Multinational enterprises and domestic groups operating in Pakistan face rigorous scrutiny regarding cross-border and related-party transactions. Under Section 108 of the Income Tax Ordinance, 2001 and the Income Tax Rules, 2002, the Federal Board of Revenue (FBR) mandates comprehensive Transfer Pricing documentation to verify that transactions with associated enterprises satisfy the arm's length principle.
Statutory Requirements & Documentation Tiers
Our tax attorneys and corporate legal advisors structure compliant documentation aligned with both Pakistani tax legislation and OECD transfer pricing guidelines. We support Large Taxpayer Units (LTU) and Medium Taxpayer Units (MTO) across Islamabad, Karachi, and Lahore.
| Document Type | Statutory Threshold | Deliverables |
|---|---|---|
| Local File | Turnover > PKR 100 Million | Entity analysis, transaction schedule, economic benchmarking |
| Master File | Consolidated Turnover > PKR 100 Million | Global business overview, IP strategy, financing arrangements |
| CbC Report (CbCR) | Consolidated Turnover > EUR 750M (or PKR equivalent) | Jurisdiction-wise allocation of revenue, taxes, and capital |
Why Choose Javid Law Associates
Established in 2004, Javid Law Associates provides corporate legal services, SECP compliance, and high-level tax defense. Our offices in Islamabad and Bahawalpur deliver personalized advisory services tailored to multinational subsidiaries, foreign investors, and expanding Pakistani business groups.
- Detailed Functional, Asset, and Risk (FAR) analysis to defend group profit allocation.
- Benchmarking studies utilizing approved transfer pricing methodologies (CUP, TNMM, Resale Price, Cost Plus).
- Intercompany legal contract drafting and service-level agreement reviews.
- Representation during FBR tax audits, inquiries, and appellate proceedings.
- Integration with SECP corporate governance filings and provincial revenue requirements.
Audit Defense & Continuous Support
Failure to furnish required documentation upon notice incurs severe financial penalties and unilateral reassessments under Pakistani tax laws. We ensure that your related-party policies remain legally robust and ready for statutory scrutiny before the FBR.
Service heading
Ensure FBR statutory compliance, minimize cross-border tax audit risks, and implement robust Master and Local file frameworks in Pakistan.
Estimated duration
3-4 weeks
Requirements
- Audited financial statements of local entity and ultimate parent entity
- Comprehensive ledger and breakdown of related-party transactions
- Group legal ownership chart and operational structure details
- Existing intercompany contracts, royalty agreements, and management service agreements
- National Tax Number (NTN) and SECP incorporation documentation
Key features
- Local File preparation under Section 108 and Income Tax Rules
- Master File structuring for multinational group entities
- Economic benchmarking and comparable search studies
- Intercompany legal agreement and policy drafting
- Country-by-Country Reporting (CbCR) advisory and notifications
- Audit defense support and representation before FBR authorities
About the Author
Written by the expert legal team at Javid Law Associates. Our team specializes in corporate law, tax compliance, and business registration services across Pakistan.