Bangladesh Tax Handbook 2017 2018 Final

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Bangladesh Tax Handbook
2017 - 2018
Foreword
Taxation is an arena that impacts every walk
of life–from individuals to big corporates and
conglomerates. Being up to date on relevant
taxation laws gives anyone an upper hand in
ensuring legal compliance along with avoidance
of excessive taxation.
The Bangladesh Tax Handbook 2017 - 2018
summarizes the salient features of the laws and
rules of Income Tax, Value Added Tax and Gift Tax
and any changes brought to them through the
Finance Act, 2017 (effective from 1 July 2017).
It has been our humble effort to express the
intricate provisions of various taxation laws in
layman’s words to make it easily comprehendible.
This publication is intended to provide general Editorial Board
guidance, rather than a comprehensive one,
Baizid Md. Faiaz, MBA
on matters of conventional interest of our Sushmita Noor, BBA
valued clients, business houses and potential
investors. We have given our every effort to Advisory Board
ensure correctness of information and accuracy Nurul Haque, FCA
of presentation of the matters presented in Faruk U. Ahammed, FCA
this book. However, readers should always Nehal Ahmed, FCA
seek professional advice before acting on any Md. Shamsur Rahman, FCA
information provided in this tax handbook. Md. Roknuzzaman, ACA
For further information and assistance or Business Consulting Services

professional advice please feel free to contact
our office. Contact us
Phone : +880-9611002202,
+880-2-8413114
Fax : +880-2-8417979
E-mail : infobcs@bdo.com.bd
www.bdo.com.bd/bcs
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No part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any
form or by any means, electronic, mechanical,
photocopying, recording, or otherwise without
prior written permission of the publisher.
Table of Contents
MAJOR CHANGES IN 2017 - 2018............................................................... 1
1. Major changes in Income Tax............................................................... 3
2. Major changes in Value Added Tax (VAT).................................................15
SUMMARY OF INCOME TAX...................................................................... 17

3. Important definitions.......................................................................19
INCOME ............................................................................................ 21
4. Residential status...........................................................................21
5. Scope of total income......................................................................21
6. Heads of income.............................................................................22
7. Income from salary..........................................................................22
8. Interest on securities.......................................................................25
9. Income from house property..............................................................25
10. Agricultural income.........................................................................26
11. Income from business or profession......................................................28
11.1 Admissible deductions...............................................................28
11.2 Deductions not admissible in certain circumstances............................31
11.3 Normal depreciation allowance....................................................33
11.4 Initial depreciation allowance......................................................34
11.5 Accelerated depreciation allowance..............................................35
11.6 Amortization of license fees........................................................35
12. Capital gains.................................................................................36
13. Income from other sources................................................................37
14. Deemed income.............................................................................38
TAX RATE STRUCTURE........................................................................... 41

15. Personal tax rate structure................................................................41
15.1 Tax on capital gain....................................................................42
15.2 Other tax rates .......................................................................42
15.3 Surcharge on individual assessee...................................................42
15.4 Tax on non-resident assessee.......................................................43
Bangladesh Tax Handbook 2017 – 2018

16. Corporate tax rate structure..............................................................43
16.1 Additional tax.........................................................................44
17. Minimum tax.................................................................................45
17.1 Based on class of assessee...........................................................45
17.1.1 Individual, HUF, Firm, AOP, AJP............................................45
17.1.2 Company and Firm...........................................................46
17.2 Based on source of income..........................................................46
17.3 Determination of income, tax liability and minimum tax......................48
18. Tax deducted at source.....................................................................51
19. Set-off and carry forward of losses.......................................................64
20. Carry forward of depreciation allowance...............................................65
FILING OF RETURN & PAYMENT OF TAX...................................................... 66

21. Filing of return of income..................................................................66
21.1 Schedules and documents to be submitted with return of income...........68
22. Filing of revised return.....................................................................69
23. Return of withholding tax..................................................................69
24. Payment of tax on the basis of return...................................................70
25. Payment of tax deducted at source......................................................70
26. Advance payment of tax...................................................................71
26.1 Advance tax based on income......................................................71
26.2 Advance tax on cigarette manufacturers.........................................71
26.3 Advance tax on private motor car owners........................................71
27. Mode of payment............................................................................72
ASSESSMENT .......................................................................................73
28. Provisional assessment.....................................................................73
29. Assessment on correct return.............................................................73
30. Universal self-assessment..................................................................73
31. Spot assessment.............................................................................74
32. Assessment after hearing..................................................................74
33. Assessment on the basis of report of a Chartered Accountant.......................75
34. Best judgement assessment...............................................................75
35. Other assessments..........................................................................75

TAX INCENTIVE.................................................................................... 76
36. Tax exemption...............................................................................76
37. Reduced rate of tax....................................................................... 103
38. Tax rebate.................................................................................. 108
39. Conditions for tax exemption for newly established industrial undertakings and
physical infrastructure facilities........................................................ 111
40. Investment allowances eligible for tax credit........................................ 111
41. CSR activities eligible for tax credit................................................... 113
42. Special tax treatment.................................................................... 114
43. Avoidance of double taxation........................................................... 115
TRANSFER PRICING..............................................................................116
44. Transfer pricing............................................................................ 116
44.1 Computation of arm’s length price.............................................. 116
44.2 Maintenance and keeping of information, documents and records ........ 117
44.3 Submission of statement of international transaction ....................... 118
44.4 Report from an accountant to be furnished.................................... 118
44.5 Procedure from record keeping to submission of return..................... 119
44.6 Assessment procedure............................................................. 120
OFFENCES, PENALTIES & PUNISHMENTS....................................................121

