At a glance
#Dates are for an example year end of Dec 31, 2025. Where local law moves a deadline on a weekend or national public holiday to the next working day, the date shown is already moved. Use the Deadlines tool for your own year end and thresholds.
Verified 2026-10-27. Tax authority: Federal Board of Revenue (FBR). Summaries are simplified; check the linked official source before relying on them.
The law
#Section 108 of the Income Tax Ordinance, 2001 lets the Commissioner redistribute income, deductions and tax credits between associates so that they reflect an arm's length transaction. Chapter V of the Income Tax Rules, 2002 (rules 20 to 27) sets the arm's length standard and the methods. Chapter VIA (rules 27A to 27Q, added in 2017 and 2018) sets the master file, local file and country-by-country (CbC) rules. Since tax year 2024, section 108(6) (added by the Finance Act, 2024) also lets the Commissioner disallow 25% of sales promotion, advertising and publicity costs and allocate them to an associate when royalties are paid to that associate and the taxpayer cannot show, on notice, that no benefit was given to it. Section 109 also lets the Commissioner disregard a transaction that lacks economic substance. The Ordinance does not name the OECD Guidelines, but rule 22 says the Commissioner must also be guided by international standards, case law and guidelines of recognised tax bodies. Associates are defined in section 85. The Directorate General of International Tax Operations (section 230E) runs transfer pricing audits.
Documentation
#Every taxpayer with a transaction with an associate must keep a master file and a local file, and a CbC report where applicable (s. 108(3)). A master file is needed by a constituent entity of a multinational group with turnover above PKR 100 million (rule 27K). A local file is needed for associate transactions above PKR 50 million (rule 27M). Neither file is filed with the return. The Commissioner may ask for them at any time after the return due date, and they must be produced within 30 days (s. 108(4)), which can be extended by up to 45 days (s. 108(5)). The FBR can also extend any Chapter VIA deadline by written order (rule 27P). The general record rule keeps accounts and documents for six years after the tax year, and longer while a proceeding is pending (s. 174(3)). The master file covers group structure, business, intangibles and financing (rule 27L). The local file covers the local entity, the controlled transactions, the method and the local accounts (rule 27N). CbC reports go to the FBR by email to cbcr@fbr.gov.pk until its software is ready (rule 27Q).
Methods
#Rule 23 sets the arm's length standard. The methods are comparable uncontrolled price, resale price, cost plus and profit split. Profit split is used only where the first three cannot be applied reliably. Among the first three, the Commissioner applies the method that gives the most reliable measure. If none can be applied reliably, the Commissioner may use any method that is consistent with the arm's length standard (rule 23(6)). TNMM is not named, so it would fall under that last rule. The rules give no arm's length range or interquartile rule.
Penalties
#Failing to keep or maintain the documents required by section 108 or the Rules (including the master and local file) is penalised under section 182, item 18, at 1% of the value of the transactions whose records are required. Failing to furnish the CbC report or information by the due date costs PKR 2,000 for each day of default, with a minimum of PKR 25,000 (section 182, item 17). Failing to comply with a notice under section 176 or 108 costs PKR 25,000 for the first default and PKR 50,000 for each later default (section 182, item 9). A late company return draws the higher of 0.1% of tax payable or PKR 1,000 a day, with a PKR 50,000 minimum and a cap of 200% of tax, reduced by 75%, 50% or 25% if filed within one, two or three months (section 182, item 1).
Pillar Two
#No Pillar Two law was found. The Income Tax Ordinance as consolidated by the FBR to 30 June 2026 (which includes the Finance Act, 2026) has no top-up tax, income inclusion rule, undertaxed profits rule or GloBE Information Return. So no Pakistani Pillar Two deadline is shown. Pakistani entities of in-scope groups may still be covered by top-up taxes and GIRs filed in other countries.
Other rules
#The company return is due 31 December after a tax year that ends between 1 January and 30 June (section 118(2)(a)), which includes the normal 30 June tax year. For every other year end it is due on the first 30 September after the year end (section 118(2)(b)), so 30 September of the next year for a 31 December year end. The normal tax year ends 30 June, and the Commissioner can approve a special tax year (section 74). The Commissioner can extend the return deadline by 15 days on application, and the Chief Commissioner by up to 15 more, unless exceptional circumstances apply (section 119). The Board also extends dates by order under section 214A (for tax year 2025, returns due 30 September 2025 moved to 31 October 2025). A foreign ultimate parent's fiscal year for CbC is its own accounting year, and a Pakistani parent's is its tax year. Section 118, section 108 and Chapter VIA were checked in the FBR consolidated texts to 30 June 2026 (Ordinance) and 15 September 2026 (Rules).
