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General Sales Tax / Value-added tax (VAT) in Pakistan!

Pakistani sales tax registration

Suppliers of taxable transactions can register for sales tax via an online portal, FBR, and will generally require a face-to-face meeting with the tax office. For the application, the following is required:

Business names
Address
Bank accounts
Tax identification of directors and owners
Passports of directors

Failure to register may result in fines of PKR10,000 and 5% of the Sales Tax not declared.

There is no scope for group sales tax registrations. There is also no scope for voluntary registration for federal sales tax. However, provinces will permit voluntary sales tax registrations.

What is the Pakistani sales tax registration threshold?

The Pakistani sales tax registration threshold is nil. Businesses with a turnover below PKR 1million may apply for a simplified tax regime.

Non-resident traders operating in Pakistan

Non-resident businesses may not register for Sales Tax.

Our Services

Registered your Business in Sales tax (Sales Tax Registration Number).
Preparation and e-file monthly /annual sales tax returns(Sales Tax Compliance).
Assist you in replying Sales Tax Notices.
Assist you in Sales Tax Audit by Sales Tax Department (Government).
Synchronize your sales invoices with FBR Sales System using our best Point of Sales system.

General sales tax in pakistan

General Sales Tax is ordinarily levied at 18% on the value of goods, unless specifically exempt or subject to sales tax at a reduced rate, after allowing related input credits.
Sales tax on services is levied by all four provinces, Islamabad Capital Territory, Gilgit-Baltistan, Azad Jammu, and Kashmir at rates ranging from 13% to 16%.
Sales tax paid on services, federal sales tax on goods, and federal excise duty are adjustable against each other, with a few exceptions.
Supplies made by certain specific persons/sectors are subject to specific sales tax regimes (e.g. retail price/fixed tax regime) or otherwise subject to reduced rates of sales tax.
Commercial import of goods is subject to VAT at 3%, in addition to the sales tax payable at the standard rate at the import stage.
Local supplies made by persons operating in the five export-oriented sectors (textile, leather, footwear, surgical goods, sport goods) are subject to sales tax at an applicable rate of 18%, with reduced rate facility available in certain cases.
Federal excise duty (FED) is leviable on certain types of manufacturing, import of goods, and rendering of services at varying rates. Sales tax on services, which is a replacement of FED, under the constitution, is to be levied and collected by the provinces on services rendered within their jurisdictions.

Pakistan sales tax rates
Rate	Supplies
18%	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 plant 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

Pakistani sales tax registered businesses must produce a tax invoice. Simplified invoices are permitted for retail sales. Invoices should include the following details:

Name, address of the supplier
Tax number of the supplier
Name, address of the customer
Date of supply
Unique invoice number
Description of the goods or services provided
Sales tax rate, amount charged and gross amount of the invoice
Foreign currency amount must be translated into PKR at a public exchange rate.

Time of supply rules in Pakistan

Sales tax becomes due at the time of supply. For services, this is generally the earlier of when the taxable supply is provided, or payment made. For goods, it is generally the point when the invoice is settled with a payment.

Tax on imports is due at the time of customs clearance into Pakistan.

KRC