Pakistani sales tax rates and sales tax compliance

Updated on July 19, 2022

Sales tax rates in Pakistan

17 percent is Pakistan’s normal sales tax.

Exporters and some financial service providers can request a suspension of the Sales Tax.

There is no import sales tax on certain fundamental commodities and agricultural supplies imported into Canada.

In order to prevent fraud, a 20% anti-fraud measure may be implemented on some clients, mainly those who are paid by public entities.

Also, advertising services provided by non-resident vendors are subject to the same restrictions. The taxpayer is required to be a Withholding Agent in these situations.

The following are the current rates:

Pakistan sales tax rates

Rate Supplies
17% Goods: supplies of goods, including imports. There is an additional 1% levied where the customer is a non-Sales Tax registered consumer.
16%, 15% and 13% Services: banking; construction; shipping; telecoms (17%); advertising; specialist advice and consulting; outsourced businesses services; event organisation and related services; temp or contract employees; hotel and restaurants.
10%, 8%, 5%, 3% Local imports and produce for export. Sugar. Certain plants and machinery.
18.5% to 25% Various other specific supplies, including metals, chemicals, and petroleum products
0% Exports; office stationery
Exempt Pharmaceuticals; books and newspapers; agriculture produce; medical supplies

 

Pakistani sales tax compliance

All tax-registered enterprises in Pakistan are required to issue a tax invoice. For retail sales, simplified invoices are authorized. A customer’s invoice should include the following:

Information about how to get in touch with the vendor.
Taxpayer Identification Number (TIN).
Buyer’s place of birth and postal address
When and where were the goods delivered?
Product or service offerings
The total revenue, tax rate, and amount due are all included.
There must be a transparent exchange rate in order for a currency sum to be converted into Pakistani rupees.

Time of supply rules in Pakistan

Upon the provision of a good or service, sales tax is required. Taxable supplies are generally supplied or paid for at this point. For services, this is typically the earlier of the two. In the case of goods, this is the point at which the invoice is paid in full.

Imports into Pakistan are subject to tax at the moment of customs clearance.