Historical tax information: This page includes information labeled for Tax Year 2025, while the current Pakistan tax year is 2027. Rates and deadlines may have changed. Verify the applicable year and rules with the Federal Board of Revenue before relying on this information.
Income Tax Ordinance 2001 Section 4, Section 4C & Section 113

Corporate Tax in Pakistan: Business & SME Taxation

Strategic tax counsel for Private Limited entities, Public Listed corporations, and Association of Persons (AOPs). We manage statutory corporate tax liabilities (29%), Super Tax under Section 4C, Minimum Turnover Tax under Section 113, and quarterly advance tax instalments under Section 147.

Statutory Corporate Rate: 29% Small Company Rate: 20% (Section 2(59A)) Filing Cut-off: December 31
Direct Corporate Tax Answer

Under the Income Tax Ordinance 2001, corporate entities in Pakistan are subject to a statutory income tax rate of 29% on net taxable profits. Qualifying "Small Companies" (capital ≤ PKR 50M, turnover ≤ PKR 250M, employees ≤ 250) benefit from a reduced 20% rate. Furthermore, high-earning entities with income exceeding PKR 150 million face progressive Super Tax under Section 4C ranging from 1% to 10%. Regardless of profit or loss, all business entities are subject to Minimum Turnover Tax under Section 113 (standard 1.25%).

Legal Statutes: Sections 4, 4C, 113, 113C, 147, and First Schedule, Part I, Division II of ITO 2001.

1. Corporate Tax Regimes & Rate Comparison

Corporate tax planning in Pakistan requires determining the exact statutory classification of the enterprise. Below is the statutory structure for Tax Year 2025:

Entity Classification Statutory Criteria Standard Tax Rate
Standard Corporate Entity Private Limited (Pvt Ltd) and Public Limited companies 29% on taxable income
Small Company (Section 2(59A)) Paid-up capital ≤ 50M, turnover ≤ 250M, employees ≤ 250 20% concessionary rate
Association of Persons (AOP) Partnership firms registered under Partnership Act 1932 Progressive slabs (up to 35% under Div I)
Banking Companies Scheduled commercial banks licensed by SBP 39% statutory rate

2. Super Tax on High-Earning Entities (Section 4C)

The Finance Act codified the permanent application of Super Tax under Section 4C on high-earning companies, banking corporations, and commercial partnerships based on their income quantum:

PKR 150M to PKR 200M: 1% Super Tax
PKR 200M to PKR 250M: 2% Super Tax
PKR 250M to PKR 300M: 3% Super Tax
PKR 300M to PKR 350M: 4% Super Tax
PKR 350M to PKR 400M: 6% Super Tax
PKR 400M to PKR 500M: 8% Super Tax
Exceeding PKR 500 Million: 10% Super Tax (Maximum Bracket)

3. Quarterly Advance Tax Obligations (Section 147)

Every corporate taxpayer and individual whose latest assessed turnover exceeds statutory thresholds must pay advance tax in four equal quarterly instalments:

Q1

First Quarter Instalment — Due September 15

Computed using statutory formula based on estimated annual turnover or previous assessed tax ratio.

Q2

Second Quarter Instalment — Due December 15

Reconciled against half-yearly commercial performance and advance withholding tax deductions.

Q3

Third Quarter Instalment — Due March 15

Mandatory adjustment for major revenue shifts or revised turnover projections.

Q4

Fourth Quarter Instalment — Due June 15

Final fiscal year-end advance payment before statutory annual audit finalization.

Mandatory Corporate Filing Notice: All companies registered under the Companies Act 2017 must file audited financial statements accompanied by the statutory return on FBR Iris by December 31 following the close of the financial year. Failure to file incurs automatic Section 182 penalties and forfeiture of business loss adjustments.