45. Offences, penalties & punishments..................................................... 121
SUMMARY OF VALUE ADDED TAX.............................................................125

46. Taxes imposed under VAT Act, 1991.................................................... 127
47. Goods and services chargeable to VAT................................................. 127
48. Persons responsible to pay VAT ......................................................... 127
49. VAT deduction at source.................................................................. 128
50. Deposit of deducted VAT................................................................. 128
51. Scope of VAT and specified rates........................................................ 129
SUMMARY OF GIFT TAX.........................................................................133

52. Gift tax ..................................................................................... 135
53. Exemption from gift tax ................................................................. 135
54. Rates of gift tax........................................................................... 136
55. Return of gift tax.......................................................................... 136

MAJOR CHANGES IN
2017 - 2018
Bangladesh Tax Handbook 2017 – 2018 1 | Page

Business Consulting Services, a Bangladeshi registered
partnership firm, is a member of BDO International
Limited, a UK company limited by guarantee.

1. Major changes in Income Tax
1.1 Personal tax rate structure [Finance Act, 2017]
There has not been much change in the 6 tier income slabs and tax
rate structure applicable for individual assessee (including non-resident
Bangladeshi), Hindu undivided family, partnership firm, association of
persons and artificial juridical person applicable for the Income Year
2016 - 2017 and Assessment Year 2017 - 2018. The only change made is
the increase in the exemption limit for persons with disability from Tk.
375,000 to Tk. 400,000.
The following table shows a comparative analysis of the personal tax rate
structure between Assessment Years 2017 - 2018 and 2016 – 2017 –
Assessment Year: 2017 - 2018 Assessment Year: 2016 – 2017

(Income Year: 2016 - 2017) (Income Year: 2015 - 2016)
Income Rate Income Rate

of tax of tax
On the first Tk. 250,000 Nil On the first Tk. 250,000 Nil
of total income of male of total income of male
assesse assesse
of total income of female of total income of female
assesse assesse
of total income of of total income of
persons aged 65 years & persons aged 65 years &
above above
of total income of person of total income of person
with disability with disability
of total income for of total income for
gazetted war wounded gazetted war wounded
freedom fighters freedom fighters
On the next Tk. 400,000 10% On the next Tk. 400,000 10%
of total income of total income
On the next Tk. 25% On the next Tk. 3,000,000 25%
3,000,000 of total income of total income

Assessment Year: 2017 - 2018 Assessment Year: 2016 – 2017
(Income Year: 2016 - 2017) (Income Year: 2015 - 2016)
Income Rate Income Rate

of tax of tax
On the balance of total 30% On the balance of total 30%
income income
Non-resident individual 30% Non-resident individual 30%
foreigner assessee foreigner assessee
1.2 Surcharge on individual assessee [Finance Act, 2017]

The surcharge on tax applicable for individual assessees has remained
unchanged for Assessment Year 2017 – 2018.
However, surcharge has been introduced on assessees engaged in
manufacturing biri, jorda, gul and or tobacco products at 2.5% on income
from such business. Such surcharge will be imposed on all classes of
assessee (individual, company etc.)
An individual assessee engaged in the business of manufacturing biri,
jorda, gul or other tobacco products and having net wealth exceeding Tk.
2.25 crore will have to pay both of the above surcharges.
1.3 Corporate tax rate [Finance Act, 2017]

The corporate tax rate structure has remained unchanged for Assessment
Year 2017 – 2018. Chapter 16 Corporate tax rate structure elaborates
the applicable rates.
1.4 Definitions [Section – 2]

ff Dividend [Section – 2(26)]: Section – 2(26) has been amended
including any distribution of profit of a mutual fund or an
alternative investment fund within the scope of dividend
ff Income year [Section – 2(35)]: The proviso of Section – 2(35) has
been amended providing the option of a different income year
for a subsidiary, sub-subsidiary, branch office or liaison office of a
parent company incorporated outside Bangladesh, for the purpose
of consolidation of accounts with the parent company, upon
approval of the Deputy Commissioner of Taxes
ff Tax day [Section – 2(62A)]: Section – 2(62A) has been amended
specifying that the tax day for a company, for whom 15th day of the
7th month following the income year falls before 15th September of
the assessment year, to be 15th September of the assessment year

