Business, Sales Tax & SECP: Frequently Asked Questions
12 questions and answers on Pakistani tax law. Use the search box to find your question.
12 questions
What is required to register a Private Limited Company with SECP and FBR?
Company incorporation involves reserving a corporate name on SECP eServices portal, submitting Memorandum & Articles of Association with minimum 2 directors (or 1 for SMC-Pvt Ltd), receiving the SECP Incorporation Certificate, obtaining a corporate FBR NTN, and registering for Provincial Sales Tax on Services (SRB in Sindh, PRA in Punjab, KPRA in KP).
What are the new compliance rules for online marketplaces and COD couriers under S.R.O. 1775(I)/2025?
S.R.O. 1775(I)/2025 introduces Rule 38A under Section 165C requiring e-commerce platforms to submit monthly Form A-1 and A-2 statements on seller profiling and transactions. Payment gateways must file quarterly Form 11, and COD courier services must file quarterly Form II on cash collections and returns.
What is the POS integration requirement for retailers under S.R.O. 2071(I)/2025?
Under S.R.O. 2071(I)/2025, retailers whose deductible withholding tax under Sections 236G or 236H exceeds PKR 100,000 or PKR 500,000 are statutorily required to integrate their POS electronic invoicing systems directly with FBR for real-time monitoring.
What is the 25% investment tax credit for industrial undertakings under Section 65G?
Section 65G provides a 25% investment tax credit on eligible capital investments (new machinery, industrial buildings, hardware/software) for greenfield industrial undertakings and renewable energy equipment manufacturers, with a 2-year carry forward facility.
What advance tax applies to public auctions and tenders under Section 236A?
Section 236A requires auctioning authorities to collect advance tax from successful bidders at First Schedule Division VIII rates. Tax collected on toll collection leases is treated as final tax, while other auction tax is adjustable.
What is the withholding tax on directorship fees under Section 149(3)?
Under Section 149(3), companies must deduct 20% tax at source from the gross amount payable to directors for directorship fees or board meeting attendance allowances. The tax is adjustable in the director’s return.
What are the main tax rates under the Sindh Agricultural Income Tax Act 2025?
The Sindh Agricultural Income Tax Act 2025 levies First Schedule slab rates from 0% (up to 600k) to 45% (>5.6M), plus Second Schedule Super Tax ranging from 1% (150M-200M) up to 10% (>500M) on high net farming income.
What disallowances apply under Section 21(q) and Section 21(s)?
Section 21(q) disallows 10% of purchase expenses attributable to non-NTN vendors (except direct farmers), while Section 21(s) disallows 50% of claimed business expenses for sales exceeding PKR 200,000 received in cash or non-digital means.
What is the default surcharge rate under Section 205 for tax payment delays?
Section 205 levies default surcharge at 12% per annum or KIBOR + 3% per annum (whichever is higher) on late tax payments, advance tax shortfalls below 90% (Section 147), and un-deposited withholding tax (Section 160).
Q9: Can an individual member deduct an AOP's business loss from their personal income?
No. Under Section 59A(4)(a), individual members are strictly barred from setting off or carrying forward an AOP's loss against their personal income.
Read the full guide: AOP Taxation in Pakistan: Section 88 & 92 Guide →
Q10: How are business losses handled by the AOP itself?
Under Section 59A(3) and Section 57, an AOP's business loss can only be set off against its own future business profits and carried forward for up to six succeeding tax years.
Read the full guide: AOP Taxation in Pakistan: Section 88 & 92 Guide →
Q16: How is tax liability handled when an AOP dissolves or discontinues business?
Under Section 98B, all former members of a dissolved AOP remain jointly and severally liable for any unpaid tax dues of the AOP.
Read the full guide: AOP Taxation in Pakistan: Section 88 & 92 Guide →
General information only, based on Pakistani tax law at the time of writing. It is not tax advice. See our disclaimer.
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