This article provides a clear overview of the corporate tax regime in Pakistan as of 2025, detailing tax rates, the progressive framework, and the specifics regarding surcharges that may apply to high-income companies. All data provided is based exclusively on information extracted for Pakistan and is intended for international executives and professionals analyzing tax impacts for corporate structures.
Pakistan Corporate Tax System Overview (2025)
Pakistan applies a progressive corporate tax model, which assesses tax based on corporate profits denominated in Pakistani Rupees (PKR). Understanding the key components and statutory rates is essential for capital planning, compliance, and effective forecasting.
Corporate Tax Rate and Brackets
As of 2025, the standard corporate income tax rate in Pakistan for companies is 29%. Detailed rates by tax bracket are presented in the table below. Notably, only a single bracket is available for general corporate entities, indicating a flat structure at the base level.
| Taxable Income Range (PKR) | Corporate Tax Rate (%) |
|---|---|
| 0 and above | 29% |
Current data for other specific brackets or differentiated rates is not publicly available; this may reflect streamlined legislation or an annual update process.
Super Tax (Surtax) on High Corporate Incomes
For companies earning significant profits, Pakistan imposes an additional super tax. This surtax is structured progressively and applies to income exceeding PKR 150 million. The following table outlines the current (2025) rates and applicable income thresholds. Conversions to USD are provided using an exchange rate of 1 PKR ≈ 0.0036 USD for context.
| Taxable Income Range (PKR) | Taxable Income Range (USD) | Super Tax Rate (%) |
|---|---|---|
| Over 150,000,000 – 200,000,000 | $540,000 – $720,000 | 1% |
| Over 200,000,000 – 250,000,000 | $720,000 – $900,000 | 1.5% |
| Over 250,000,000 – 300,000,000 | $900,000 – $1,080,000 | 2.5% |
| Over 300,000,000 – 350,000,000 | $1,080,000 – $1,260,000 | 3.5% |
| Over 350,000,000 – 400,000,000 | $1,260,000 – $1,440,000 | 5.5% |
| Over 400,000,000 – 500,000,000 | $1,440,000 – $1,800,000 | 7.5% |
| Over 500,000,000 | Over $1,800,000 | 10% |
The super tax is calculated on profits that exceed the respective thresholds in each bracket and must be considered in addition to the standard 29% corporate tax.
Assessment Basis and Holding Periods
In Pakistan, the tax assessment is based on the corporate entity’s income, without reference to individual shareholders’ liabilities under this corporate tax regime. There are no holding period requirements or restrictions specified in the available data for 2025.
Key Considerations for Foreign and Domestic Companies
The combination of a flat standard rate and progressive super tax brackets means that large corporations with high profits are subject to additional tax burdens, which escalate quickly past the PKR 150 million threshold. Companies operating near or above these inflection points should factor super tax liability into all forward-looking financial forecasts and reporting.
Official Source
For authoritative details, consult the Federal Board of Revenue of Pakistan.
Pro Tips for Navigating Pakistan’s Corporate Tax in 2025
- Closely monitor annual profit projections if your earnings approach super tax thresholds, as incremental profits can trigger steep increases in effective tax rates.
- Review all corporate income streams for accurate reporting, including international subsidiaries, as consolidated profits may be subject to progressive surcharges.
- Stay informed with annual updates from the Federal Board of Revenue, since changes to rates, super tax brackets, or assessment methods can impact planning.
- Consider periodic external audits or tax advisory reviews for high-turnover companies to ensure compliance and optimal tax efficiency under the latest regulations.
In summary, Pakistan’s corporate tax system in 2025 consists of a flat 29% income tax for most companies, coupled with a set of super taxes for corporate incomes exceeding PKR 150 million. Large enterprises must pay close attention to the progressive nature of super tax rates as they significantly raise the effective corporate tax burden at higher profit levels. Staying proactive with planning and compliance remains crucial for sustainable operations and risk management in the Pakistani corporate landscape.