Tax compliance for rental businesses in Pakistan (a short, honest guide)

Not legal advice. Talk to your accountant. But if you're running a rental business at any scale in Pakistan, these are the things to be on top of:

1. FBR NTN registration. Any rental business grossing over ₨600K/year should already be registered. The cost is zero. The cost of not being registered is an audit notice and a scramble.

2. Withholding tax on corporate rents. Corporate customers are legally required to withhold tax when paying your invoices. They cut a cheque for 93% and deposit the 7% with FBR. You claim it back against your income tax. The discipline: track the WHT certificate number for every corporate rent. If you can't reconcile your WHT claims at year-end, you're leaving money with the government.

3. Sales tax — provincial. Sindh, Punjab, KPK each have a Provincial Revenue Authority. Rent-a-car typically falls under "services" — 13-16% sales tax on the rental fee. Register early; back-assessments are brutal.

4. Three records every rental must keep: - Rent register — who, what car, when, how much, paid how. This is your rent agreement + receipt log. - Asset register — every car with its purchase date, cost, depreciation, and current book value. - Driver register — if you dispatch drivers, every driver's CNIC, salary, tax withheld.

Every one of these is natively generated by a half-decent rental system. If yours are in five notebooks, your accountant is billing you for the reconciliation month that you could be spending on marketing.

5. The boring thing that pays off. Monthly bank reconciliation. Every rent receipt should match a bank deposit within three days. If it doesn't, someone is skimming and you find out now, not at year-end.