Pakistan Transfer Pricing Documentation Requirements
Pakistan requires a Master File from constituent entities of large multinational groups with local turnover above PKR 100 million and a Local File for transactions with associates exceeding PKR 50 million. Documentation is produced within 30 days, and a daily-accruing penalty applies to non-filing.
Requirements at a glance
| Requirement | Threshold | Deadline | Deadline type | Language | Penalty |
|---|---|---|---|---|---|
Master File Required | Constituent entity of an MNE group (global revenue ≥ EUR 750m) with local turnover > PKR 100m | On request | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 30 days. | EN | Yes (PKR 2,000 per day; minimum PKR 25,000) |
Local File Required | Transactions with associates exceeding PKR 50m | On request | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 30 days. | EN | Yes (minimum PKR 25,000; PKR 2,000 per day for continued failure) |
CbC report Required | Group revenue ≥ EUR 750m | 12 months after fiscal year-end | Submission deadline The Country-by-Country report is filed by the group's ultimate parent entity; a local notification identifying the reporting entity is filed separately. | — | Yes |
Calculate your exact Pakistan deadline
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Scope of the documentation obligation
A Master File must be maintained by every constituent entity in Pakistan of a multinational group, where the group has global turnover of at least EUR 750 million or its rupee equivalent and the Pakistani entity has turnover of more than PKR 100 million in the reporting year. The Local File must be maintained for transactions with associates exceeding PKR 50 million. Documentation is produced within 30 days, or within one month of a written request from the Commissioner.
Distinctive features of the Pakistani regime
The defining feature of the Pakistani regime is the daily-accruing penalty structure shared across the documentation requirements. A failure to file when required carries a minimum penalty of PKR 25,000 with a further PKR 2,000 for each day of continued default, so exposure grows the longer the documentation remains outstanding, and a separate penalty of 1 percent of the transaction value applies to a failure to maintain records. The two thresholds operate at different levels, with the Master File geared to the entity’s overall turnover and the Local File geared to the value of transactions with associates. There is no published safe harbour.
Benchmarking and comparables
Although not specified in the regulations, local comparables are preferred over regional comparables, and a regional search covering the Asia-Pacific or the Middle East could be accepted. The rules do not specify the choice between single-year and multi-year testing. A fresh benchmarking search is not specifically required every year, but it is recommended that a fresh search be conducted once every three years with the financial data updated for the intervening years. The general limitation period is five years.
Frequently asked questions
How does the Pakistani documentation penalty accrue?
A failure to file carries a minimum penalty of PKR 25,000 plus PKR 2,000 for each day of continued default, and a failure to maintain records attracts a separate penalty of 1 percent of the transaction value.
This guide is an informational research aid prepared by Comp-Press and is not tax or legal advice. Transfer pricing rules change; verify current requirements before relying on them for filing.