Here’s a step-by-step guide to Pakistan sales tax registration for foreign companies:

Eligibility and Requirements

1. Foreign companies: Must have a permanent establishment or a fixed place of business in Pakistan.
2. Turnover threshold: Must have an annual turnover exceeding PKR 10 million (approximately USD 67,000).
3. Tax representative: Must appoint a tax representative in Pakistan.

Documents Required

1. Certificate of Incorporation: From the country of incorporation.
2. Memorandum and Articles of Association: From the country of incorporation.
3. Power of Attorney: Authorizing the tax representative in Pakistan.
4. Passport: Of the tax representative.
5. Utility bills: Proof of business premises in Pakistan.
6. Bank account details: In Pakistan.

Registration Process

1. Create an account: On the Federal Board of Revenue (FBR) portal, Iris.
2. Submit application: For sales tax registration, along with required documents.
3. Pay registration fee: PKR 5,000 (approximately USD 33).
4. Wait for verification: FBR will verify the application and documents.
5. Receive Sales Tax Registration Number (STRN): Once verified, the foreign company will receive its STRN.

Post-Registration Obligations

1. File monthly returns: By the 15th of the following month.
2. Pay sales tax: On taxable supplies.
3. Maintain records: Accurate and up-to-date records.

Penalties For Non-Compliance

1. Late filing fee: PKR 1,000 to PKR 20,000 (approximately USD 6.67 to USD 133.33).
2. Penalty for non-payment: Up to 2% per month on unpaid tax.
3. Imprisonment: In cases of willful evasion or fraud.

It’s essential for foreign companies to comply with Pakistan’s sales tax laws and regulations to avoid penalties and ensure smooth business operations.