Asia-Pacific · Tax guide

Pakistan

Pakistan taxes companies at 29%, with a 1.25% minimum tax on turnover and super tax on high earners. Sales tax on goods is 18%, collected federally, while each province taxes services. Digital invoicing is being phased in and withholding applies to many payments. Federal taxes are administered by the Federal Board of Revenue (FBR).

Updated 1 October 2026 · 8 of 9 figures checked against official sources

Check your obligations

At a glance

Corporate income tax: 29%
Minimum tax: 1.25%
Sales tax on goods: 18%
Sales tax on services: 15% to 16% depending on the province
Withholding on royalties abroad: 15%
Withholding on dividends: 15%

Income tax

Companies pay 29% on taxable income, or a minimum tax of 1.25% of turnover if higher, plus super tax: 8% on income above Rs 500 million (10% on income above Rs 150 million for banks, petroleum and fertilizer companies). The tax year ends on 30 June; quarterly advance tax is paid and the annual return is filed by 31 December for a June year-end.

Individuals in business and associations of persons pay progressive rates up to 45%.

Sales tax on goods and services

Sales tax on goods is 18%, registered with the FBR and filed monthly by the 18th. Services are taxed by the provinces at 15% to 16% depending on the province, each with its own registration. Importers, wholesalers and large retailers must register whatever their turnover; cottage-industry manufacturers below Rs 8,000,000 can stay unregistered.

Sales-tax registered businesses must issue digital invoices integrated with the FBR's system, and large retailers must link their point-of-sale systems.

Withholding tax

Companies and larger businesses are withholding agents: they deduct tax from payments for goods, services, contracts, rent and salaries. Payments to non-residents carry 15% on royalties and technical fees, and dividends carry 15%, unless a treaty lowers them. Being on the FBR's Active Taxpayers List matters: non-filers face much higher withholding.

Key dates

By the 18th of each monthFederal sales tax return
Within seven days of month-endDeposit of tax withheld
QuarterlyAdvance income tax
31 DecemberCompany income tax return for a June year-end

Figures and sources

9 figures

Corporate income tax rate (companies other than banks)29%

Income Tax Ordinance, 2001, First Schedule, Part I, Division II · First Schedule, Part I, Division II
Checked against the official source
Minimum tax on turnover1.25%

Income Tax Ordinance, 2001 · s.113
Checked against the official source
Sales tax on goods18%

Sales Tax Act, 1990 · s.3
Checked against the official source
Provincial sales tax on services15% to 16% depending on the province

Provincial sales tax on services Acts (Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan) and ICT (Tax on Services) Ordinance, 2001
Under professional review
Withholding on royalties and fees for technical services paid to non-residents15%

Income Tax Ordinance, 2001 · s.152(1)
Checked against the official source
Withholding on dividends15%

Income Tax Ordinance, 2001 · s.150
Checked against the official source
Super tax on high earners (section 4C)8% on income above Rs 500 million (10% on income above Rs 150 million for banks, petroleum and fertilizer companies)

Income Tax Ordinance, 2001 · s.4C
Checked against the official source
Top rate for non-salaried individuals and AOPs (before the 10% surcharge on income above Rs 10 million)45%

Income Tax Ordinance, 2001, First Schedule, Part I, Division I · First Schedule, Part I, Division I, clause (1)
Checked against the official source
Annual turnover below which a cottage-industry manufacturer need not register for sales taxRs 8,000,000

Sales Tax Act, 1990 (cottage industry definition)
Checked against the official source

Indicative only. This assessment is a high-level overview of tax obligations in Pakistan based on the information you provided and rules in force for 2026. It is not tax or legal advice. Consult a qualified tax adviser in Pakistan (a chartered accountant or tax practitioner) before making compliance decisions.