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Bilateral Trade & IT Services Export Policy
| Agreement | Status | IT/ITeS Relevance |
|---|---|---|
| China-Pakistan FTA (CPFTA) II | In effect | Digital cooperation, cross-border data flows, IT services market access to China |
| SAARC Agreement on Trade in Services | Framework signed | IT services trade liberalization across South Asia |
| South Asian Free Trade Area (SAFTA) | Active | Preferential trade for IT services in South Asia |
| ECO Trade Agreement | Active | Trade facilitation with Central Asian states, including IT services |
| Pakistan-GCC FTA | Under negotiation | Market access for IT services to Gulf states |
| WTO GATS | Pakistan is member | General Agreement on Trade in Services — IT services commitments |
| EU GSP+ | Active (textiles focus) | Limited IT relevance; potential for future expansion |
| Bilateral IT Cooperation | Various MoUs | MoITT bilateral agreements with Turkey, Malaysia, UAE, Saudi Arabia |
The Trade Development Authority of Pakistan (TDAP) provides:
| Incentive | Rate/Detail | Conditions | Reference |
|---|---|---|---|
| WHT on Export Remittance (PSEB) | 0.25% | PSEB + 80%+ export revenue | ITO §154A |
| WHT on Export Remittance (non-PSEB) | 1% | No PSEB registration | ITO §154A |
| 50% FCY Retention | Retain 50% of export proceeds in foreign currency | All IT exporters | SBP FECL 05/2026 — Foreign Exchange |
| Duty-Free Equipment Import | 0% customs duty | PSEB-registered companies | PSEB / SRO 488(I)/2013 |
| SBP Export Finance (EFS) | Concessional financing for exporters | All exporters | SBP EFS |
| SBP LTFF | Long-Term Financing at KIBOR+2% (as of April 2026) | PSEB-registered IT exporters | SBP LTFF |
| 100% Foreign Ownership | IT sector allows 100% foreign equity | All IT companies | BOI Investment Policy 2023 |
| SEZ Tax Holiday | 10-year income tax exemption | SEZ-registered companies | SEZ Act 2012 / BOI |
| Startup Tax Credit | 100% for 3 years | PSEB mandatory §65F(b) | ITO §65F |
| Province | Standard Rate | IT Concessional | IT Export (PSEB) | Authority |
|---|---|---|---|---|
| Sindh | 15% | 3% | 0% | SRB |
| Punjab | 0% (Zero-Rated) | 0% (Zero-Rated) | 0% | PRA — Punjab Revenue Authority |
| KP | 15% | 2-5% | 0% | KPRA — Acts & Notifications |
| Balochistan | 15% | — | 0% | BRA |
| Platform | Purpose | Link |
|---|---|---|
| WeBOC | Electronic customs declarations | weboc.gov.pk |
| PSW | Pakistan Single Window for unified documentation | psw.gov.pk |
| Roshan Digital Account | Overseas Pakistani investment and remittance | roshandigitalaccount.com |
| Raast | Instant payment system | raast.pk |
| IRIS | Income tax filing | iris.fbr.gov.pk |
| PSEB TechDestination | IT export promotion | pseb.org.pk |
| Reference | Description | Source |
|---|---|---|
| TDAP | Trade Development Authority — export facilitation | TDAP |
| BOI Investment Policy 2023 | 100% foreign ownership, FCY retention, SEZ incentives | BOI |
| PSEB | IT registration and export facilitation | PSEB |
| ITO 2001 (Amended) | All income tax provisions | FBR |
| Finance Act 2025 | Latest tax law changes | FBR |
| SEZ Act 2012 | Tax holidays and incentives in Special Economic Zones | BOI |
The Ministry of Commerce (MoCommerce) negotiates and administers Pakistan's trade agreements, several of which create preferential market access for IT services:
| Agreement | Partner(s) | IT Sector Impact |
|---|---|---|
| SAFTA (South Asian FTA) | India, Bangladesh, Sri Lanka, Nepal, Bhutan, Afghanistan | Preferential tariffs on IT equipment; limited services trade |
| Pakistan–China FTA (Phase II) | China | Duty-free IT equipment imports from China; Chinese companies can operate in STZs |
| Pakistan–Turkey FTA | Turkey | Preferential access for software services; mutual recognition of certifications |
| Pakistan–Malaysia FTA | Malaysia | IT services market access; Malaysia MSC-registered firms reciprocal |
| EFTA (Negotiating) | Switzerland, Norway, Iceland, Liechtenstein | Potential services trade chapter for IT/ITeS |
| GSP+ (EU) | European Union | Duty-free goods exports (not services); relevant for IT hardware exporters |
| Item | Rate | Jurisdiction | Legal Basis |
|---|---|---|---|
| IT Export WHT | 0.25% (PSEB) / 1% (non-PSEB) | Federal/ICT | ITO 2001 §154A |
| Corporate Tax (IT) | 20% | Federal/ICT | ITO 2001 §35 |
| Customs Duty (IT Imports) | 0–3% PSEB / 5–20% standard | Federal | Pakistan Customs Tariff |
| Startup Tax Credit | 100% for 3 years | Federal/ICT | ITO 2001 §65F(b) |
| SEZ Tax Holiday | 10-year | Federal | SEZ Act 2012 §13 |
| EOBI | 5% employer + 1% employee (PKR 37,000/mo ceiling — EOBI Act & Rules) | Federal | EOBI Act 1976 |