Pakistan Tax Rates
Pakistan operates a progressive income tax system with rates from 0% to 35% for salaried individuals, administered by the Federal Board of Revenue (FBR). The standard corporate tax rate is 29%, and a 15-18% general sales tax (GST) applies. Pakistan's tax system is complex, with numerous withholding tax provisions and sector-specific rates. Tax reform and broadening the tax base remain key economic policy priorities.
Top Income Tax Rate
35%
Corporate Tax Rate
29%
VAT / Sales Tax
18%
Capital Gains Tax
15%
Detailed Tax Information
Income Tax Brackets
Pakistan's income tax for salaried individuals has progressive rates from 0% to 35%. Non-salaried individuals and associations of persons face slightly different rates. The first PKR 600,000 of annual income is exempt. Pakistan has a comprehensive withholding tax system with over 60 different withholding provisions covering various transactions. 'Non-filers' (those not on the Active Taxpayer List) face higher withholding rates as an incentive to register.
| Income Range | Tax Rate |
|---|---|
| Rs 0 – Rs 600K | 0% |
| Rs 600K – Rs 1.2M | 2.5% |
| Rs 1.2M – Rs 2.4M | 12.5% |
| Rs 2.4M – Rs 3.6M | 22.5% |
| Rs 3.6M – Rs 6.0M | 27.5% |
| Rs 6.0M+ | 35% |
Corporate Tax
Pakistan's standard corporate tax rate is 29%. Small companies (annual turnover below PKR 250 million) pay 20%. Banking companies pay 39% plus a super tax. A minimum tax of 1.25% of turnover applies if greater than the regular tax. The super tax at 1-10% applies depending on the sector and income level.
Standard Rate
29%
Small Business Rate
20%
Capital Gains Tax
Capital gains on securities are taxed at rates from 12.5% to 15% depending on the holding period. Real estate gains are taxed based on holding period with rates from 0% (6+ years) to 15% (1 year or less). Mutual fund capital gains have specific rates.
Rate
15%
VAT / Sales Tax
Pakistan's General Sales Tax (GST) is levied at 18% on most goods (increased from 17% in recent budgets). Services are taxed by provincial governments at varying rates (13-16% in most provinces). Essential food items, pharmaceuticals, and agricultural inputs are exempt or zero-rated. Import stage GST may be higher for certain luxury goods.
Standard Rate
18%
Cryptocurrency Tax
Pakistan has not introduced specific cryptocurrency tax legislation. The State Bank of Pakistan has not recognized cryptocurrency as legal tender. Despite this, crypto adoption is significant. The government has explored introducing regulations and potentially taxing crypto transactions, but no formal framework exists.
Tax Treaties
Pakistan has approximately 66 double taxation agreements. Key treaty relationships reflect trade and investment patterns with China, the Gulf states, and Western economies.
Treaty Network
66
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Pakistan
See how much you could save by moving here from your current country.
+$23K
Tax in United States
$24K
24.4% effective
Tax in Pakistan
$1K
1% effective
You Save
95.9%
less tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
