Pakistan

Business Environment

Standards

National standards organizations: Pakistan Standards and Quality Control Authority (PSQCA)
Integration in the international standards network: The PSQCA is a member of:
- International Standard organization (ISO)
- International Electro-technical Commission (IEC)
- International Organization of Legal Metrology (OIML)
Classification of standards: PS [Mark of Quality]
Online consultation of standards: Visit the site of Pakistan Standards and Quality Control Authority (PSQCA)
Certification organizations: http://www.pcsir.gov.pk/">Pakistan Council of Scientific and Industrial Research (PCSIR)
http://www.pnac.org.pk/">Pakistan National Accreditation Council (PNAC)

Legal Framework

Independence of justice: Judiciary is not independent in Pakistan; it is influenced by politicians, government officials and Islamic extremists.
Equal treatment of nationals and foreigners: Foreign nationals cannot expect a fair trial from the country’s judicial system.
The language of justice: Urdu and English are the two judicial languages of Pakistan.
Having recourse to an interpreter: Possible
Sources of the law and legal similarities: The main source of the law in the country is the constitution of 1973 which has been suspended and restored with amendments many times. The country's legal system is based on English common law with provisions to accommodate Pakistan's status as an Islamic state. Pakistan accepts compulsory ICJ jurisdiction but with reservations.
Consulting national laws online: http://www.lexadin.nl/wlg/legis/nofr/oeur/lxwepak.htm">Lexadin, the world law guide
http://www.pakistanlawsite.com/pk/">LawSite.com.pk

Intellectual Property

National organizations: Intellectual Property Organisation of Pakistan (IPO-Pakistan)
Regional organizations: None
International membership

National regulation and international agreements

Type of property	Law	Validity	International agreements signed
Patent	Patents Ordinance, 2000	20 years
Trademark	Trademarks Ordinance, 2001	10 years, renewable every 10 years.	Trademark law treaty Nice agreement concerning the International classification of goods and Services for the Purposes of the registration of Marks Protocol relating to the Madrid Agreement concerning the International Registration of Marks
Design	Designs Ordinance, 2000	10 years, renewable after every 10 years.
Copyright	Copyright Ordinance, 1962	50 years
Industrial Models	Registered Layout – Designs of Integrated Circuits Ordinance, 2000	10 years

Tax Rates

Consumption taxes

Nature of the tax: General Sales Tax (GST)
Tax rate: 15% (Standard rate )
Reduced tax rate: Reduced tax rates vary between 0% and 12.5%.
Other consumption taxes: Other consumption taxes are levied at the national level and the local level, which include land tobacco tax, fuel tax, motor vehicle tax, etc.

Corporate taxes

Tax rate

Corporate tax rate Pour des détails, visitez: Bureau des recettes fédérales	Companies in Pakistan are taxed either on presumptive basis or on net taxable income basis.
Corporate tax rate under the presumptive tax regime, charged on the gross income	6%
Corporate tax rate under the net taxable income regime: the net is calculated on the basis of certain rules and regulations (whereby certain expenses are deducted from the gross income)	the net income is taxed at a rate of 35%.

Capital gains taxation: Taxed at the normal corporate rate.
Main allowable deductions and tax credit: Expenses on raw-material, wages, salaries, reasonable bonuses and commissions, rents, repairs, insurance, royalty payments, interest, dividends, lease payments, certain taxes (sales, municipal, road, property and expenditure taxes and also customs duties), depreciation, expenditures for scientific research and contributions to scientific research associations and professional fees for tax services.
Other corporate taxes: Capital duty, Payroll tax, Real-estate tax, Stamp duty, Social security, etc.

Individual taxes

Tax rate

Personal tax rate	Income tax is paid by salaried and non-salaried individuals if the taxable income exceeds PKR 150,000. For more details, visit: Central Board of Revenue
The tax rate for salaried class	between 0.25% to 20%
The tax rate for non-salaried individuals	between 0.25% to 25%.
tax rate applicable on the value of the property owned by an individual.	6%

Allowable deductions and tax credit: Deductions and tax benefits are available for non-salaried class, but not for the salaried class. Such deductions include:
Donations to charitable organizations are deductible up to a certain limit.
Individual fixed deductions: 50, 000 PKR for single employees, 60 000 PKR for wage-earning women and 40 000 PKR for the others.
50% of special deduction for people above 65 years old, with an annual income which does not exceed 200, 000 PKR.
There are other tax deduction allowances according to the status of each.
Special expatriate tax regime: No special expatriate tax regime exists in Pakistan.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: See the list of the convention signed on the website of the Federal Board of Revenue.
Whithholding taxes: Dividends:7.5%/10%, Interest: 10%, Royalties: 15%/30%

Sources of fiscal information

Tax Authorities: Federal Board of Revenue
Other domestic resources: http://www.finance.gov.pk/">Ministry of Finance, Pakistan

Accounting Rules

Tax year: The fiscal year begins on January 1st and ends on December 31st of the same year.
Accounting standards: The accounting standards in Pakistan are based on: "International Accounting Standards Committee (IASC)”.

While Pakistan adheres to 38 of 41 international accounting standards it does not yet apply IAS 15, IAS 29, and IAS 41 .
Accounting regulation bodies: http://www.icap.org.pk">Institute of Chartered Accountants of Pakistan
http://www.icmap.com.pk">Institute of Cost and Management Accountants of Pakistan
Pakistan Institute of Public Finance Accounts
http://www.secp.gov.pk/">Securities and Exchange Commission of Pakistan (SEC)
Accounting reports: The Pakistani companies have to publish annually their own accounts, financials and audit reports.
Publication: The Pakistani companies have to publish annually their own accounts, financials and audit reports.
Professional accountancy bodies: http://www.icap.org.pk">Institute of Chartered Accountants of Pakistan
http://www.icmap.com.pk">Institute of Cost and Management Accountants of Pakistan
http://www.pipfa.org.pk/">Pakistan Institute of Public Finance Accounts
Certification and auditing: Institute of Chartered Accountants of Pakistan

Institute of Cost and Management Accountants of Pakistan
Pakistan Institute of Public Finance Accounts
Accounting news: http://www.accountancy.com.pk/">Accounting news in Pakistan
http://www.einnews.com/pakistan/newsfeed-pakistan-accounting">Pakistan Accounting News on einnews.com

Business Practices

For further information: Pakistani culture and customs as seen by the Kwintessential websit.
Closed hours and days: Private offices: 9h to 17h30 (Monday to Friday).

Government offices: 8h to 15h (Monday to Thursday), 8h to 12h30 (Friday) – close early due to Friday prayers, 8h to 14h (Saturday).
The private banks in Pakistan work for six days a week, with shorter working hours on Fridays and Saturdays.

Public holidays

Ashoura	19 Jan
Eid-e-Milad-un-Nabi (Birth of the Prophet)	20 March
Pakistan Day	23 March
Independence Day	14 Aug
Eid al-Fitr (End of Ramadan)	2 Oct (Varies every year).
Allama Muhammad Iqbal Day	9 Nov
Eid ul-Azha (Feast of the Sacrifice)	9 Dec (Varies every year).
Quaid-e-Azam's Birthday	25 Dec

Compensation day: No hard and fast rules exist.

Periods when companies usually close

Eid al-Fitr (End of Ramadan)

Eid ul-Azha (Feast of the Sacrifice)

Note: Muslim festivals are timed according to local sightings of various phases of the moon and the dates may change accordingly.

These two festivals may last from two to four days, depending on the region. Most of the offices (both public and private) are closed during this period.