Treaty detail
United States - Pakistan tax treaty
A practical treaty page built around the official treaty text, key withholding categories, permanent-establishment rules, and article-level summaries.
Signed
1957-07-01
Effective
1959-01-01
Articles seeded
6
Withholding snapshot
Dividends
Individual rate: 30% · Corporate rate: 15%
The U.S.-Pakistan treaty is one of the oldest U.S. treaties still in force and uses unusual mechanics that look different from modern treaty-table entries. The reduced corporate rate generally requires substantial ownership, and the 30 percent ceiling for many other dividend payments reflects domestic U.S. and Pakistani statutory rates rather than a modern treaty reduction. Article-level review is essential.
Interest
Rate: 30%
Unlike modern U.S. treaties, the 1957 Pakistan treaty does not generally reduce interest withholding below domestic-law rates for most categories. Practitioners must work from the article text rather than relying on a single Treaty Table 1 entry.
Royalties
Rate: 0%
The Pakistan treaty has historically produced reduced or zero outcomes for certain copyright royalties, but the overall structure is atypical and other royalty categories may still face domestic rates. Article-level review is required.
Permanent establishment
Construction threshold: older 1957 wording; article-level review required
The Pakistan treaty's dependent-agent rules use older drafting conventions and should not be analogized to modern OECD-style language without article-level review.
Other treaty flags
Pension treatment under the 1957 treaty is unusual and follows older drafting conventions. Government-service pensions and private pensions both require article-level review.
Seeded article summaries
Article 4
Residence
Defines treaty residence and the gateway to any reduced withholding or treaty protection.
Residence analysis under the 1957 Pakistan treaty looks materially different from modern OECD-style treaties. Tie-breaker rules exist but are framed in the older language of the period, and practitioners should not assume parallel application with current treaties.
Article 5
Permanent Establishment
Sets the business-presence threshold that permits source-country taxation of business profits.
The Pakistan treaty's PE article reflects 1950s-era drafting and does not align cleanly with modern OECD model provisions. Construction-and-installation thresholds and dependent-agent rules use older terminology, and Article-level reading is essential.
Article 7
Business Profits
Generally reserves business profits to the residence state unless a permanent establishment exists in the other state.
This article remains the operating rule once a PE analysis is complete, but the older treaty wording can lead to results different from modern U.S. treaties. Care should be taken before extrapolating analysis from newer treaties.
Article 10
Dividends
Provides limited treaty mechanics for source-country dividend withholding.
The dividend mechanics under the Pakistan treaty are unusual and largely operate by allowing credit and limited rate ceilings rather than the parent-subsidiary reductions familiar in modern U.S. treaties. Article and protocol review is mandatory.
Article 11
Interest
Provides limited treaty mechanics for source-country interest withholding.
Unlike modern U.S. treaties, the 1957 Pakistan treaty does not eliminate interest withholding outright and the article should be read alongside domestic-law rates rather than as a standalone rate-reduction tool.
Article 12
Royalties
Provides limited treaty mechanics for source-country royalty withholding.
The Pakistan treaty's royalty article has historically supported reduced outcomes for certain categories of copyright royalties, but the overall result depends on article wording and category-by-category review.
Official text
Other treaties involving these jurisdictions
Computed from the cross-reference graph. Links open the related entity on this site.
This entry cites
- TreatyUS–GB treaty
- TreatyUS–CA treaty
- TreatyUS–DE treaty
- TreatyUS–FR treaty
- TreatyUS–JP treaty
- TreatyUS–NL treaty
- TreatyUS–AU treaty
- TreatyUS–KR treaty
Primary sources
- Pakistan treaty documents pageVerified 2026-05-20
- Official U.S.-Pakistan treaty PDFVerified 2026-05-20
- IRS Tax Treaty Table 1Verified 2026-05-20
- Treasury treaties in force listVerified 2026-05-20
Important disclaimer
This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.