1.5 Un-explained investments, etc., deemed to be income [Section – 19]
2 changes have been made in Section – 19. A summary of the changes is
given below –
ff Section - 19(28): A proviso regarding loan or gift received from
spouse or parents has been added. If any person receives a loan or
gift from spouse or parents, such loan or gift will not be treated as
income of such person provided that a banking or formal channel
is involved in the process.
Reflection of the loan or gift in the bank statement of either the
receiver or the provider will be considered as involvement of a
banking channel.
Utilization of cash received as gift or loan to acquire any formal
asset (such as FDR, savings instrument, apartment etc.) will be
considered as involvement of a formal channel. However, the
formal asset acquired has to be specific. Declaration or affidavit
for cash gift / loan and reflection of it in the returns of income of
the receiver and the provider would not be sufficient in this regard
and the cash gift / loan will be treated as income of the receiver.
ff Section - 19(31): Section – 19(31) has been replaced. Amended
return of income filed under Section – 82BB has been brought
within the scope of this section. Thus any additional income
subject to tax exemption or reduced tax rate as shown in any
revised or amended return filed under Section – 78, 82BB and 93
compared to the original return will be deemed as income from
other source.
1.6 Salary paid to employees failing to file return of income [Section –

30(aaaa)]
A new clause (aaaa) has been added making an employer responsible to
appraise the obligation of its employees to file return of income. If an
employee who is required to but has not filed return of income or has not
obtained time extension either, any salary paid to such employee after
his / her tax day will not be admissible as deduction from income from
business or profession of the employer.
1.7 Overseas travelling expenditure for services provided to the

Government [Section – 30(k)]
A new proviso has been added withdrawing any limit on overseas
travelling expenditure of an assessee engaged in providing services to
the Government, making full of such expenditure deductible from income
from business or professions. However to be entitled for the deduction,
such overseas travelling has to be a key requirement of the services
provided directly to the Government.

1.8 12-Digit TIN required for certain cases for expenses to be deductible
[Section – 30(o)]
A new clause has been added making any payment made to certain persons,
who are required to but have not obtained 12-digit TIN, inadmissible as
deduction from income from business or profession of the assessee. This
clause will be applicable for payment to the following persons –
ff Agent or distributor of any company
ff Person receiving commission, fee or other sum for money transfer
through mobile banking or other electronic means and recharge of
mobile phone account
ff Resident person providing advisory or consultancy service, catering
service, event management service, manpower supply service or
security service to a company
1.9 Deduction at source from payment to contractors, etc. [Section – 52;

Rule - 16]
The proviso of Section – 52 has been replaced introducing the following
changes –
ff The cases where supply of goods represents purchase of direct
materials that constitutes cost of sales or cost of goods sold of a
trading company or a manufacturing company have been scoped
out from the requirement of tax deduction at source.
This exemption will not be applicable for purchase relating to indirect
materials, overheads, rendering services or processing function.
The cases where imported goods are supplied and tax has been
paid at source during import under Section - 53, tax to be deducted
at source on supply under Section – 52 has been determined to be
as (Tax deduction at source under Section – 52, if no tax under
Section – 53 was paid less Tax paid under Section – 53).
ff This provision will be applicable only if the importer and the
supplier is the same person and the goods have been supplied
without any processing done.
The applicable rates for deduction of tax have been elaborated in Rule – 16.
1.10 Deduction at source from payment of certain services [Section 52AA]

Section – 52AA has been replaced restructuring the provisions of tax to
be deducted at source from any payments made to any resident assessee
regarding certain services.
Payments for creative media service, public relations service, event
management service and media buying agency service have been brought
within the scope of tax deducted at source.

The updated rates of tax to be deducted at source have been incorporated
in Chapter 18 Tax deducted at source.
1.11 Deduction of tax at source from receipts in respect of international

phone call [Section- 52R]
A new clause – 2A has been inserted imposing 7.5% tax to be deducted at
source from payment made for outgoing international calls by ICX service
provider or ANS service provider.
1.12 Deduction or collection at source from commission, discount or fees

etc. [Section – 53E]
Section – 53E has been replaced restructuring the rate of tax to be
deducted at source from payments made for distribution or marketing
activities as follows –
ff Commission, discount, fees, incentives, performance bonus, other
performance related incentive, benefit paid for distribution or
marketing of goods: tax to be deducted at source at 10%
ff Payments for promotion of a company or its goods: tax to be
deducted at source at 1.5%
The provision regarding any company (except for oil marketing company)
selling goods to (a) any distributor or (b) any other person under a contract
at a price lower than the fixed retail price has been retained.
1.13 Deduction from income of non-residents [Section - 56]

Section – 56 has been amended imposing tax to be deducted at source
from payments made to any non-resident assessee for digital marketing
services at 15%.
The updated rates of tax to be deducted at source have been incorporated
in Chapter 18 Tax deducted at source
1.14 Delay interest for not filing return on or before the Tax Day [Section – 73A]
The explanation of ‘tax assessed on total income’ has been amended to
provide clarification regarding the amount on which amount delay interest
will be imposed. If the return of income filed is subject to assessment
under Section – 82BB, the tax assessed on total income will be higher of
(a) tax under Section – 82BB(1) and (b) tax under other sub-sections of
Section – 82BB.
1.15 Return of income [Section – 75]

Section – 75 has been amended scoping in employees holding executive
or management positions in a business or profession within the net of
persons required to file return of income.

