Tax rate for companies remains unchanged at 35% (25% for small companies) currently

 Tax on dividend received by public or insurance company is payable at rate of 5%, 10% in all other cases. Bonus shares no longer taxable in hands of shareholders; nor is S company required to withhold tax on bonus shares. Nonresident air and shipping enterprises are taxed at flat rate of 3% and 8% respectively on their gross earnings.

Primary principle for taxation of banking companies is that all profit and gains for purposes of taxation will mainly be pre-tax profits from all sources as computed in yearly financial statements submitted to State Bank of Pakistan.

In order to rationalize taxation of banking companies in Pakistan and to diminish undue litigation of certain claims unusual for banking companies, significant changes were proposed in Finance Bill 2007. Seventh schedule was introduced under § 100A of Ordinance under which all income profits and gains of banking companies will be processed in line with proposed schedule.

Foreign banks will be allowed deduction on account of head office expenses in ratio of Pakistani turnover to world turnover. Substantial change is also proposed whereby capital gains of banking company would be subject to tax at 10% of gross amount.