Tax |
On sale of electronics, sugar, cement, iron & steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint, batteries or foam |
0.1% |
0.2% |
TAX ON SALES TO RETAILERS AND WHOLESALERS BY MANUFACTURERS. DISTRIBUTORS, DEALERS, WHOLESALERS OR COMMERCIAL IMPORTERS [Sec. 236H, Division XV Part IV First Schedule] |
|||
On sale of electronics |
1% |
2% |
Advance Tax |
On sale of sugar, cement, iron & steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint, batteries or foam |
0.5% |
1% |
TAX ON SALES OF CERTAIN PETROLEUM PRODUCTS [Sec. 236HA, Division XVA Part IV First Schedule] |
|||
On supply of petroleum products to a petrol pump operator or distributor |
0.5% |
1% |
Advance Tax |
COLLECTION OF TAX BY EDUCATIONAL INSTITUTIONS WHERE FEE EXCEEDS Rs.200,000 [Sec. 236I, Division XVI Part IV First Schedule] |
||
From resident |
5% |
Advance Tax |
From non-resident |
Exempt |
Not Applicable |
TAX ON DEALERS, COMMISSION AGENTS AND ARHATIS ON ISSUANCE / RENEWAL OF LICENSE [Sec. 236J, Division XVII Part IV First Schedule] |
||
To be collected by market committees |
Various rates |
Advance Tax |
PURCHASE OR TRANSFER OF IMMOVABLE PROPERTY [Sec. 236K, Division XVIII Part IV First Schedule] |
|||
On fair market value |
1% |
2% |
Advance Tax |
INTERNATIONAL AIR TICKETS [Sec. 236L, Division XX Part IV First Schedule] |
||
First / Executive Class |
Rs.16,000 per person |
Advance Tax |
Others Excluding Economy |
Rs.12,000 per person |
|
Economy |
Nil |
ALL TYPE OF BANKING TRANSACTIONS OF NON-FILER [Sec. 236P, Division XXI Part IV First Schedule] |
|||
Transactions otherwise through cash above Rs.50,000 in aggregate from all bank accounts per day |
Not Applicable |
0.6% |
Advance Tax |
RENT OR PAYMENT FOR RIGHT TO USE MACHINERY AND EQUIPMENT [Sec. 236Q, Division XXIII Part IV First Schedule] |
||
To be collected in case of industrial, commercial and scientific equipment and machinery |
10% |
Final Tax |
The deduction shall not be applicable in the following cases:
|
EDUCATION RELATED EXPENSES REMITTED ABROAD [Sec. 236R, Division XXIV Part IV First Schedule] |
||
Remittance of tuition fee, boarding and lodging expenses, payments for distant learing programmes and any other expenses related to foreign education |
5% |
Advance Tax |
ADVANCE TAX ON INSURANCE PREMIUM [Sec. 236U, Division XXV Part IV First Schedule] |
|||
General Insurance Premium |
0% |
4% |
Advance Tax |
Life Insurance Premium exceeding Rs.0.3 million per annum |
0% |
1% |
|
Others |
0% |
ADVANCE TAX ON EXTRACTION OF MINERALS [Sec. 236V, Division XXVI Part IV First Schedule] |
|||
Value of minerals extracted, produced dispatched and carried away from licensed or leased areas of mines – to be collected by provincial revenue authority / board |
0% |
5% |
Advance Tax |
ADVANCE TAX ON PURCHASE OF TOBACCO [Sec. 236X] |
|||
To be collected by Pakistan Tobacco Board or its contractor on value of tobacco purchased by a person including manufacturers of cigarettes |
0% |
5% |
Advance Tax |
ADVANCE TAX ON REMITTANCE ABROAD THROUGH CREDIT, DEBIT OR PREPAID CARDS [Sec. 236Y, Division XXVII Part IV First Schedule] |
|||
Gross amount remitted from abroad |
1% |
3% |
Advance Tax |
Table: Withholding Income Tax Rates
Customs
Goods imported and exported from Pakistan are liable to rates of Customs duties as prescribed in Pakistan Customs Tariff. Customs duties in the form of import duties and export duties constitute about 37% of the total tax receipts. The rate structure of customs duty is determined by a large number of socio-economic factors. However, the general scheme envisages higher rates on luxury items as well as on less essential goods. The import tariff has been given an industrial bias by keeping the duties on industrial plants and machinery and raw material lower than those on consumer goods.