Moreover, Government officials engaged in training on deputation or
leave or employed under lien outside Bangladesh has also been scoped
in within the persons responsible for filing return or returns for period of
deputation or lien, within three months of return to Bangladesh.
1.16 Production of accounts and documents [Section – 79]

Section – 79 has been replaced restructuring the provisions regarding
production of accounts, statements, documents, data or electronic
record by an assessee as required by the DCT. The DCT may require an
assessee, who has filed a return under Chapter – VIII of ITO, 1984 or who
has been served a notice to file return of income, to produce such items
for the purpose of audit or assessment. The time limit of 3 years beyond
which the required items cannot extend has been retained.
1.17 Statements of assets, liabilities and lifestyle [Section – 80]

Section – 80 has been amended increasing the gross wealth threshold for
individual assessees required to furnish statements of assets, liabilities
and life style from Tk. 2,000,000 to Tk. 2,500,000.
1.18 Universal self-assessment [Section – 82BB]

Section – 82BB has been replaced restructuring the provisions regarding
filing of return, amended return and revised return after audit under
universal self-assessment.
A provision of filing an amended return has been added for the following cases -
ff Where the processing of return performed by the DCT results in
a difference in income, tax or other material figures from the
original return
ff Where any shortfall in tax or other payable amount arises in the
original return due to unintentional mistakes by the assessee such
as under-reporting income; over-reporting rebate, exemption,
credit; other reasons
A provision of filing an amended return has been added for the cases
where audit of return or amended return identifies any discrepancies.
The conditions for no questions to be asked regarding the source of initial
capital of a business or profession of a new assessee have been amended.
The updated provisions and conditions have been elaborated in Chapter
30 Universal self-assessment
1.19 Minimum tax [Section – 82C]

Section – 82C has been amended brining Section – 53E within the scope
of minimum tax. Tax deducted or collected from commission, discount,

fees, incentive, performance bonus, benefits received for distribution,
marketing, promotion activities will be considered as minimum tax for
income of this source.
1.20 Tax, etc. escaping payment [Section – 93]

Section – 93 has been replaced restructuring the provisions regarding
escape of any payment by an assessee. If the DCT has reason to believe
based on audit, assessment or other proceedings that an assessee has
escaped any payment due, he / she may issue a notice requiring such
assessee to file return along with applicable statements & documents and
pay the escaped amount. If the assessee fails to fulfil the requirements,
the DCT will make the assessment after hearing or based on best
judgement under Section – 83 and 84 respectively.
The time limit within which the DCT can issue a notice pursuing escaped
payment is as follows –
ff No return filed and no assessment made: any time
ff No return filed but assessment completed: within 6 years from the
end of relevant assessment year
ff Other cases: within 5 years from the end of relevant assessment
year
1.21 Limitation for assessment [Section – 94]

Sub-section - (1) and (2) has been replaced to ensure consistency with the
changes in Section – 82BB and 93, while retaining the time limits as before.
1.22 Liability to tax in case of shipping business of non-resident [Section – 102]

Section – 102 has been amended brining demurrage charge, handling
charge and similar charges within the scope of income from shipping
business.
Such income will be included in return of income as below -
ff If such charges are accrued within 30 days of ship leaving the port:
included in the return to be submitted within 30 days of departure
of the ship
ff If such charges are accrued after 30 days of ship leaving the port:
supplementary return to be submitted within 30 days from the end
of the month in which such charges are accrued
1.23 Penalty for failure to verify Taxpayer’s Identification number, etc.

[Section – 124AA]
Section – 124AA has been replaced imposing penalty in the following cases –

ff Failure to obtain TIN while processing application, nomination;
approving license, certificate, membership, permission, admission,
agency, distributorship; sanctioning loan; issuing credit card;
allowing connection; executing registration; making payment as
required by Section – 184A(5): Maximum penalty of Tk. 200,000
has been introduced
ff Failure to verify the authenticity of the TIN furnished as required
by Section – 184A(6): Maximum penalty of Tk. 50,000 has been
retained
1.24 Revision of penalty based on revised amount of income [Section – 133A]

A new section has been inserted regarding revision of penalty based on
revised amount of income. If any penalty imposed is directly related to
the amount of income and such income is subsequently revised under the
provisions of the Ordinance, the penalty will also be revised based on the
revised income. However, if such revision results in increase of penalty,
the assessee will be given an opportunity of being heard.
1.25 Correction of errors [Section – 173]

Section – 173 has been amended allowing an income tax authority or
the Appellate Tribunal to amend any error made in any order passed,
which comes to notice through own motion or written application of the
assessee or other information. The time limit for such amendment has
been fixed up to 4 years from the date of the original order.
If an assessee submits an application notifying about any excess payment
made or any credit not being allowed, the DCT will credit the appropriate
amount in the relevant assessment year, provided that the claims are
valid and correct.
1.26 Requirement of twelve-digit Taxpayer’s Identification Number in

certain cases [Section – 184A]
Section – 184A has been replaced restructuring the provisions regarding
obtaining and verifying of 12-digit TIN in certain cases. The cases where
TIN was required to be furnished under the previous section have been
retained, although rephrased in certain cases to bring consistency.
However the following cases has been added where furnishing 12-digit
TIN has been made mandatory –
ff Obtaining or maintaining the agency or distributionship of a
company
ff Receiving any commission, fee or other sum for money transfer
through mobile banking or other electronic means or recharge of
mobile phone account
ff Receiving any payment from a company by a resident for

any advisory or consultancy service, catering service, event
management service, supply of manpower or security service
ff Submitting a bill of entry for import into or export from Bangladesh
1.27 Limit on deemed actual cost for motor vehicles in certain cases [Third
Schedule, Para – 6]
A new proviso has been added scoping out bus or minibus, not plying
for hire and used for the purposes stated below, from the limit of Tk.
2,500,000 on deemed actual cost in calculation of depreciation
ff Transporting students and teachers of an educational institution
ff Transporting employees of a business or profession
The actual cost of purchase will be used for calculation of depreciation
for such cases.
1.28 Sixth Schedule - Part A: Exclusions from total income

