DoubleTaxationPakistan – United Kingdom tax treaty: residence, 183 days, rates
Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Islamic Republic of Pakistan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains (signed at Islamabad on 24 November 1986)
- Signed: 24/11/1986
- In force since: 08/12/1987
- Official text
If both countries treat you as resident
- Dual-resident individual: (a) resident of the State where he has a permanent home available to him; if he has one in both States — the State with which his personal and economic relations are closer (centre of vital interests); (b) if that State cannot be determined, or if he has no permanent home available in either State — the State of his habitual abode; (c) habitual abode in both States or in neither — the State of which he is a national; (d) national of both or of neither — the competent authorities settle the question by mutual agreement. Art. 4(2) Pakistan–UK Convention (1986)
- MLI in force for the UK from 1 October 2018 and for Pakistan from 1 April 2021; effective for UK income tax from 6 April 2022 and for other Pakistan taxes for taxable periods beginning on or after 1 October 2021. The MLI replaces Art. 4(3) (entities) only; Art. 4(2), Art. 16 and Art. 23(1)–(2) are unchanged. The authentic texts prevail. Synthesised text of the MLI and the 1986 UK–Pakistan Convention (GOV.UK)
- If you have no permanent home available in either State, the treaty goes straight to habitual abode (the centre of vital interests step applies only where there is a home in both States). Art. 4(2)(b) Pakistan–UK Convention
- Centre of vital interests: the State with which your personal and economic relations are closer. Art. 4(2)(a) Pakistan–UK Convention
- Habitual abode in both States or in neither — resident of the State of which you are a national; national of both or neither — the competent authorities settle the question by mutual agreement (Art. 25). Art. 4(2)(c), (d) Pakistan–UK Convention
Income: who taxes it
| Income | Treaty rule | Article |
|---|---|---|
| Salary (employment) | The country where the work is done may tax it. Exempt if all apply: no more than 183 days in any 12-month period; the employer is not resident there; the pay is not borne by its permanent establishment there. | Art. 16(2) |
| Self-employment, business, services | Country of residence; the other country taxes profits of a permanent establishment (fixed base) there, or if your stay there reaches 183 days in the tax year. | Art. 7, Art. 15 |
| Pension | Only the country of residence. | Art. 19(1) |
| Government service | Usually only the paying country; exception: service in the other country by its national. | Art. 20 |
| Government service pension | Usually only the paying country; exception: service in the other country by its national. | Art. 20 |
| Rent from real estate | The country where the property is located may tax; the country of residence relieves double taxation. | Art. 6(1) |
| Dividends | Source country: at most 20%; the country of residence relieves double taxation. | Art. 10(2)(b) |
| Interest (deposits, bonds, loans) | Source country: at most 15%; the country of residence relieves double taxation. Other rates or exemptions apply in some cases (see the article). | Art. 11(2) |
| Royalties (copyright, licences) | Source country: at most 12.5%; the country of residence relieves double taxation. | Art. 12(2) |
| Technical, consulting, management services | Source country: at most 12.5%; the country of residence relieves double taxation. | Art. 13(2)–(3) |
| Sale of property or shares | Real estate: the country where it is located may tax. Shares of companies deriving their value mainly from real estate: the same. Other property: under certain conditions the source country may also tax (see the article). | Art. 14(1) |
| Other income | The source country may tax; the country of residence relieves double taxation. | No other-income article |
How double taxation is relieved
- United Kingdom: credit for the tax paid in the source country, up to the country’s own tax on that income Art. 23(1)
- Pakistan: credit for the tax paid in the source country, up to the country’s own tax on that income Art. 23(2)
Data checked: 10/11/2026. A short summary for individuals; the full conditions, exceptions and protocols are in the treaty text. General information, not legal advice.