Differential tax treatment of limited liability partnership (LLP) v.s. traditional partnership
Reform IDF711
DescriptionPakistan applies different tax treatment to economically similar business forms. Partnerships may either be registered with the SECP under the Limited Liability Partnership (LLP) Act, 2017, or with the Registrar of Firms (RoF) under the Partnership Act, 1934. Partnerships registered with RoF are taxed as AOPs under Section 80(2)(iii) of the ITO, 2001 while LLPs are treated as body corporates under Section 80(2)(ii)), & subject to a 29% flat rate, double taxation on distributions, and capital gains tax on conversion.
DepartmentFederal Board of Revenue - FBR-IRS
Jurisdiction / LocationFederal - Entire Pakistan
SectorAll Sectors
Start Date03-05-2026
Target Deadline
Date Enacted
Implementation StatusCompleted
Progress 100%
CCORR Direction
Cost Savings PKR (Mil.)
Evidence