In the evolving financial landscape of Pakistan, cryptocurrency is no longer a niche topic. With growing interest in Bitcoin, Ethereum, and other digital assets, Pakistani investors are diving into the crypto space with increasing enthusiasm. However, this digital gold rush brings with it a complex and often overlooked aspect: Crypto Tax in Pakistan.
While the State Bank of Pakistan (SBP) has not yet formally recognized cryptocurrency as legal tender, the Federal Board of Revenue (FBR) has begun to pay close attention to crypto transactions. Whether you’re a casual investor, full-time trader, or crypto miner, understanding the tax implications is now essential to avoid legal complications and penalties.
In this detailed guide, we will explore everything you need to know about crypto tax in Pakistan, including its current legal status, taxability under Pakistani law, calculation methods, reporting obligations, and how professional tax advisors like Scounts can help.
Table of Contents
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What is Cryptocurrency?
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Is Crypto Legal in Pakistan?
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Current Regulatory Framework
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Crypto Tax in Pakistan – What Does the Law Say?
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Capital Gains Tax on Crypto
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Crypto Mining and Tax Implications
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Crypto Received as Salary or Payment
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Reporting Crypto Holdings to FBR
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International Examples and Their Impact on Pakistan
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Challenges in Crypto Taxation
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Scounts: Your Crypto Tax Filing Partner
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FAQs
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Final Thoughts
1. What is Cryptocurrency?
Cryptocurrency is a digital or virtual form of money that uses cryptography for security and operates on decentralized networks, often powered by blockchain technology. Popular examples include:
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Bitcoin (BTC)
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Ethereum (ETH)
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Binance Coin (BNB)
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Tether (USDT)
Unlike fiat currencies (e.g., PKR), cryptocurrencies are not issued by central banks, making their legal classification and tax treatment a gray area in many countries, including Pakistan.
2. Is Crypto Legal in Pakistan?
As of August 2025, cryptocurrencies are not recognized as legal tender by the SBP. However, there is no law that outright bans possession or investment in crypto assets.
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In 2018, SBP issued a circular prohibiting banks and financial institutions from dealing in virtual currencies.
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In 2023, the Ministry of Finance and FBR began preliminary consultations to understand crypto and implement a regulatory framework.
Thus, owning or investing in crypto is not illegal, but it’s done at the investor’s own risk and is subject to scrutiny by FBR.
3. Current Regulatory Framework
Currently, there is no specific law in Pakistan that governs cryptocurrency. However, the FBR has started including digital assets as a category for tax purposes.
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FBR notices have been issued to crypto traders.
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Crypto wallets and exchanges are being monitored.
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FATF recommendations have prompted Pakistan to improve AML/CFT measures in the crypto space.
In simple terms, even without full legalization, your crypto profits are not invisible to the taxman.
4. Crypto Tax in Pakistan – What Does the Law Say?
While there is no crypto-specific tax law yet, digital assets fall under existing tax provisions:
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Capital Gains Tax (CGT) under the Income Tax Ordinance, 2001
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Income from Other Sources, if CGT does not apply
The FBR considers profits made from selling crypto as taxable income. Whether you trade on Binance, hold Ethereum in a wallet, or receive Bitcoin as payment — you may be liable to pay taxes.
5. Capital Gains Tax on Crypto
If you buy cryptocurrency and later sell it for a profit, that gain is subject to Capital Gains Tax.
CGT Treatment:
| Holding Period | Tax Rate |
|---|---|
| Less than 1 year | Up to 15% |
| More than 1 year | 0% to 10%, depending on asset class & threshold |
Currently, crypto is treated as a movable asset, and CGT may apply similar to securities or property. However, rates and applicability vary, so it’s important to consult a tax advisor.
6. Crypto Mining and Tax Implications
If you mine cryptocurrency in Pakistan, the value of mined coins is considered income, and is taxable under the “Income from Business or Profession” category.
Key Considerations:
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The value of crypto at the time of receipt is taxable.
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Mining equipment costs may be deductible as capital expenditure.
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Electricity and internet bills may be claimed as business expenses.
This is especially relevant for freelancers and tech entrepreneurs using mining rigs at home.
7. Crypto Received as Salary or Payment
Freelancers, remote workers, and digital service providers often receive payment in cryptocurrency.
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The received amount is taxable in PKR equivalent at the time of receipt.
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If the crypto appreciates and is later sold, the capital gain is again taxable.
In such cases, there are two taxable events:
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Receipt of crypto (as income)
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Sale of crypto (as capital gain)
Proper bookkeeping is vital — a service Scounts provides for small businesses and individuals.
8. Reporting Crypto Holdings to FBR
Currently, FBR does not have a dedicated crypto declaration form. However, under:
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Section 114 of the Income Tax Ordinance, taxpayers must declare all assets
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Foreign Asset Reporting applies if crypto is held on international exchanges (e.g., Binance, Kraken, Coinbase)
Failure to report may trigger:
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Tax notices
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Penalties
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Asset freezing in some cases
In short, transparency is key, and Scounts can help you declare crypto legally.
9. International Examples and Their Impact on Pakistan
Countries like the United States, India, and UAE have already implemented crypto tax regulations. These models are influencing Pakistan’s policy direction.
| Country | Crypto Tax Summary |
|---|---|
| USA | Up to 37% on capital gains; strict reporting |
| India | Flat 30% on profits; 1% TDS on transactions |
| UAE | No personal income tax; tax for business income only |
Pakistan is likely to adopt a hybrid model, taxing crypto as an asset and requiring transparent disclosures.
10. Challenges in Crypto Taxation
Pakistan faces several hurdles:
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Lack of regulatory clarity
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Absence of crypto valuation benchmarks
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Limited technical expertise in FBR
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Public reluctance to disclose assets
But despite these issues, the direction is clear: crypto tax compliance will become mandatory in the coming years.
11. Scounts: Your Crypto Tax Filing Partner
Navigating crypto tax laws in Pakistan is complex. That’s where Scounts steps in.
We offer:
✅ NTN Registration & Tax Filing
✅ Capital Gains Tax Calculation on Crypto
✅ Bookkeeping & Crypto Transaction Records
✅ FBR Audit Defense & Response to Notices
✅ Foreign Asset Reporting Guidance
Whether you’re an individual investor, freelancer, or small business, Scounts provides tailored solutions to ensure full compliance with Pakistan’s evolving crypto tax framework.
💡 Want to stay on the right side of the law while growing your crypto portfolio? Get in touch with Scounts today.
12. FAQs
Q: Is buying crypto illegal in Pakistan?
A: No. It’s not illegal, but crypto is unregulated. You trade at your own risk.
Q: Do I need to declare my crypto income in tax returns?
A: Yes. Any gains or income from crypto should be declared to avoid penalties.
Q: Will I be taxed if I just hold crypto and don’t sell?
A: Holding is not taxable, but selling or receiving crypto as income is.
Q: What if I use crypto wallets like MetaMask or Trust Wallet?
A: Even decentralized wallets are subject to tax if gains are realized.
Q: Can Scounts help with past unreported crypto income?
A: Yes, we offer retrospective tax solutions and help with compliance.
