Corporate - Branch income

Last reviewed - 17 January 2023

The rates of tax for a branch of a company incorporated outside Pakistan are the same as those applicable on resident companies, other than banking companies. Tax at the rate of 15% is levied on the transfer of after-tax profits by a branch to the head office, with an exception for companies engaged in the oil and gas exploration and production business.

Payments to a branch in Pakistan of a non-resident are subject to deduction of tax at source primarily on the same basis as a resident in the case of sale of goods, rendering of professional services, and execution of contracts. In other circumstances, a reduced / 0% WHT certificate can be obtained from the Commissioner of Income Tax, in case the said WHT is not subject to the minimum tax regime.

Pakistan has presently executed agreements for avoidance of double taxation with 66 countries.