Bangladesh Corporate Tax Guide
Understanding the exact Bangladesh Corporate Tax Rate is crucial for your business. This ultimate Bangladesh Company Tax Guide explores statutory rates, allowable expenses, and compliance deadlines. Validated against the Income Tax Act 2023.
Calculate Your Bangladesh Corporate Tax Rate
Use our interactive profiler to determine your exact statutory obligation. LegalSeba LLP advises all entities to strictly follow Section 30 banking rules to prevent an artificial hike in your effective Bangladesh Corporate Tax Rate.
Toggle off if single expenses > BDT 500k or annual > BDT 3.6M are made in cash (Sec 30).
Proof of Submission of Return. Failing to present triggers a 50% higher TDS rate.
Statutory Rate Benchmarks
Bangladesh Business Tax Guide: Allowable Expenses
Under the Income Tax Act, 2023, expenses must be incurred wholly and exclusively for business operations. As a Leading Bangladesh Corporate Tax Law Firm, LegalSeba LLP helps clients meticulously structure accounts to claim these deductions lawfully and optimize your overall Bangladesh Corporate Tax Rate.
Strict Disallowances (Section 55)
Genuine business expenses are entirely disallowed (added back to taxable profit) under these conditions:
- • Failure to deduct and deposit TDS/VDS to the government treasury.
- • Payments exceeding BDT 50,000 in a single transaction, or BDT 500,000 annually, made in cash.
- • Non-cash benefits (perquisites) given to employees exceeding BDT 1,000,000 annually.
General Expenses
The residual clause for daily operational costs not specifically mentioned elsewhere, provided they are revenue in nature.
Rent & Taxes
Rent for official business premises and municipal taxes. TDS must be properly deducted when paying the landlord.
Repairs & Insurance
Routine maintenance and insurance premiums for business assets. Does not apply to personal assets of directors.
Bad Debts
Deductible once completely irrecoverable and actually written off in financial books. If recovered later, it is taxable.
Depreciation
Depreciation for passenger vehicles is capped at a cost base of BDT 3 million. Pre-commencement expenses amortized at 20%.
Salaries & Perqs
Salaries >20,000/month must be paid via bank. Non-cash perquisites are strictly capped at BDT 1,000,000 per employee/year.
Travel & Promo
Foreign travel is restricted to 1.25% of disclosed turnover. Promotional expenses are restricted to 0.5%.
Royalties & Tech
Capped at 10% of net profit for the first three years of business operations, and 8% for subsequent years.
Interest on Capital
Interest paid on capital borrowed for business is allowable. Must be capitalized before a new asset is put into commercial use.
Bangladesh Business Tax Guide: Sectoral Exemptions
The Income Tax Act 2023 grants significant tax reliefs to priority sectors. LegalSeba LLP assists Technology, RMG, Energy, and Agricultural companies in securing these statutory exemptions efficiently.
Solar & Energy Infrastructure
Private power generation companies (excluding coal) and solar/renewable energy projects frequently enjoy massive tax holidays ranging from 10 to 15 years under specific NBR SROs (e.g., SRO 211-Law/2013).
Public-Private Partnerships (PPP)
National infrastructure projects executed under the PPP framework (ports, highways, mass transit) are eligible for a 10-year phased tax holiday. We ensure PPP contracts align flawlessly with tax exemption prerequisites.
Technology & ITES
Information Technology Enabled Services (ITES) and software firms benefit from full tax exemptions. A strict condition mandates all business receipts must be routed exclusively through banking channels. Startups also enjoy specific legal carve-outs.
RMG & Textiles
Ready-Made Garment (RMG) and textile manufacturers operate under heavily reduced corporate tax rates—typically 12%, or 10% for internationally recognized green (LEED-certified) factories.
Agriculture & Poultry
Income derived from fisheries, pelagic fishing, poultry farming, and specific agro-processing industries enjoy concessionary slab rates and partial tax holidays, promoting local food security and mass production.
Physical Infrastructure
Companies establishing physical infrastructure facilities (deep-sea ports, elevated expressways, large-scale water treatment plants) are eligible for tapered tax holidays, generally scaling down over a 10-year horizon.