Federal Excise
Federal Excise duties are leviable on a limited number of goods produced or manufactured, and services provided or rendered in Pakistan. On most of the items Federal Excise duty is charged on the basis of value or retail price. Some items are, however, chargeable to duty on the basis of weight or quantity. Classification of goods is done in accordance with the Harmonized Commodity Description and Coding System which is being used all over the world. All exports are exempted from Federal Excise Duty.
Sales Tax
The following personnel shall make an application in the Form STR-1, transmitted to the CRO “Central Registration Office” electronically or through registered mail or courier services for registration under Sales Tax Rules, 2006, Chapter I “Registration, compulsory Registration and De-Registration” as per following conditions:
PERSON |
CONDITION |
LIABILITY |
Manufacturer |
Value of Taxable supplies does not exceed Rs. 5,000,000 in any period during the last twelve month or whose annual utility bills does not exceed Rs 600,000 during the last 12 months. |
Supplies will be exempted under Sr. 42 of the Sixth Schedule. |
Retailer |
Value of supplies does not exceed Rs. 5,000,000 in any period during the last twelve month. |
Supplies will be exempted under Sr. 42 of the Sixth Schedule. |
Importer |
Person is liable to be Registered. |
|
Wholesaler / Supplier including Dealer and Distributor |
Person is liable to be Registered. |
Table: Sales Tax Liability Exemption
As per newly inserted Section 8B of the Act, a registered person is restricted to claim adjustment of input tax to the extent of ninety percent of output tax for that tax period. Further, it permits the adjustment of input charged in acquisition of fixed assets in twelve equal monthly installments after the start of production of a new unit. The Board is empowered to exclude any person from the above purview.
However, the input tax inadmissible in excess of 90% of the output tax, may be allowed on yearly basis in the second month following the end of the financial year of the registered person subject to the following condition namely:
In case of a registered person whose accounts are subject to audit under the Companies Ordinance, 1984 upon furnishing a statement along with annual audited accounts duly certified.
In other cases, adjustment may be allowed as per specific notification issued by the Board.
Time of Supply
Sales Tax was taxable at the earlier of the time of delivery of goods or when any payment is received by the supplier in respect of such supply. If has now been restricted only to the time of delivery of goods by the supplier irrespective of the actual time of payment.
Through newly inserted subsection (1A) of Section 23, the Board is empowered to restrict a registered person to use as many number of business bank accounts as may be specified.
As per amendment in Section 24 of the Act, retention of record and documents by a registered person has been enhanced from three years to five years.
A new concept of Withholding Agent has been introduced through SRO No 550(1)/2007, dated 30th June, 2007 wherein a withholding agent shall deduct as amount equal to one fifth (1/5th) of total sales tax shown in the sales tax invoice issued by the supplier and make payment of the balance amount to him.