The changes in Sixth Schedule, Part – A has been summarized below –
ff Para – 33 has been replaced elaborating the fields of information
and technology sector for which income from such businesses are
exempted. The list of the fields are specified in Chapter - 36 Tax
exemption, Point 16 [Para – 33]
ff Para – 54 has been inserted allowing exemption to income from any
alternative investment fund recognized by Bangladesh Securities
and Exchange Commission (BSEC) [Para – 54]
ff Para – 55 has been inserted allowing exemption to any income
of Bangladesh Securities and Exchange Commission (BSEC) for
Assessment Years 1 July, 2017 – 30 June, 2022 [Para – 55]
ff Para – 56 has been inserted allowing exemption to honorarium or
allowance received from Bangladesh Freedom Fighters’ Welfare
Club and welfare allowance received from Government [Para – 56]
ff Para – 57 has been inserted allowing exemption to any reward
received from Government [Para – 57]
ff Para – 58 has been inserted allowing exemption to any income
derived from the operation of an elderly care home [Para – 58]

CHANGES REGARDING INCOME TAX RULES, 1984
[SRO 257 – AIN / IT / 2017 DATED 1 AUGUST 2017]
1.29 Deduction of tax from payment to contractors etc. [Rule - 16]

Rule – 16 has been replaced restructuring the rate of tax to be deducted
at source from payments made for execution of contract, supply of goods,
manufacturing, processing, conversion, printing, packaging, or binding
under Section - 52. The updated rates have been stated below –
Base amount Rate of deduction

of tax
Does not exceed Tk. 1,500,000 2%
Exceeds Tk. 1,500,000, up to Tk. 2,500,000 3%
Exceeds Tk. 100,000,000 7%
Tax to be deducted in certain cases has been specified as below -
Payments made to Rate of

deduction of tax
Payment up to Tk. 200,000 for oil supplied by oil nil
marketing companies
Payment exceeding Tk. 200,000 for oil supplied by oil 0.60%
marketing companies
Payment for oil supplied by dealer or agent (except 1%
for petrol pump)
Payment for oil supplied by any company engaged in 3%
oil refinery
Gas transmission company 3%
Gas distribution company 3%
1.30 Collection of tax from importers [Rule – 17A]

Rule – 17A has been replaced restructuring the rate of tax to be collected
at source in case of import of goods. The general rate has been fixed at
5%, while 2% and Tk. 800 per ton have been fixed for Table – 1 and Table
– 2 (as specified in Rule – 17A) respectively.

CHANGES INTRODUCED BY SRO
1.31 Tax benefits for PPP projects [SRO – 208 - AIN / IT / 2017; SRO – 209 -
AIN / IT / 2017; SRO – 210 - AIN / IT / 2017]
Tax benefits have been introduced for the following 14 PPP projects
through 3 separate SROs –
ff National highways, expressways, related service roads; flyovers;
elevated and at-grade expressways; river bridges; tunnels; river
port; sea port; airport; subway; monorail; railway; bus terminals,
bus depots, elderly care home
The tax benefits provided are stated below –
ff Income from such projects (income from business or profession):
Fully exempted for 10 years from the start of commercial operation
ff Capital gains form transfer of company’s share: Fully exempted for
10 years from the start of commercial operation
ff Royalties, technical know-how and technical assistance fees
payable: Fully exempted for 10 years from the start of commercial
operation
ff Income of expatriate technicians from working in such project
(income from salary): 50% exemption for 3 years from appointment
date (not applicable after 5 years of commencement of commercial
activities of the company)
1.32 Reduced rate of tax deducted at source for export [SRO – 256 – AIN /
IT / 2017]
The rate of tax to be deducted at source from export of certain items
(except for jute goods) under Section – 53BB and goods under Section –
53BBBB has been reduced to 0.70% from 1% for the period of 1 July 2017
to 30 June 2018.
1.33 Reduced rate of tax on income from export of knit wear and woven
garments [SRO – 255 – AIN / IT / 2017]
The knit wear and woven garments industry has been given the benefit of
reduced rate of tax on income from export of such goods as stated below –
ff For company: 12%
ff Company having internationally accredited Green Building
Certification for its factory: 10% for the respective year
ff For other assessees: Highest rate will be 12%
This reduced rate will be applicable for assessment year 2017 – 2018.

