How company tax is worked out
The calculator applies the Division II rate for the company type to taxable income. It then works out minimum tax as the Division IX percentage of turnover. Section 113(2)(b) makes the company pay the minimum tax "instead of the actual tax payable" where normal tax is lower, so the calculator takes the higher of the two. Super tax under section 4C is added last, because the Explanation to section 113(1) leaves tax under section 4C out of "tax payable or paid" for the minimum tax comparison.
Division II rates
| Type of company | Tax year 2025 | Tax year 2026 | Tax year 2027 |
|---|---|---|---|
| Banking company | 44% | 43% | 42% |
| Small company | 20% | 20% | 20% |
| Any other company | 29% | 29% | 29% |
How minimum tax relates to normal tax
Section 113(1) applies to a resident company and a permanent establishment of a non-resident company where, because of a loss for the year, set-off of an earlier loss, exemption, credits or rebates, or allowances and deductions including depreciation, no tax is payable or paid, or the tax is less than the Division IX percentage of turnover. Under section 113(2), turnover is then treated as the income chargeable to tax, and the company pays the minimum tax computed at the Division IX rates.
Section 113(2)(c) says that where the tax paid under section 113 exceeds the actual tax payable under Division II, the excess is carried forward for adjustment against tax liability under that Part of the following tax year. Its first proviso carries forward the whole amount where no tax was payable or paid for the year. Its second proviso limits the adjustment to the two tax years immediately succeeding the year the amount was paid.
Division IX minimum tax rates
| Person | % of turnover |
|---|---|
| Any other business (all other cases) | 1.25% |
| SSGC or SNGPL (turnover above Rs 1 billion), PIA, poultry industry | 0.75% |
| Oil refineries, registered motorcycle dealers, oil marketing companies | 0.5% |
| Registered petroleum agents and distributors, rice mills and dealers, integrated Tier-1 FMCG retailers, e-commerce turnover and online marketplaces, used vehicle traders, flour mills | 0.25% |
Super tax
For tax years 2025 and 2026 super tax follows the banded table, from 1% above Rs 150 million up to 10% above Rs 500 million. For tax year 2027 the calculator uses the table substituted by the Finance Act, 2026: 10% above Rs 150 million for a banking company, income computed under Part I of the Fifth Schedule, or a person selling fertilizer, and 8% above Rs 500 million for anyone else. That table has no tax year column; this site applies it from tax year 2027. See the super tax calculator for every band.
Where the rates come from
Every rate is read from the Income Tax Ordinance, 2001 as consolidated by FBR. The rates on this page were last checked against the official text on 2026-09-26.
- Income Tax Ordinance, 2001, First Schedule, Part I, Division II, printed page 511 (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, section 2, definition of small company (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, section 4C, super tax (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, First Schedule, Part I, Division IIB, printed pages 513 and 514 (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, section 113, minimum tax (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, First Schedule, Part I, Division IX (as amended to 2026-06-30) official file
Common questions
What is the corporate tax rate in Pakistan for tax year 2027?
Division II of Part I of the First Schedule sets 29% for a company other than a banking or small company, 20% for a small company as defined in section 2, and 42% for a banking company for tax year 2027 and onwards. The banking rate was 44% in tax year 2025 and 43% in tax year 2026.
Does a company pay super tax on top of corporate tax?
Yes. Section 4C imposes super tax on the income of every person, in addition to income tax. For tax year 2027 this site applies the table substituted by the Finance Act, 2026: 10% of the whole income above Rs 150 million for banking companies, Fifth Schedule Part I income and fertilizer sellers, and 8% of the whole income above Rs 500 million for other companies.
How does minimum tax on turnover interact with corporate tax?
Section 113 applies to a resident company where, because of losses, exemptions, credits, allowances or deductions, the tax payable is less than the Division IX percentage of turnover. The company then pays the minimum tax as income tax for the year instead of the actual tax payable. Super tax under section 4C is left out of that comparison by the Explanation to section 113(1).
What happens to minimum tax paid above the normal tax?
Section 113(2)(c) carries the excess forward for adjustment against tax payable under Division II of Part I of the First Schedule, and its proviso limits the adjustment to the two tax years immediately following the year it was paid. Where no tax was payable at all, the whole minimum tax is carried forward.
What minimum tax rate does a company pay?
The Division IX table in the edition amended to 30 June 2026 sets 1.25% of turnover in all other cases, with lower rates for listed businesses such as Sui gas companies, oil refineries, oil marketing companies, rice mills and flour mills.