In Pakistan, the income of a nonresident is subject to tax only to the extent that it is derived from a source in Pakistan. This means that foreign-sourced income is generally not subject to tax in Pakistan. The income of a resident, however, is subject to tax regardless of the source of the income. This includes income derived from foreign sources, such as interest and dividends. For Pakistani companies, corporate taxes are applicable on all income generated within Pakistan, as well as income derived from foreign sources. The applicable rate of corporate tax depends on the type of business and the total taxable income. In addition to corporate taxes, Pakistan also imposes taxes on capital gains and indirect taxes, such as sales tax and value added tax. In order to avoid double taxation on foreign-sourced income, Pakistan has entered into numerous tax treaties with various countries. These treaties provide for the exemption of certain types of income from taxation in both countries and give the right to claim tax credits for taxes paid in the other country. Finally, Pakistani nationals are subject to tax on their worldwide income. This includes income earned from foreign sources, such as interest, dividends, and capital gains.