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Contact UsInternational Tax in Pakistan
Strategic advisory for cross-border transactions and foreign income. We specialize in transfer pricing, tax treaties, and international compliance for expanding global businesses.
Pakistan has signed Double Taxation Avoidance Agreements (DTAAs) with over 65 countries, providing mechanisms to prevent the same income from being taxed in both Pakistan and the source/residence country. Leveraging these treaties effectively requires detailed analysis of treaty provisions, beneficial ownership requirements, and the specific anti-avoidance rules that Pakistan has adopted in line with OECD BEPS recommendations.N Our international tax services include: transfer pricing documentation under Section 108 (mandatory for transactions with associated enterprises exceeding PKR 50 million), structuring outbound payments to minimize withholding tax through treaty application, advising on Permanent Establishment (PE) risks for Pakistani businesses operating abroad and foreign businesses with Pakistan presence, and ensuring compliance with Controlled Foreign Company (CFC) rules.N For Pakistan's growing IT export sector, we provide specialized advisory on the tax exemption for IT and IT-enabled services exports under Section 65D, including the conditions for maintaining eligibility, documentation requirements, and the interaction between this exemption and treaty provisions. Many IT companies inadvertently lose their exemption eligibility due to documentation failures - our compliance framework prevents this.N We also advise on outbound investment structuring, withholding tax on royalties and technical service fees, and the tax implications of remote working arrangements for Pakistani professionals serving foreign clients.
Why This Matters
Cross-border tax errors are costly and difficult to reverse. Improper transfer pricing documentation can trigger FBR adjustments that add 15–30% to your intercompany transaction values. Failure to apply treaty benefits means you over-withhold on payments to foreign entities, reducing your international competitiveness. For IT exporters, a single documentation gap can disqualify your Section 65D exemption - costing you the entire tax benefit on export income.
How It Works
We map your cross-border transactions and identify applicable tax treaties and domestic provisions
For transfer pricing, we prepare compliant documentation under Section 108 with benchmarking analysis
We structure outbound payments to apply treaty-based withholding tax reductions
Our team advises on Permanent Establishment risks and helps structure operations to manage PE exposure
Ongoing monitoring ensures your international tax positions remain compliant with evolving BEPS guidelines
Who This Service Is For
Key Facts & Deadlines
- Pakistan has 65+ Double Taxation Avoidance Agreements in effect
- Transfer pricing documentation mandatory for associated enterprise transactions above PKR 50 million
- IT export income exempt under Section 65D subject to conditions
- BEPS-aligned rules adopted for anti-avoidance and treaty abuse
Have Any Question?
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