Business Tax in Pakistan
Business tax is a type of tax levied on businesses or persons engaged in business. The tax rate for businesses is determined by the nature and size of the business, as well as the location of the business. In Pakistan, there are three categories of business tax: federal excise duty (FED), value-added tax (VAT), and provincial sales tax (PST).
How to File Sales Tax Return in Pakistan?
Pakistan’s sales tax system is based on the value-added tax (VAT) principle. VAT is levied on the sale of most goods and services at each stage of production and distribution. The businesses that are registered under the sales tax are required to file monthly, quarterly or annual sales tax returns, depending on their turnover.
Sales tax return is a document used to declare the taxable supplies made by a business during a certain period of time. This return must be filed with the Federal Board of Revenue (FBR) every month, quarter or year, depending on the turnover of the business. The main purpose of filing a sales tax return is to pay the correct amount of tax due.
If you are registered for sales tax in Pakistan, you must file your return electronically through the FBR’s e-filing portal. You can also file your return manually by visiting your nearest Taxpayer Service Center (TSC).
Corporate Tax vs Sales Tax
When it comes to business taxes, there are two main types: corporate tax and sales tax. So, which one is better for businesses in Pakistan?
Corporate tax is a tax that is levied on the profits of a company. This means that if a company makes a profit, it will be taxed at the corporate tax rate. The corporate tax rate in Pakistan is 30%.
Sales tax, on the other hand, is a tax that is levied on the sale of goods and services. This means that businesses will have to pay taxes on the revenue they generate from selling their products and services. The sales tax rate in Pakistan is 17%.
So, which one is required for businesses in Pakistan? Well, it depends. If a business makes any profit, then corporate tax must be paid to the authorities. If a business generates revenue by selling taxable goods or services to the local buyers, this business must be registered and collect sales tax.
How to find a business tax expert in Pakistan?
There are many business tax experts in Pakistan that can help you with your tax needs. You can find them by searching online or by asking around. Once you find a few potential candidates, be sure to ask them about their experience and qualifications. You should also ask for references from past clients. When you have a shortlist of candidates, you can then compare their rates and services to find the best fit for your business.