Default Surcharge
For first six months 1% per month
For subsequent period till the final payment 1.5% per month
In case of tax fraud till the final payment 2% per month
Offences and Penalties
OFFENCES |
PENALTIES |
SECTION |
Non filing of returns |
Five thousand rupees within fifteen days, one hundred rupees for each day of default |
Sec. 26 |
Non issuance of invoices |
Five thousand rupees of five percent of the amount which ever is higher |
Sec. 23 |
Issuance of invoices without authority |
Ten Thousand rupees or five percent of the amount which ever is higher |
Sec. 3, 7 and 23 |
Non notification change in the particulars of registration |
Five Thousand rupees |
Sec. 14 |
Failure of deposit the amount of tax due |
Ten Thousand rupees or five percent of the amount whichever is higher Within fifteen days, give hundred rupees each day of default. No penalty for miscalculation. Non payment and imprisonment for three year or both |
Sec. 3, 6, 7 and 48 |
Repeation of miscalculation for less tax during the year |
Ten Thousand rupees or three percent of the amount whichever is higher |
|
Non filing of application registration |
Ten Thousand rupees or five percent of the amount whichever is higher Non filing after sixty days conviction and imprisonment for three years |
|
Non maintenance of records |
Ten Thousand rupees or five percent of the amount whichever is higher |
|
Non compliance with Section 25 |
Five Thousand rupees |
Sec. 25 |
Receipt of second notice |
Ten Thousand rupees |
|
Receipt of third notice |
Fifteen Thousand rupees |
|
Non filing of information required by the board |
Ten Thousand rupees |
Sec. 26 |
Filing of false documents Destruction / alteration of record Making of false statement |
Twenty Five Thousand rupees or one hundred percent of the amount whichever is higher. Conviction and imprisonment of three years or with both |
Sec. 2 (37) and General |
Obstruction of Sales Tax Officer |
Twenty Five Thousand rupees or one hundred percent of the amount whichever is higher. Conviction and imprisonment of three years or with both |
Sec. 25, 38 and 38A |
Abetment in commissioning of tax fraud |
Twenty Five Thousand rupees or one hundred percent of the amount whichever is higher. Conviction and imprisonment of three years or with both |
Sec. 2 (37) |
Violation of any embargo placed or removal of goods in connection with recovery of tax |
Twenty Five Thousand rupees or one hundred percent of the amount whichever is higher. Conviction and imprisonment of three years or with both |
Sec. 48 |
Obstructions of Sales Tax Officer |
Twenty Five Thousand rupees or one hundred percent or three percent of he amount whichever is higher |
Sec. 31 and General |
Non compliance with Section 73 |
Five thousand rupees or three percent of the amount whichever is higher |
Sec. 73 |
Non fulfillment of notification issued under any of the provisions of this Act |
Five Thousand Rupees of three percent of the amount whichever is higher |
Sec. 71 and General |
Sales Tax officer causing loss to the sales tax revenue |
Convection and imprisonment for three year or five equal to tax, or with both |
General |
Contravention with provision of this act and no penalty has been provclassed |
Five Thousand Rupees or three percent of the amount, which ever is higher |
General |
Non filing of the summary of sale or purchase invoices |
Twenty Five Thousand Rupees |
Sec. 26(5) |
Table: Offences and Penalties
Sales Tax is levied at various stages of economic activity at the rate of 15 per cent on:
All goods imported into Pakistan, payable by the importers;
All supplies made in Pakistan by a registered person in the course of furtherance of any business carried on by him; and
There is an in-built system of input tax upto 90% adjustment and a registered person can make this adjustment of tax paid at earlier stages against the tax payable by him on his supplies. The tax paid at any stage does not exceed 15% of the total sales price of the supplies.
Performing a High Quality Audit
In today’s ever changing global economy, businesses need trusted advisers. Our audit specialists take the time to understand your business as well as the industry in which you operate, whether it is in Pakistan and / or abroad.
Our audit approach focuses on understanding the clients’ business and control issues from the inside out. It combines a rigorous risk assessment, diagnostic processes, and audit testing procedures as well as a continuous assessment of our clients’ service performance. Our state of the art, audit tool, Audit System supports all phases of the audit process including planning, executing, reporting.
Investment Advisory Services
All investment carries some risk and thus needs careful analysis and expert advice. The key to be a successful investor is to achieve appropriate risk/return trade off by identification of risks that exist and their proactive management.
Our Investment Advisory Service professionals specialize in identifying risks arising from regulation, competition and macro economic forces and designing strategies to manage it to your advantage. Our range of services includes:
Advice on analyzing investment prospects and mode of doing business in Pakistan including advising on the form of legal entity, incorporation, obtaining of necessary permissions and help in dealing with local regulators.
Identification of suitable business partners and conducting due diligence.
Feasibility studies including preparation of projected financial statements and project.
Appraisal through NPV, IRR, Payback and DCF analysis including cost assessment and revenue projections.
Sensitivity analysis
Tariff and pricing studies
NOTE:
The contents as narrative above are subject to change through annual amendment.
