Investment Incentives, Privileges and Facilities

What types of incentives are available for industries registered with BIDA?

Oct 07, 2021

The projects registered with BIDA can avail following tax related fiscal incentives: Import duty exemption - 1% on capital machinery/ spares for export-oriented industries and allowed to import spare parts free of duty for up to 10% of the machinery value every two years.

• 3% on capital machinery/ spares for other industries.
• VAT is not payable for imported capital machinery/ spares. Accelerated depreciation - Possible for newly established industrial undertakings in lieu of tax exemption on factory, machinery/ plant, 50% for the 1st year, 30% for the 2nd year, and 20% for the 3rd year.
• Initial depreciation allowance is also available on machinery/ plant.Other tax exemptions - On interest payable on foreign loans (under certain conditions).
• On royalty, franchise, technical license/ know-how/ assistance fees to foreign entities.
• On personal income tax up to three years for foreign technicians employed in industries specified in the Income Tax Ordinance,1984 etc. Companies located in EZs/ EPZs are entitled to different sets of incentive package of tax exemption.