Business Tax in Pakistan – Annual Tax Payable [Updated]

Sole trader / Proprietor or Business Individual

The business individual is taxed for the profits only unless turnover exceed 10 million rupees. In case exceed 10 million rupees, 1.25% of total turnover is payable.

Form of Taxation: Slab rates are applied.
Tax Return Filing: For this type, filing of annual income tax returns is a requirement.

Partnership Firm

The partnership firm is taxed for the profits only unless turnover exceed 10 million rupees. In case exceed 10 million rupees, 1.25% of total turnover is payable. While partners are not taxed separately.

Form of Taxation: Slab rates are applied.
Tax Return Filing: For this type, filing of annual income tax returns is a requirement.

Limited Liability Partnership

The partnership firm is taxed for the profits only unless turnover exceed 10 million rupees. In case exceed 10 million rupees, 1.25% of total turnover is payable. While partners are not taxed separately.

Form of Taxation: Slab rates are applied.
Tax Return Filing: For this type, filing of annual income tax returns is a requirement.

Private Limited Company

The company is taxed at higher of

1. a) taxable income @ below given rates,
2. b) turnover @ 1.25%
3. c) profits @ 17% Shareholders are taxed at 15% on dividends.

Form of Taxation/Rates: Small Company: 25%. Other than small company: 29%
Tax Return Filing: For this type, filing of annual income tax returns is a requirement.

Public Limited Company

The company is taxed at higher of

1. a) taxable income @ 30%,
2. b) turnover @ 1.25%
3. c) profits @ 17% Shareholders are taxed at 15% on dividends.

Form of Taxation: 0.29
Tax Return Filing: For this type, filing of annual income tax returns is a requirement.

Not for Profit Organization

If approved than zero, otherwise taxation of private limited company will be applicable.

Form of Taxation: Exempt if approved by tax department
Tax Return Filing: For this type, filing of annual income tax returns is a requirement.

Liaison / Branch Office

No tax is applicable.

Form of Taxation: Not applicable as commercial activity is not allowed
Tax Return Filing: For this type, filing of annual income tax returns is NOT a requirement.

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