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Taxes
Agreement for avoidance of double taxation The Government of Pakistan has so far signed agreements to avoid double taxation with 39 countries including almost all the developed countries of the world. These agreements lay down the ceilings on tax rates applicable to different types of income arising in Pakistan. They also lay down some basic principles of taxation which cannot be modified unilaterally. The list of countries with which Pakistan has concluded tax treaties is given below: Customs Goods imported and exported from Pakistan are liable to rates of Customs duties as prescribed in Pakistan Customs Tariff. Customs duties in the form of import duties and export duties constitute about 37% of the total tax receipts. The rate structure of customs duty is determined by a large number of socio-economic factors. However, the general scheme envisages higher rates on luxury items as well as on less essential goods. The import tariff has been given an industrial bias by keeping the duties on industrial plants and machinery and raw material lower than those on consumer goods. Central Excise Central Excise duties are leviable on a limited number of goods produced or manufactured, and services provided or rendered in Pakistan. On most of the items Central Excise duty is charged on the basis of value or retail price. Some items are, however, chargeable to duty on the basis of weight or quantity. Classification of goods is done in accordance with the Harmonized Commodity Description and Coding system which is being used all over the world. All exports are exempted from Central Excise Duty. Sales Tax Sales Tax is levied at various stages of economic activity at the rate of 15 per cent on: · all goods imported into Pakistan, payable by the importers; · all supplies made in Pakistan by a registered person in the course of furtherance of any business carried on by him; · there is an in-built system of input tax adjustment and a registered person can make adjustment of tax paid at earlier stages against the tax payable by him on his supplies. Thus the tax paid at any stage does not exceed 15% of the total sales price of the supplies; Austria - Belgium - Bangladesh - Canada - China - Denmark - Egypt - France - Finland - Germany - Greece - India - Indonesia - Iran - Ireland - Italy - Japan - South Korea - Lebanon - Libya - Malta - Mauritius - Saudi Arabia - Singapore - Poland - Romania - Switzerland - Thailand - Sri Lanka - Sweden - Turkmenistan - UK. - Turkey - Tunisia - Kazakhstan - UAE. - USA.
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