Our Core Competencies
Collaborative Skillset
Collaborative lawyers trust the wisdom of the group; lone wolves and isolationists do not do any good anymore.
Emotional Intelligence
Distant, detached lawyers are relics of the 20th century, the market no longer wants a lawyer who is only half a person.
Technological Affinity
If you can not effectively and efficiently use e-communications, and mobile tech, you might as well just stay home.
Time Management
Virtually a substantial part of lawyers difficulties in this regard lie with their inability to prioritise their time.
What People Say About Us
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I greatly appreciate that your law firm is very careful in its preparation of petitions. In fact, the outcome of a legal fight greatly depends on how effectively a law firm has presented its case. If it fails to conceive in advance as to what it will have to face in defense, it can not prepare an effective petition. I admire that ZAFAR & ASSOCIATES – LLP are very careful in their initial step i.e. to prepare petition, around which the whole legal battle is fought.
M. Iftikhar Sheikh ~ Dhahran, Kingdom of Saudi Arabia -
We are glad to inform you the receipt of current outstanding balance in our bank account from the disputed party. Therefore we request you to arrange to close the dispute case with them as per our management decision. We would like to take this opportunity to thank you for all the support and advice to solve this matter. It was pleasure working with you all.
Rahul Meppad ~ Dubai, UAE -
Thank you for your support in this process and for your great hospitality. Your assistance has been of great importance. It was also important to see and experience the high quality of your services and your well known firm.
Magnus Greko ~ Sweden -
Thank you for your support in this process. Your assistance has been invaluable. We are looking forward to a long lasting working relationship with you. Also, thank you for hospitality during these past days.
Lothar Geilen ~ Germany -
Dear Atty. Iram Fatima: I would like to let you know that my wife came in USA last week. The U.S. Embassy Islamabad approved her visa petition in the lights of all the wonderful endeavors done by you and Mr. Birach. It was a long legal battle of about 7 years. I must say that your law firm is one of the best in the country and you are a highly professional advocate. Dr. Zafar should feel proud to have you in his crew. Finally, again I would say Thanks for all your legal services and I am your best reference.
Zubair Mufti ~ Texas, USA -
Dear Dr Zafar and Iram: Thank you very much for timely submission of the excellent opinion letter. It is very well drafted and covers the key points. We very much appreciate your excellent and timely work in preparing the legal opinion.
Mrs. Iqbal Farrukh ~ San Francisco, USA -
Dear Attorney Iram Fatima: Thanks so much for all of your kind efforts in this area and I must admit that your legal firm is the best in the country.
Zubair Mufti ~ Texas, USA -
The efficiency and effectiveness of your services are much appreciated.
James Alexander Linton Williams ~ UK -
Many thanks for this, and thank you for being so prompt. It is very appreciated.
Alex Gilchrist ~ Somerset, UK -
Thank you again for handling my case so well, I am honoured to be represented by you.
Yolanda Slabbert ~ Port Elizabeth, South Africa -
Thank you very much for your great attention to my case, I see that you’re a very serious company and I’m happy that I’ve choose you.
Sergio Lujan ~ Bogota, Colombia -
I really appreciate the help and support provided by Zafar and Associates to our company. I don’t know what to say or how to thank you, but to tell the truth your services are really the best legal services we have ever received. You are truly a professional and effective law firm.
Adnan Branbo ~ Dubai, UAE -
Thank you very much for your contribution. We will review the information and incorporate it into the International Citation Manual of Washington University Global Studies Law Review. Your help is appreciated.
Naomi Levin ~ Washington, USA -
I wanted to let you know that i got the documents. And i wanted to thank you and the whole team who worked on my case. You all did a good job thanks again.
Naima Ashraf ~ The Hague, Holland -
Thank you very much for all the work you have done to ensure that the Death in Service benefit reaches the parents of the deceased. Are they expecting this money and do they understand where it is coming from? We appreciate your assistance and excellent work.
Susan Bauer ~ London, UK -
I have no words to express my gratitude to you. People like you are very rare and I have the priviledge to know one of those. May God shower all blessings on to you and your family. I am a small man with only prayers on my lips.