1.34 Tax exemption for Government employees [SRO – 211 – AIN / IT / 2017]
All benefits and allowances (except for basic salary, festival bonus and
bonus) received by a Government employee has been fully exempted
from tax.
1.35 Tax exemption for Bangladesh Securities and Exchange Commission

[SRO – 206 – AIN / IT / 2017]
SRO – 195 – AIN / IT / 2015 regarding gradually decreasing tax rate on
Bangladesh Securities and Exchange Commission (BSEC) has been repealed
and a new para, Para – 55, has been inserted in Sixth Schedule, Part – A
of ITO, 1984 allowing any income of BSEC full exemption for assessment
years 2017 – 2018 to 2021 – 2022.
1.36 Reduced rate of tax on Bangladesh Economic Zone Authority [SRO –

207 – AIN / IT / 2017]
Bangladesh Economic Zone Authority (BEZA) has been given the benefit of
reduced rate of tax at 25% for all income, except for capital gain.

2. Major changes in Value Added Tax (VAT)
2.1 Tariff for certain products and services
The tariff value for certain products and services has been fixed by
General Order No – 12 / VAT / 2017 dated 01 July 2017.
2.2 VDS on certain services

Service providers who are subject to VDS have been fixed by General
Order No – 13 / VAT / 2017 dated 01 July 2017.
VAT to be deducted on certain services, VDS rates, applicable conditions
and exemptions from VDS have been notified by General Order No - 14 /
VAT / 2017 dated 01 July 2017.
2.3 Exemption from VAT

Certain goods and services have been exempted from VAT by SRO - 224-
AIN / 2017 / 774 – VAT dated 01 July 2017.
Domestic production of refrigerator, freezer and air-conditioner as well as
import of inputs and spare parts used in such domestic production have
been exempted from VAT and supplementary duty (if any), subject to
certain conditions, as notified by SRO – 225 – AIN / 2017 / 775 - VAT and
SRO – 226 – AIN / 2017 / 776 - VAT dated 01 July 2017.
2.4 Exemption from VAT

Rate of excise duty has been fixed for certain services by SRO – 231 / AIN
/ 2017 / 318 – Excise. A summary of excise duty imposed through the SRO
is given below –
Service code Description Condition Rate of duty

of service
E032.00 Services Balance up to Tk. Nil
rendered 100,000
by bank or
Balance up to Tk. Tk. 150
financial
500,000
institute
Balance up to Tk. Tk. 500
1,000,000
Balance up to Tk. Tk. 2,500
10,000,000
Balance up to Tk. Tk. 12,000
50,000,000
Balance exceeding Tk. 25,000
Tk. 50,000,000

Service code Description Condition Rate of duty
of service
E033.00 Services Airline ticket per Tk. 500
rendered by seat for single
airline domestic journey
Airline ticket per For SAARC
seat for single countries: Tk. 500
international
For other
journey
countries in Asia:
Tk. 2,000
For Europe, USA,
and rest of the
world: Tk. 3,000
Foreign national Nil
of diplomatic class
The updated rates of VAT has been incorporated in Chapter 51 Scope of
VAT and specified rates.

SUMMARY OF
INCOME TAX


3. Important definitions
Person [Section - 2(46)]: Person includes an individual, a firm, an association of
persons, a Hindu undivided family, a trust, a fund, a local authority, a company,
an entity and every other artificial juridical person.
Assessee [Section - 2(7)]: Assessee means a person by whom any tax or other
sum of money is payable under ITO, 1984.
Income [Section - 2(34)]: Income means any income, receipts, profits or gains
derived from whatsoever source; any loss of such income, profits or gains; profits
or gains from insurance business; any amount which is subject to collection
or deduction of tax at source; deemed income; income accruing or arising or
received or deemed to accrue or arise or to be received in Bangladesh; any
amount which is treated as income or and any amount on which tax is imposed
under any provision of ITO, 1984.
Income Year [Section - 2(35)]: Income year means –
 For a newly set up business: From the date of setting up the business to
following 30 June
 For a new source of income: From the date of existence to following 30
June
 For a discontinued business, dissolved unincorporated body, liquidated
company: From 1 July to the date of such discontinuation or dissolution
or liquidation
 For an unincorporated body: From 1 July to the date of retirement or
death of a participant
 For an unincorporated body: From the date of retirement or death of a
participant to the date of retirement or death of another participant or
following 30 June
 Bank, insurance or financial institution: From 1 January to 31 December
 Other cases: From 1 July to 30 June
Assessment Year [Section - 2(9)]: Assessment year means the period of
twelve months commencing on the 1 July every year. This is the financial year
immediately following the income year.
The income year for all assessee (except for bank, insurance and financial
institutions) is 1 July to 30 June and the assessment year is following July –
June. The income year for all bank, insurance, financial institutions and their
subsidiaries is 1 January to 31 December and the assessment year is following
July – June.
Tax [Section - 2(62)]: Tax means the income tax payable under the ITO, 1984
and includes any additional tax, excess profit tax, penalty, interest, fee or other
charges leviable or payable under the Ordinance.

Tax Day [Section - 2(62A)]: Tax day means
 Assessees except for company: 30 November following the income year
 Company:
― 15th day of the 7th month following the income year
― If 15th day of the 7th month following the income year falls before
15th September of the assessment year, then 15th September of
the assessment year
 If the tax day of any assessee falls on a public holiday, the tax day will be
changed to the next working day.
Other important definitions have been included in the discussions of the relevant
sections.

