As per Lawkidunya, Income tax regulations for foreigners in Pakistan are governed by the Income Tax Ordinance, 2001. Here are the key aspects:

Taxation of Foreigners in Pakistan

– Tax Residency: A foreigner is considered a tax resident in Pakistan if they’ve been present in the country for at least 183 days in a tax year.
– Taxable Income: Foreigners are taxed on their Pakistan-source income, including income received or deemed to be received in Pakistan.
– Tax Rates: Tax rates for foreigners vary depending on their income level, with rates ranging from 5% to 35%.

Foreign Tax Relief and Tax Treaties in Pakistan

– Foreign Tax Relief: Pakistan provides foreign tax relief to residents who have paid foreign income tax on their foreign-source income.
– Tax Treaties: Pakistan has executed tax treaties with over 66 countries to eliminate double taxation and fiscal evasion.

Withholding Tax Requirements For Foreigners in Pakistan

– Withholding Tax: Withholding tax is applicable on payments made to foreigners, including salaries, dividends, and interest.

Other Provisions For Foreigners in Pakistan

– Exemptions: Certain exemptions are available to foreigners, including exemptions under international agreements and diplomatic exemptions.
– Compliance Requirements: Foreigners must comply with various requirements, including filing tax returns and obtaining a National Tax Number (NTN).