From the buzzing urban life of Karachi and Lahore to the serene beauty of Hunza and the Swat Valley, Pakistan offers a rich mix of experiences for those ready to embrace something new.
In this guide, we’ll walk you through everything you need to know about relocating to Pakistan from a personal tax perspective, including tax residency, income tax, special tax regimes and tax return obligations.
TaxPilot recommend that you organize your affairs in good time to get ahead and make the most of favorable tax treatment while making sure you’re meeting your tax return obligations.
Pakistan follows a residence taxation model. If you are resident, you will pay tax worldwide incomes. If you are non-resident, you will pay tax on local incomes only.
if you are present in Pakistan on more than 182 days during the tax year.
if you are a citizen of Pakistan unless you are tax resident overseas.
Providing that you are residing in Pakistan solely for employment purposes for a period of no more than three years, foreign incomes and gains will be exempt from Pakistan taxation providing that the incomes and gains are not remitted to Pakistan. Pakistan can be a very tax efficient place to live for expats and nomads and as such, Global Tax Consulting recommends seeking personalized tax planning advice to take advantage of the special tax regime.
Exempt from Pakistan taxation.
Applied for three years.
Tax on property and share sales
Tax on value of owned assets
Tax on assets passed to heirs
Tax to contribute to state welfare
If you receive incomes overseas while you are living in Pakistan, you may find the source country, as a starting point, continues to tax the income which may cause double taxation unless you are using special tax regime.
Double taxation agreements can be used to mitigate double taxation and receive tax free income. As such, the more double taxation agreements a country has, the better, as agreements will ensure you’re not taxed twice and even better, ensure your income is tax free.
At present, Pakistan has 66 double taxation agreements signed.