INCOME
4. Residential status
[Section – 2(55)]
Individual – An individual will be a resident in any income year if he / she fulfills
any of the following two conditions -
 If he / she stays in Bangladesh for a period of / periods amounting in all to
182 days or more in the income year, or
 If he / she stays in Bangladesh for a period of / periods amounting in
all to 90 days or more in the income year as well as for a period of /
periods amounting in all to 365 days or more during four years preceding
the income year
Hindu Undivided Family, Firm, Other Association of Persons – Such persons will
be resident if their control and management of affairs is situated wholly or partly
in Bangladesh in the income year.
Company - A company will be resident if the management of its affairs is situated
wholly in Bangladesh in the income year.
5. Scope of total income

[Section – 17]
The calculation of total income of a person for an income year depends on the
residential status.
Resident assessee Non-resident assessee

Total income = Global income Total income = Bangladeshi income
(income received, accrued, arising (income received, accrued, arising
or deemed to be received, accrued, or deemed to be received, accrued,
arising in Bangladesh + income ac- arising in Bangladesh)
crued or arising outside Bangladesh)

6. Heads of income
[Section – 20]
For the purpose of computation of total income and charge of income tax, all
incomes will be classified and computed under the following heads of income –
 Salaries
 Interest on securities
 Income from house property
 Agricultural income
 Income from business or profession
 Capital gains
 Income from other sources
7. Income from salary

[Section – 2(45), 2(58), 21; Rule – 33A to 33J; Sixth Schedule – Part - A]
Definition of Salary [Section – 2(58)]: Salary includes any pay or wages, annuity,
pension, gratuity, fees, commissions, allowances, perquisites or profits in lieu of
or in addition to salary or wages, advance of salary, leave encashment.
The major components of salary comprises of the following items –
Basic salary Festival bonus Incentive bonus (up to 10% of

disclosed profit for the relevant
income year)
Arrear salary Advance salary Leave encashment
Leave fare assistance Overtime Compensation
Pension Gratuity Wages, project payments and
similar payments
Contributions by employer
Such as contribution to recognized provident fund, approved pension fund,
approved gratuity fund, approved superannuation fund, life insurance policy
Definition of Perquisite [Section – 2(45)]: Perquisite means any payment (in

cash or any other form) and any benefit (convertible into money or not) made to
an employee by an employer.
Perquisite includes dearness allowance, house rent allowance receivable in cash,
rent free accommodation, conveyance allowance receivable in cash, conveyance
provided for personal or private use, additional conveyance allowance, free

concessional passage for travel abroad or within Bangladesh, entertainment
allowance, medical allowance and other benefits. Perquisite does not include the
items treated as salary.
[While assessment of income from business or profession, the admissible limit
for deduction for expenditure of perquisite is Tk. 475,000 and Tk. 2,500,000 for
person with disability. Any perquisite paid to any employee in excess of such limit
is treated as income of such business or profession and taxed accordingly]
Based on various provisions of Income Tax Ordinance, 1984 and Rule – 33A to Rule
– 33J of Income Tax Rules, 1984 the following elements will be included while
computing income from salary –
 Basic salary
 Dearness allowance
 Overtime
 Bonus
 House rent allowance receivable in cash: amount in excess of 50% of basic
salary or Tk. 25,000 per month whichever is less [Rule – 33A]
 Rent free accommodation: rental value of accommodation or 25% of basic
salary, whichever is less [Rule – 33B]
 Accommodation at a concessional rate: lower of rental value of
accommodation or 25% of basic salary - rent actually paid [Rule – 33B]
 Conveyance allowance receivable in cash with no conveyance facility:
amount in excess of Tk. 30,000 [Rule – 33C]
 Conveyance provided for personal or private use: 5% of basic salary or Tk.
60,000, whichever is higher [Rule – 33D]
 Additional conveyance allowance along with conveyance facility: 5% of
basic salary or Tk. 60,000, whichever is higher + conveyance allowance
received [Rule – 33E]
 Free or concessional passage for travel abroad or within Bangladesh: [Rule
– 33G]
― If provided in accordance with terms of employment: amount in
excess of actual expenditure
― If not provided in accordance with terms of employment: entire amount
― If availed more than once in two years: the entire amount for the
additional passage
 Entertainment allowance: entire amount (nothing to be added for free
tea, coffee, beverages) [Rule – 33H]
 Medical allowance: [Rule – 33I]
― Amount in excess of 10% of basic salary or Tk. 120,000 annually,
whichever is less