Economic Zone Tax Holidays
While the standard Bangladesh Corporate Tax Rate applies to most, Economic Zone investors benefit from a 10-year tapered tax holiday under SRO 244-Law/2024. For detailed funding mechanics, consult our Bangladesh Economic Zone Financing Guide. (Excludes edible oil, sugar, cement, and iron products).
Dividends & Capital Gains
100% exemption on dividends and capital gains from share transfers for 10 years for EZ unit investors.
Royalties & Tech Fees
100% income tax exemption on royalties and technical assistance fees for 10 years.
Expatriate Income
Exemption from Income Tax on the salary of foreign expatriates working in the unit for 3 years.
Branch vs Liaison Office Tax Guide
Understanding the fundamental legal and tax distinctions for foreign entities operating in Bangladesh. Need guidance? Consult a Bangladesh Corporate Tax Lawyer.
Branch
Revenue-Generating
- Commercial Activity Legally permitted to execute commercial contracts, trade, and generate local revenue.
- Tax Status Taxed at standard corporate rates (27.5%). Subject to 0.60% minimum tax on gross receipts.
- Repatriation Can remit post-tax profits subject to a 20% Branch Remittance Tax (subject to DTAA).
Liaison
Cost Center Support
- No Revenue Allowed Strictly forbidden from generating local income. Entirely funded via inward remittances.
- Tax Status 0% corporate tax base on income.
- Mandatory Withholding Agent Despite 0% tax, MUST obtain TIN, file zero returns, and deduct TDS on salaries and rent.
Bangladesh Company Tax Submission Services & Deadlines
Maintaining active corporate standing requires strict adherence to annual filing schedules. LegalSeba LLP provides complete Bangladesh Company Tax Submission Services to eliminate default risks.
Income Tax Return
Must be filed by the 15th day of the 7th month following the end of the income year.
Penalty: 10% of last assessed tax or BDT 1,000, plus BDT 50 per day.
Annual Return
Schedule X, Balance Sheet, and P&L must be filed within 30 days of the AGM.
Penalty: Incremental late fees calculated per day of default.
Monthly VAT Return
Must be submitted by the 15th day of the following month for all registered entities.
Penalty: BDT 10,000 for non-submission, plus 2% interest per month.
Withholding Tax Return
Deductions on salaries, rent, and vendor payments must be filed by the 15th of the following month, with a consolidated return filed half-yearly.
Penalty: Disallowance of the entire expense (Sec 55), plus per-day delay fines.
Trade License
Must be renewed annually between 1st July and 30th September without surcharge.
Penalty: Monthly percentage-based surcharge added after Sept 30th.
Verified Compliance Mandates
Document Verification Code (DVC)
Under the NBR Audit Guideline, validating the DVC on audited financial statements is a mandatory audit check. Without a valid ICAB DVS code, financials may be rejected resulting in Best Judgment Assessments.
PSR vs eTIN Distinction
An eTIN certificate is no longer sufficient. Companies must provide Proof of Submission of Return (PSR). Payers must deduct Tax at Source (TDS) at a 50% higher rate if PSR is absent.
Internal & External Resources
Essential portals and detailed guides curated by LegalSeba LLP for operating a compliant corporate entity in Bangladesh.
Government Portals
- National Board of Revenue (NBR)
- Registrar of Joint Stock (RJSC)
- Bangladesh Investment Dev. Authority
- Bangladesh Economic Zones (BEZA)
- Export Processing Zones (BEPZA)
- Bangladesh Bank
- Securities and Exchange (BSEC)
- Hi-Tech Park Authority (BHTPA)
- Inspection for Factories (DIFE)
- Standard Testing Institute (BSTI)
Tax & FDI Guides
Company & Startups
Secure Your Corporate Compliance
Navigating the intricacies of the Income Tax Act 2023, NBR audits, and annual RJSC filings requires expert precision. As a leading corporate law firm in Bangladesh, LegalSeba LLP assists clients through comprehensive tax planning, seamless statutory reporting, and robust audit defense. Ensure your enterprise remains penalty-free and fully optimized with our dedicated corporate advisory services.
