FBR’s updated Sales Tax Act covers corporate bodies, modarabas, trusts, societies and certain foreign associations under the definition of ‘company’.

ISLAMABAD: The sales tax law has defined the term ‘company’ in Pakistan for tax year 2027, covering a broad range of corporate bodies, entities and associations.

The Federal Board of Revenue (FBR) has issued the Sales Tax Act, 1990, updated up to June 30, 2026, setting out the definition of a company for the purposes of the law.

According to the updated Sales Tax Act, a “company” means:

• a company as defined in the Companies Ordinance, 1984 (XLVII of 1984);

• a body corporate formed by or under any law in force in Pakistan;

• a modaraba;

• a body incorporated by or under the law of a country outside Pakistan relating to the incorporation of companies;

• a trust, a co-operative society, a finance society or any other society established or constituted by or under any law for the time being in force; or

• a foreign association, whether incorporated or not, which the Board has, by general or special order, declared to be a company for the purposes of the Income Tax Ordinance, 2001 (XLIX of 2001).

The definition therefore extends beyond companies incorporated under Pakistan’s corporate law. It also covers certain statutory bodies, modarabas, trusts, societies and foreign entities.

The provision is contained in the FBR’s updated version of the Sales Tax Act, 1990, which incorporates amendments made up to June 30, 2026, and provides the applicable legal framework for tax year 2027.