Tax registration for businesses in Pakistan

Tax registration is a legal obligation for all businesses operating in Pakistan. It marks the formal inclusion of a business into the national tax system and is essential for complying with the country’s fiscal laws. Whether you’re a sole proprietor, a partnership firm, a company registered under SECP, or an exporter offering IT services, obtaining tax registration ensures that your business can operate legally and benefit from government incentives.

This article provides a comprehensive guide on tax registration for businesses in Pakistan, including processes, requirements, authorities involved, types of tax registration, and post-registration obligations.

Why Tax Registration Is Important

Tax registration ensures that a business is formally recognized by the Federal Board of Revenue (FBR) and fulfills its obligation under the Income Tax Ordinance, 2001 and Sales Tax Act, 1990. Key reasons to register include:

• Compliance with income tax and sales tax laws

• Legal invoicing and documentation

• Access to banking, tenders, and financial institutions

• Claiming refunds and tax credits

• Eligibility for government and export incentives

• Avoiding penalties and audits

Types of Tax Registrations in Pakistan

There are primarily two major types of tax registrations:

1. Income Tax Registration (NTN)

• Required for all individuals, AOPs, and companies earning taxable income

• Issued by FBR through its online IRIS portal

• Used for filing annual income tax returns and withholding statements

2. Sales Tax Registration (STRN)

• Mandatory for manufacturers, retailers, importers, and service providers crossing sales thresholds

• Enables a business to charge and deposit sales tax

• Involves monthly filing of sales tax returns and invoice records

Authorities Involved in Tax Registration

• Federal Board of Revenue (FBR): Central authority for income and sales tax registration

• Provincial Revenue Authorities:

  • PRA (Punjab Revenue Authority)

  • SRB (Sindh Revenue Board)

  • KPRA (Khyber Pakhtunkhwa Revenue Authority)

  • BRA (Balochistan Revenue Authority)

• Pakistan Software Export Board (PSEB): For IT exporters availing tax exemptions

Who Needs to Register for Tax in Pakistan?

• Sole proprietors (freelancers, traders, consultants)

• Partnership firms (registered or unregistered)

• Private and public limited companies

• Single member companies (SMC)

• NGOs and non-profit organizations

• Real estate businesses

• Online sellers and e-commerce platforms

• Importers, exporters, manufacturers, and wholesalers

• Professionals like doctors, engineers, lawyers, architects, accountants

Process of Income Tax Registration (NTN)

Step 1: Create an IRIS Account

Visit the FBR portal at https://iris.fbr.gov.pk
Click on “Registration for Unregistered Person”

Submit basic information:

• Name

• CNIC (for individuals) or SECP Incorporation Number (for companies)

• Mobile number

• Email address

You will receive login credentials via SMS/email.

Step 2: Log In to IRIS Portal

Use the received credentials to access your IRIS dashboard.

Go to the “Registration” section
Click on “Form 181 – Registration Form”

Step 3: Complete the Registration Form

Fill out sections based on your business structure:

For Sole Proprietorship:

• CNIC

• Business name and nature

• Business address

• Business bank account (IBAN)

• Utility bill copy

• Business letterhead

For Partnership:

• CNICs of all partners

• Registered partnership deed

• Business address and utility bill

• Bank account details

For Company (Private/SMC):

• SECP Certificate of Incorporation

• CNICs of all directors

• Form 29

• Utility bill

• Bank certificate or statement

• Board resolution (for tax matters)

Step 4: Upload Required Documents

Documents must be uploaded in scanned PDF format (maximum 5MB each).

Step 5: Submit Form and Await Approval

Once submitted, FBR will process your application. If accepted, the NTN Certificate will be available for download from the IRIS portal.

Process of Sales Tax Registration (STRN)

Sales tax registration is necessary for:

• Goods manufacturers with annual turnover exceeding PKR 10 million

• Retailers with over PKR 10 million annual sales

• Service providers listed under the Sales Tax Act

Step 1: Login to IRIS and Access Registration Tab

Use your existing IRIS credentials.

Click “Form 181” and select “Sales Tax Registration”

Step 2: Provide Business Information

Add details regarding:

• Premises ownership

• Type of business activity

• Contact information

Step 3: Upload Documents

Mandatory documents include:

• CNICs

• Utility bill of premises

• Bank account verification

• GPS-tagged photos of office/shop/factory (via Tax Asaan App)

• Rent agreement or property ownership proof

Step 4: Submit Form

After submission, FBR may request a physical or online verification.

Upon approval, the business is assigned a STRN (Sales Tax Registration Number).

Registration with Provincial Revenue Authorities

If you are a service provider, registration with your respective provincial authority is required:

Required Documents:

• CNICs or company incorporation documents

• Business profile and letterhead

• Utility bill and rental/ownership proof

• Bank account details

• National Tax Number (NTN)

Each authority has its own online portal:

• PRA: https://e.pra.punjab.gov.pk

• SRB: https://e.srb.gos.pk

• KPRA: https://kpra.kp.gov.pk

• BRA: https://www.bra.gob.pk

Documents Required for Tax Registration

Post-Registration Obligations

Once registered for tax purposes, a business must comply with several ongoing responsibilities:

1. Income Tax Return Filing

• Due annually by September 30 (individuals) or December 31 (companies)

• Include details of income, expenses, and tax paid

2. Sales Tax Return Filing

• Monthly filing due by 18th of every month

• File via IRIS or STR portals

• Input/output reconciliation required

3. Withholding Tax Statements

• Required for businesses with payrolls, contractors, or service payments

• Monthly and annual statements are filed via IRIS

4. Tax Payments and Challans

• Taxes must be deposited via PSID (Payment Slip ID) using bank channels or online apps

• CPR (Computerized Payment Receipt) must be retained

Fines and Penalties for Non-Compliance

Failure to register or comply can result in:

• Penalty of PKR 10,000 or more under Section 182 of the Income Tax Ordinance

• Suspension of NTN or STRN

• Disallowance of input tax

• Ineligibility for tenders and contracts

• Audit or enforcement action

Common Issues Faced During Registration

• Technical issues on IRIS portal

• Document size/format mismatch

• Utility bill address mismatch

• Delays in verification or rejection without reason

To avoid delays, it’s advisable to seek help from professionals familiar with the tax registration process.

Tax Exemptions for Registered IT Businesses

Registered IT exporters can avail 100% tax exemption under the IT Export Policy (subject to filing with PSEB and FBR).

Requirements:

• NTN and STRN

• Registration with Pakistan Software Export Board (PSEB)

• Annual filing of exemption certificate renewal

• Declaration of foreign income

Role of Tax Consultants in Registration

Hiring a consultant ensures:

• Correct activity codes selection

• Document preparation and submission

• Timely registration without errors

• Ongoing tax compliance and returns

• Representation before FBR in case of notices or audits

Sterling.pk offers full support for FBR and provincial tax registration for businesses of all sizes.

Estimated Time and Cost

(Exact cost may vary based on documentation, city, and type of business)

Conclusion

Tax registration is a legal necessity for every business in Pakistan. It enables businesses to operate transparently, file returns, pay taxes, and benefit from available incentives. Whether you’re a new startup or an established company, obtaining your NTN and STRN is a vital step toward formalizing and growing your operations.