Pakistan - Business

Service Agreement

Agreement between a service provider and client defining the scope, terms, and conditions of services to be rendered in Pakistan.

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Instructions

How to create a Service Agreement in Pakistan:
1. Enter complete details of both the service provider and client, including CNIC/NTN and addresses.
2. Describe the services in detail, specify the total fee in PKR, and define clear payment terms.
3. Set the start and end dates. Review all clauses to ensure they align with the nature of services.
4. Both parties should sign and retain copies. Consider notarization for higher-value agreements.

Frequently Asked Questions

Is a service agreement the same as an employment contract?

No, a service agreement is between an independent contractor and a client. An employment contract creates an employer-employee relationship with different legal obligations under Pakistan labour laws.

Is withholding tax applicable?

Yes, withholding tax is applicable on service payments as per the Income Tax Ordinance, 2001. The rate depends on whether the provider is a filer or non-filer with FBR.

Can the scope be changed mid-contract?

Yes, but changes must be agreed upon in writing by both parties through a formal amendment.

What happens if the provider fails to deliver?

The client may terminate the agreement and seek damages through arbitration or courts as specified in the agreement.

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