Corporate Tax Rate

For tax purpose Income Tax Ordinance, 2001 makes  two categories of companies,

i.e. small companies and companies which are not small  companies.

Small Company  

Small company is neither a generic term nor a general phrase, the term is used in tax law only for imposition of lower tax on  companies which has turnover / sales of less than 250 million ( 25 Crore), less than 250 employees and  paid up capital (paid up capital plus retained earnings) of less than 50  million  ( 5 Crore).

Company Tax

Tax Rate for small companies is 25%, earlier it was 20%.

Income Tax Ordinance, 2001 defines in the following words:

―Small Company‖ means a company registered on or after the first day of July, 2005, under the Companies Ordinance, 1984 (XLVII) of
1984,which,—
(i)has paid up capital plus undistributed reserves not
exceeding [fifty] million rupees;

(ia)has employees not exceeding two hundred and fifty any time during the year

(ii) has annual turnover not exceeding two hundred 2 [and fifty] million rupees

(iii) is not formed by the splitting up or the reconstitution of company already in existence

Corporate Tax Rate

For many year corporate tax rate had been 35%, which was very high

In Pakistan for tax year 2017 and 2018 the corporate tax rate is 30% of the income of company .

Legal Text

The rate of tax imposed  on taxable income of a company, other than banking company shall be 32% for the tax year
2016, 31% for tax year 2017and 30% for tax year 2018 and onwards

KK Consultant (Smc-Pvt) Ltd is working as Tax Consultant and Financial Consultant.