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Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. •

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Do you know?

Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. •

Filing a NIL Tax Return for Companies in Pakistan

Learn how companies in Pakistan can file a NIL income tax return through the FBR’s IRIS system. This step-by-step guide covers login, zero-value entries, capital declaration, financial statement requirements, and compliance tips to avoid penalties and maintain good standing with the FBR.

Faiza Ehsan
September 1, 2025
Tax Toolkit

For companies operating in Pakistan, filing a NIL tax return is equally essential, particularly if the company experienced no business activity or revenue during the financial year.

Here’s a detailed step-by-step guide tailored for companies in Pakistan utilizing the FBR’s IRIS system:

Login to IRIS System

Visit the FBR’s IRIS portal: Access the official portal designed for tax filing.
Login using your company credentials:
- Username: Your company’s National Tax Number (NTN).
- Password: The password assigned to your company’s FBR account.
Navigate to the Dashboard: After successful login, you will be directed to the IRIS dashboard.

Access the Income Tax Return Form

Click “Declaration” in the main menu: Locate the “Declaration” option within the main menu of the IRIS dashboard.
Select Income Tax Return: Choose the “Income Tax Return” option for the relevant tax year you are filing for.

Enter Key Entries for NIL Return

Open the form and proceed with required entries: Open the income tax return form.
Enter Zero Values for Key Income Codes: As your company had no business activity, enter “Zero (0)” for the following key income codes:
- Accounting Profit / Tax Chargeable under Section 113C at 17%: Code: 923173 – Value: 0
- Turnover / Tax Chargeable under Section 113 at 1.25%: Code: 923161 – Value: 0

Attribute Tab – Business Nature

Navigate to the “Attribute” tab: Locate and click on the “Attribute” tab within the return form.
Select the Business Nature: Choose the appropriate business nature of your company from the dropdown menu. Ensure this selection aligns with the primary business activities outlined in your company’s Memorandum of Association.

Assets and Liabilities Declaration (Business Tab)

Navigate to the “Business” tab: Locate the “Business” tab within the return form.
Access the “Assets and Liabilities” section: Within the Business tab, find the section dedicated to Assets and Liabilities.
Enter Capital Information: Input the following capital details, ensuring they match your Memorandum of Association and financial records:
- Authorized Capital: Code: 3351 – Value: As per the Memorandum of Association.
- Issued, Subscribed & Paid-up Capital: Code: 3352 – Value: As per the Memorandum of Association.
- Verification: Ensure the entered Paid-up Capital is consistent with corresponding cash or bank balance entries in your company’s records.

Attach Required Documents (Attachment Tab)

Go to the “Attachment” tab: Navigate to the “Attachment” tab within the return form.
Attach Financial Statements in PDF format: Attach your company’s financial statements in PDF format. The specific requirements depend on your company’s authorized capital:
- Companies with Authorized Capital below PKR 3 million: Financial statements signed by a Cost and Management Accountant (CMA) are generally sufficient.
- Companies with Authorized Capital above PKR 3 million: Audited financial statements, signed by a Chartered Accountant (CA), are mandatory.
Content Verification: Ensure the attached financial statements accurately reflect your company’s Authorized and Paid-up Capital, even in the absence of business activity. This is crucial for return completion.

Review and Submit

Double-check all entries: Carefully review all entered information for accuracy, particularly the zero values for income and the capital details.
Use the “Preview” option: Utilize the “Preview” function within IRIS to thoroughly review the complete return form before final submission.
Click “Submit” to file the return: Once you are confident with the accuracy of the return, click the “Submit” button to officially file your company’s nil tax return.

Important Notes for Companies Filing Nil Returns in Pakistan:

Financial Statements are Crucial (FBR Requirement): Even though the Companies Act 2017 might not mandate financial statements for companies with authorized capital below PKR 3 million, the FBR requires these for completing a tax return, including a nil return.
Failing to attach financial statements will likely lead to a notice from the FBR, and your return may be deemed incomplete.
Annual Compliance is Mandatory: Filing a NIL tax return is an essential annual compliance requirement, even if your company had no business transactions during the financial year. This practice helps maintain good standing with the FBR and prevents penalties.
Incomplete Return Notices: Be prepared to receive a notice from the FBR if you fail to attach the required financial statements, marking your return as incomplete. Address such notices promptly to avoid further complications.

Additional Tips for Companies:

Keep a Record: Always retain a copy of the submitted nil tax return and the acknowledgment receipt for your company’s records.
Maintain an Updated Profile: Ensure your company’s NTN and business profile information are consistently updated in the FBR database to avoid any discrepancies.
Consult a Tax Advisor: If you have any doubts or complex situations, it’s always advisable to consult with a qualified tax advisor or contact the FBR helpline for clarification and guidance.

Addressing the Misconception: “No Income, No Need to File?”

It’s a widespread misconception that if you haven’t earned any income, you are exempt from tax filing obligations. This is generally incorrect. Tax authorities often require formal declarations from all registered entities and many residents, regardless of income. Filing a nil return is not just about tax payment; it’s about fulfilling your reporting responsibilities and maintaining a transparent financial record with the tax authorities. Proactive filing, even in the absence of income, is a sign of responsible tax management and helps avoid potential future issues.

Proactive Compliance Through Nil Returns

Filing a nil income tax return, whether as an individual or for a company, is a straightforward yet vital process for ensuring compliance with tax regulations. By understanding the steps involved and adhering to the guidelines, individuals and businesses can efficiently submit their nil returns, maintain accurate tax records, avoid potential penalties, and foster a positive relationship with tax authorities.

Remember, even in the absence of income, fulfilling your tax reporting obligations is a cornerstone of responsible financial citizenship and business practice.