Filings and deadlines
#| # | Filing | When | Who | Source |
|---|---|---|---|---|
| 1 | Corporate income tax return (company return under section 114) For a tax year ending between 1 January and 30 June, including the normal 30 June year, the return is due 31 December of the same calendar year. For any other year end it is due on the next 30 September after the year end: 30 September of the next year for a September to December year end, but 30 September of the same year for a July or August year end. The Commissioner can extend by 15 days on application (section 119) and the Board sometimes extends by order under section 214A, so no extension date is built in. The Ordinance has no rule moving a deadline off a weekend or holiday, so dates are shown as they fall. A late return draws a penalty under section 182, item 1. | Fixed calendar date (e.g. Sep 30, 2026) | Every company, whatever its income (section 114). | Income Tax Ordinance, 2001, ss. 118(2) and 119 (FBR consolidated text amended up to 30 June 2026) |
| 2 | CbC notification (identity of the reporting parent) Due on or before the date the entity's own return is due under section 118 (rules 27B and 27C), so it follows the Pakistani tax year, not the group year end. A surrogate parent also names the ultimate parent. Failure to furnish the information by the due date draws PKR 2,000 a day with a PKR 25,000 minimum (s. 182, item 17). | With Corporate income tax return (company return under section 114) (e.g. Sep 30, 2026) | Every Pakistani constituent entity (including a Pakistani permanent establishment) of a group with consolidated revenue of EUR 750 million or more, or the PKR equivalent, in the preceding fiscal year (rule 27A). A parent or surrogate says it is the parent. Other entities name the parent and its country. | Income Tax Rules, 2002, rules 27B and 27C (FBR consolidated text to 15 September 2026) |
| 3 | Country-by-country report (to the FBR) Filed not later than 12 months after the last day of the reporting fiscal year (rule 27G(1)). The year is the Pakistani tax year for a Pakistani parent, and the foreign parent's accounting year for a foreign group. If a systemic failure notice is received, the 12 months are extended by 45 days from the notice. One Pakistani entity can be named to file for the others. The FBR exchanges reports within 15 months. Filing is by email to cbcr@fbr.gov.pk until the FBR software is ready (rule 27Q). Late filing draws PKR 2,000 a day, minimum PKR 25,000 (s. 182, item 17). The Board may allow a later date by written order (rule 27P). | 12 months after year end (e.g. Dec 31, 2026) | A Pakistani ultimate or surrogate parent of a group with consolidated revenue of EUR 750 million or more (or the PKR equivalent) in the preceding fiscal year. A Pakistani entity of a foreign group files locally if the foreign parent need not file, there is no exchange agreement, or a systemic failure was notified (rule 27E). | Income Tax Rules, 2002, rules 27D, 27E, 27G and 27Q (FBR consolidated text to 15 September 2026) |
| 4 | Master file (kept, produced on request) Not filed. It must be kept and maintained, and given to the Commissioner within 30 days of a request in a proceeding (s. 108(4)), with an extension of up to 45 days on written application (s. 108(5)); not complying with the notice draws PKR 25,000, then PKR 50,000 per later default (s. 182, item 9). Contents are in rule 27L. Failure to keep it draws 1% of the value of the associate transactions (s. 182, item 18). | Within 30 days of a tax authority request | A taxpayer that is a constituent entity of a multinational group (entities in more than one country) and has turnover above PKR 100 million (rule 27K). Rule 27K applies notwithstanding the EUR 750 million revenue limb of the MNE group definition in rule 27A, so smaller groups are also caught. | Income Tax Rules, 2002, rules 27A, 27K, 27L (FBR consolidated text to 15 September 2026) and Income Tax Ordinance s. 108(3)-(5) |
| 5 | Local file (kept, produced on request) Not filed. It must be kept and made available if the Commissioner asks under section 108, at any time after the return due date under section 118 (rule 27M). It must then be given within 30 days (s. 108(4)), extendable by up to 45 days (s. 108(5)). Not complying with the notice draws PKR 25,000, then PKR 50,000 per later default (s. 182, item 9). Contents are in rule 27N. Failure to keep it draws 1% of the value of the associate transactions (s. 182, item 18). | Within 30 days of a tax authority request | Every taxpayer with transactions with associates above PKR 50 million (rule 27M). Below that, keep enough evidence to support the price. | Income Tax Rules, 2002, rules 27M, 27N (FBR consolidated text to 15 September 2026) and Income Tax Ordinance s. 108(3)-(5) |