Expense rules in Pakistan.
All FBR rules: 18% Sales Tax, mission allowances and VAT recovery rules in Pakistan.
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1Expense rules & reclaimable VAT
| Category | VAT | Reclaim | Cap / Note |
|---|---|---|---|
| Business meals | 13–16% | Limited | Provincial entertainment |
| Travel meals | 13–16% | 100% reclaimable | Per diem cap |
| Accommodation | 13–16% | 100% reclaimable | Tax invoice required |
| Fuel | 18% | 100% reclaimable | Business records |
| Train / flight | 13–16% | 100% reclaimable | Public transport |
| Taxi | 13–16% | 100% reclaimable | Receipt required |
| Client gifts | 18% | Not deductible | FBR limit |
| Parking | 13–16% | 100% reclaimable | Tax invoice |
Federal + Provincial
Dual sales tax system.
Per diem
MNC standard.
Retention
FBR records: 6 years.
2Mileage allowance
| Mode | Allowance | Cap | Note |
|---|---|---|---|
| Personal car | PKR 20/km | By company | Standard practice |
| Motorcycle | PKR 10/km | By company | Reduced rate |
MNC practice
Private sector standard.
Records
Date, destination, km.
Inflation
Caps revised by PKR/USD.
3Per diem and travel allowances
| Destination | Meal | Lodging / night | Daily rate |
|---|---|---|---|
| Karachi / Lahore | PKR 3,000 | PKR 15,000 | PKR 18,000 |
| Islamabad | PKR 3,500 | PKR 18,000 | PKR 21,500 |
| Senior executive | PKR 8,000 | PKR 30,000 | PKR 38,000 |
| Foreign — Dubai | PKR 12,000 | PKR 40,000 | PKR 52,000 |
| Foreign — London | PKR 25,000 | PKR 80,000 | PKR 105,000 |
MNC practice
Standard executive per diem.
Hotel separate
Lodging refunded on invoice.
Inflation
Caps revised by PKR/USD.
4Foreign VAT recovery
| Zone | Mechanism | Deadline | Method |
|---|---|---|---|
| Pakistan → EU | No reciprocity | — | No agreement |
| France | No reciprocity | — | No agreement |
| United Kingdom | No reciprocity | — | No agreement |
| Switzerland | No reciprocity | — | No agreement |
| USA | No recovery | — | Sales tax not recoverable |
| PK Sales Tax for foreign | None | — | No mechanism |
No B2B refund
No B2B recovery procedure.
Free zones
Pakistan Special Economic Zones.
Outbound
PK company struggles to recover EU VAT.
Industrialize your Pakistan expenses with Illizeo.
18% Sales Tax, provincial 13-16%, MNC per diem, multi-currency PKR↔USD↔EUR↔CHF: all the FBR rules above are natively integrated into Illizeo.
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