Dr. Haridev Bhargava ~ Saratoga, USA -
I must say your handling of this matter has been totally sterling and I shall not have any hesitation in recommending you and your firm to others.
Rosina Ahmad ~ UK -
Good morning, I received the documents back yesterday afternoon. Thank you so much for your quick response to the job. We really appreciate it. Looking forward to working with you in the further.
Mrs. Jan Malcolm ~ Auckland, New Zealand -
Thank you very much for the case. It is just brilliant! I am so grateful that you went out of your way to help me.”
Loraine Bhan ~ Suva, Fiji -
I do appreciate highly the sense of commitment your office wishes to dedicate to the follow up of our question for information. I have transmitted the contents of your email IMMEDIATELY to the contact, together with confirmation of the highest esteem we attribute to the quality of the services rendered by ZAFAR & ASSOCIATES.
Paul Wouters ~ Istanbul, Turkey -
Thank you very much for the information and good news. I know you’ve been working too hard and I appreciate every single minute working with you all. It’s an experience to be in the team of hardworking people and I am very proud to be included.
Evangeline Williams ~ Paphos, Cyprus -
I would like to thank you for your swift and excellent service that your office recently provided us. I would definitely forward your contact information to my friends and family in reference to seeking legal matters in Pakistan. I would also inform Sean Hogan and his associates to pass on your contact information to any clients that may need assistance in the matters of law in Pakistan.
Zarar Khan ~ Miami, USA -
We are greatly impressed with your firm and the professional calibre of the partners. If acceptable, we would like to keep your firm as a reference for future projects. Please let me know.
Tanaz Pardiwala ~ Barcelona, Spain -
We are happy to inform you that we have received the original succession certificate via DHL. I want to take this opportunity to thank you for your efforts, especially Dr. Zafar, who was kind enough to handle the security deposit at the court. With our best wishes and success for the New Year, to you and your esteemed team, we remain with.
Mansur Asrar ~ Istanbul, Turkey -
I am writing to convey to you how much I appreciate your prompt service! My mother called me today and informed me that 2 lawyers from your firm visited her. It is a pleasant surprise to know that such a law firm exists in our very own country. I would definitely recommend your firm to any friend who is in need of professional legal services in Pakistan.
Naveed Ahmad ~ USA -
I am truly very impressed with the follow up of your law firm. I never thought a Pakistani firm would be so aggressive and pro-active. Do you even happen to come to NYC? If so, then please look me up here when you visit next.
Faisal Mumtaz ~ New York, USA -
I want to thank you for all services you have rendered to us. I really appreciate it and hope on further cooperation.
Petrov Andrey ~ Moscow, Russia -
With God’s help you have done a great thing for our family. Thank you so much for your diligence and expertise. We are truly grateful to God for all that is possible now. We also are looking forward to meeting you and your staff when we arrive in Pakistan next month. Please let us know if there is anything we can bring for you from the United States as a gift.
Shaukat Minhas and Colleen Davidson ~ Dallas, USA -
Your help in investigation case is well appreciated. My brother and I are ever grateful to you for obtaining the document. Thank you and god bless you and your practice team.
Kevin Lessani – Dallas – USA -
I greatly appreciate that your law firm is very careful in its preparation of petitions. In fact, the outcome of a legal fight greatly depends on how effectively a law firm has presented its case. If it fails to conceive in advance as to what it will have to face in defense, it can not prepare an effective petition. I admire that ZAFAR & ASSOCIATES – LLP are very careful in their initial step i.e. to prepare petition, around which the whole legal battle is fought.
M. Iftikhar Sheikh ~ Dhahran, Kingdom of Saudi Arabia -
We are glad to inform you the receipt of current outstanding balance in our bank account from the disputed party. Therefore we request you to arrange to close the dispute case with them as per our management decision. We would like to take this opportunity to thank you for all the support and advice to solve this matter. It was pleasure working with you all.
Rahul Meppad ~ Dubai, UAE
Tax u/Sec. 153(8A) (omitted)
Now, where NTN/CNIC is not available, the excess tax @ 2% shall not be collected.