If you run a private limited company in Pakistan, your corporate tax bill isn’t a flat percentage of profit — it depends on what kind of company you are and whether the 17% Alternate Corporate Tax under Section 113C applies to you instead. Small companies registered with SECP get a preferential 20% rate; banking companies are taxed at 39%; everyone else pays 29%. Plug your figures into the calculator below to see your estimated liability for tax year 2025-26, then check the rate table underneath to confirm which bracket you actually fall into.
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Company Tax Rates – Tax Year 2025-26
| Company Type | Tax Rate |
|---|---|
| Small Company | 20% |
| Banking Company | 39% |
| All other Companies | 29% |
| Alternate Corporate Tax (ACT) Sec-113C | 17% |
A quick note from our filings desk: the “Small Company” rate isn’t automatic just because your revenue is low — SECP and FBR both define it by specific paid-up capital, employee count, and turnover thresholds, and losing that status mid-year can push you into the 29% bracket unexpectedly. If you’re not sure which category your company falls into, our team can confirm it against your SECP incorporation documents before you file. See our Company Registration Services or get in touch via our contact page for a review.
Worked Example: Estimating a Small Company’s Tax
Say your company qualifies as a Small Company under SECP’s definition and reports a taxable profit of PKR 5,000,000 for the year. At the 20% Small Company rate, your basic corporate tax liability works out to PKR 1,000,000. Now compare that against the 17% Alternate Corporate Tax under Section 113C, which is calculated on your accounting income (not taxable income) after specific adjustments — if that figure is higher than your normal tax liability, you pay the ACT amount instead. This is exactly why we tell clients not to rely on the headline rate alone: the ACT comparison is a separate calculation your accountant needs to run every year, not a one-time check.
Don’t Forget Super Tax (Section 4C)
Separately from the rates in the table above, Super Tax under Section 4C applies on top of regular corporate tax for companies with very high income — under the current Finance Act framework this only kicks in above a specific high-income threshold (Rs. 500 million), at a reduced rate for most sectors compared to earlier years, though banks, E&P, and fertiliser companies remain on a different, higher schedule. Super Tax rates and thresholds are revised almost every Finance Act, so if your company is in that income bracket, this is one to confirm fresh each filing year rather than assume from last year’s return.
When Is This Tax Actually Due?
Corporate income tax is typically paid through advance tax installments during the year (quarterly, based on your prior year’s tax liability) and reconciled when you file your annual return — for companies, the return deadline generally falls at the end of December for a June-ending tax year, though this shifts depending on your company’s specific accounting year-end and any FBR extension notifications. Missing an advance tax installment doesn’t erase the liability, it just adds default surcharge on top, so it’s worth tracking even before your annual filing is due.
Frequently Asked Questions
Does the Small Company rate apply automatically once I’m profitable?
No — SECP/FBR’s Small Company definition is based on paid-up capital, employee count, and turnover thresholds set in the Ordinance, checked independently of whether you’re profitable. A company can lose Small Company status mid-year if it crosses a threshold, which pushes it into the 29% “all other companies” bracket for that year.
Is Alternate Corporate Tax refundable if I overpay?
ACT paid in excess of your normal tax liability is generally carried forward and adjustable against your normal tax liability in future years, subject to the specific carry-forward rules under Section 113C — it isn’t simply lost, but it also isn’t an instant refund.
What if my company had a loss this year?
A loss year generally means no normal corporate tax is due, but Alternate Corporate Tax and minimum tax provisions can still apply depending on your turnover and sector — this is a common surprise for first-time filers who assume a loss year means zero tax exposure.
FAQs
What exactly counts as a “Small Company” under FBR rules?
It’s a specific legal definition, not just a low-revenue business — SECP/FBR require paid-up capital below a set threshold, fewer than 250 employees, and turnover under the prescribed limit, all at once. Cross any one of those and you’re taxed at 29% instead of 20% for that year.
Do I pay both the normal tax rate and ACT?
No — Alternate Corporate Tax under Section 113C is a floor, not an add-on. FBR compares your normal tax liability against 17% of accounting income and you pay whichever is higher, not both stacked together.
When is company income tax actually due?
Companies file on a different cycle than individuals — typically by 30 September (calendar year-end) or per your company’s specific accounting year-end plus the statutory filing window. Missing it triggers both a penalty and potential ATL removal.
