Tax rate by region Pakistan

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Pakistan operates a dual General Sales Tax (GST) system where a standard 18% rate applies to goods under the Federal Board of Revenue (FBR), while local services are taxed at 15% to 16% by provincial revenue authorities. For cross-border digital trade, non-resident suppliers must register via the FBR Iris portal and account for tax starting from their very first sale, as the country does not utilize a reverse charge mechanism for these transactions. Compliance operates on a strict monthly cycle with returns due by the 15th of the following month, further reinforced by recent rules targeting digital commerce by making e-commerce couriers liable as withholding agents.

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Pakistan

Pakistan operates a VAT-style General Sales Tax (GST) introduced via the Sales Tax Act, 1990. Standard rate is 18% on goods; services attract 15-16%. The Federal Board of Revenue (FBR) administers GST on goods; provincial revenue authorities (PRA, SRB, KPRA, BRA) handle services.

Official government link: Federal Board of Revenue (FBR)

18.00%

E-products and services VAT/Sales tax rate

Tax applicable for

B2B and B2C

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

After the first sale

Online registration possible

Yes 

Local representative needed

Not mandatory 

Registration procedure

Register via FBR IRIS portal (e-registration); provincial registration may be required for services (PRA/SRB/KPRA/BRA)

List of digital and electronic services liable for tax

Digital products

Registration threshold

First sale

Filing interval

Monthly

Filing deadline

15th day of the month following the reporting month

E-invoicing requirements

Yes

Record keeping

6 years 

How-To Guides: Pakistan SaaS VAT

Step: 1 Threshold

PKR 0 (Zero).

 

Threshold rules vary by jurisdiction; however, non-resident digital service providers may be required to register or comply regardless of turnover under digital services or significant economic presence rules.

Step: 2 Business Registration

Registration obligations depend on the nature of the supply (B2B vs B2C), the applicable jurisdiction (federal or provincial), and whether the supplier meets significant economic presence criteria.

Step: 3 TIN/VAT Number

 A National Tax Number (NTN) and a Sales Tax Registration Number (STRN) is issued via the IRIS portal.

Step: 1 Standard Rate

Rates vary by jurisdiction (e.g., 13%–16% for provincial services and 18% for federal/ICT).

Step: 2 Rate Formula

To calculate your tax amounts, use the following formula:

 

Tax Amount = Net Price x Rate %

 

Step: 3 Reverse Charge (B2B)

Applies. For B2B cross-border SaaS, the Pakistani business recipient is typically responsible for withholding and self-assessing the tax (Reverse Charge). However, foreign providers must still register if they have a “significant digital presence.”

Step: 1 Selling B2C

Foreign SaaS providers may be required to register and collect tax on B2C supplies, particularly where significant economic presence or digital services rules apply.

Step: 2 Selling B2B

If the buyer is a registered taxpayer, tax is typically withheld or self-assessed under reverse charge or withholding mechanisms.

Step: 3 Invoice Requirements

(Applicable to registered taxpayers)

Must include:
• Supplier & Buyer Name/Address
• NTN/STRN of both parties
• Unique Sequential Invoice Number
• Date of Issue
• Description of SaaS service
• Value exclusive of tax
• Tax Rate and Amount
• Total Amount (PKR)

Step: 1 Filing Interval

Taxes are filed monthly.

Step: 2 Filing Deadline

Sales Tax Return (Annexure-C) are to be filed by the 10th, Payment by the 15th, and final submission by the 18th of the following month.

Step: 3 Submission

Electronic filing via the FBR IRIS Portal or provincial portals (e.g., e.srb.gos.pk). Payment via e-payment (ADC) or at National Bank of Pakistan branches.

Step: 4 Record Keeping

Records and invoices must be maintained for minimum of 6 years.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Pakistan’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

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