― Amount in excess of Tk. 1,000,000 annually, in case of person with
disability
 Other benefits (such as support staff allowance, children education
allowance, utility bills): entire amount
 Fees and commission
 Honorarium or reward
 Accrued salary
 Advance salary
 Leave encashment
 Profit in lieu of salary
― Compensation for termination or modification of terms of employment
― Employer’s contribution to recognized provident fund
― Interest on recognized provident fund: amount in excess of 1/3 of
salary (basic salary + dearness allowance) or interest at 14.5% per
annum whichever is less (6th Schedule, Part – A, Para – 25)
― Unrecognized provident fund: accumulated employer’s contribution
+ interest (at the time of retirement)
― Employer’s contribution to recognized superannuation fund
― Employer’s contribution to recognized gratuity fund etc.
 Employer’s contribution to life insurance policy
 Gratuity: amount in excess of Tk. 2 crore 50 lakh [6th Schedule, Part – A,
Para – 20]
As per Sixth Schedule, Part - A of ITO, 1984 and Rule – 33I of Income Tax Rules,
1984, following incomes from salary will be exempted from tax –
 Any special allowance, benefits or perquisite specifically granted to meet
official expenses [Para – 5]
 Pension received [Para – 8]
 Gratuity received up to Tk. 2 crore 50 lakh [Para – 20]
 Any receipt from a provident fund (under Provident Fund Act, 1925),
recognized provident fund, superannuation fund or up to Tk. 50,000 from a
workers participation fund (under Bangladesh Labour Act, 2006) [Para – 21]
 Interest on recognized provident fund up to 1/3 of salary (basic salary + dearness
allowance) or interest at 14.5% per annum whichever is less [Para – 25]

 Medical expense reimbursed by the employer for the surgery relating to
heart, kidney, eye, liver and cancer, subject to certain condition [ Rule -33I]
8. Interest on securities
[Section – 22, 23]
The following income are classifiable under the head interest on securities –
 Interest receivable on any Government security or any Government
approved security
 Interest receivable on debenture or other securities of money issued by or
on behalf of a local authority or company
The following deductions are permissible in determination of income from

interest on securities –
 Commission or charges deducted from interest by a bank realizing the
interest on behalf of the assessee
 Interest payable on money borrowed for the purpose of investment in the
securities
However interest or commission in respect of or allocable to the tax-free
Government securities will not be allowed as deduction. Deduction will
also not be allowed in respect of interest payable outside Bangladesh on
which tax at source has not been paid or deducted
9. Income from house property

[Section – 2(3), 24, 25; Rule – 8A]
House property consists of building, appurtenant land, furniture, fixture, fittings
etc. Income from house property, whether used for commercial or residential
purposes, is taxable on the basis of its annual value.
Definition of Annual Value [Section – 2(3)]: Annual value refers to the higher of
(a) the sum reasonably expected from letting out any house property from year
to year or (b) any sum received as annual rent from such house property.
The following deductions are permissible in determination of income from house
property –
 Land development tax or rent payable to Government
 Insurance premium paid
 Interest payable on mortgage or capital charge
 Annual charge except capital charge
 Ground rent

 Interest payable to bank or financial institution on borrowed capital for
acquisition, construction, reconstruction, repair or renovation of the house
property
 Interest payable to bank or financial institution on borrowed capital for
construction of the house property, charged in 3 equal installments in the
first 3 years of earning income from such property
 Maintenance allowance
― House property used for residential purpose: 25% of annual value
― House property used for commercial purpose: 30% of annual value
― However any unspent portion of an amount of deduction allowed to
an assessee for repair and maintenance of house property will be
treated as deemed income [Section – 19(30)]
 Proportionate vacancy allowance
Any person receiving any sum or aggregate of sums exceeding Tk. 25,000 per
month as rent of any house property is required to maintain a bank account
in any scheduled bank for the purpose of depositing such rent or any advance
received or receivable from such house property. He / she will also maintain a
separate register and record regarding particulars of the tenant or tenants and
the sum or sums received.
10. Agricultural income

[Section – 2(1), 26, 27; Rule – 31, 32]
Definition of Agricultural Income [Section – 2(1)]: Agricultural income means –
 Any income derived from any land in Bangladesh and used for agricultural
purpose –
― By means of agriculture
― By performance of any process ordinarily employed by a cultivator
to render the produce of such land as marketable
― By sale of the produce of the land raised by the cultivator, in
respect of which no process (other than the processes to render
the produce of such land as marketable) has been performed
― By granting a right to any person to use the land for any period
 Any income derived from any building which
― Is occupied by the cultivator of any such land as referred above, in which
any process to render any such produce as marketable is carried on
― Is on or in the immediate vicinity of such land
― Is required by the cultivator as the dwelling house or store-house
or other out-house by reason of his / her connection with such land

The following incomes of an assessee is assessable under the head agricultural
income –
 Agricultural income as defined in Section – 2(1)
 Income from sale of machinery or plant used for agricultural purpose as
referred to in Section - 19(17) [(Sale proceed - Written down value) – (Sale
proceed – Original Cost)], when sales proceed exceeds original cost
 Receipt of insurance, salvage or compensation money for machinery or plant
used for agricultural purpose as referred to in Section - 19(19) [Insurance /
salvage / compensation received – (Written down value – Scrap value)]
 60% of income derived from sale of tea grown and manufactured in
Bangladesh [Rule – 31]
 60% of income derived from sale of rubber grown and manufactured in
 Income from sale of tobacco, sugar or any other produce grown and
manufactured in Bangladesh, computed in prescribed manner
However, agricultural income up to Tk. 200,000 of an assessee (having agriculture
as only source of income) is exempted from tax.
The following deductions are permissible in determination of agricultural income –
 Land development tax or rent paid
 Tax, local rate or cess paid on agricultural land (not levied on income from
agricultural operation)
 Expenditure incurred as cost of production in prescribed manner
― If books of accounts are maintained, actual expenditure
― If books of accounts are not maintained, 60% of the market value
of the produce
― For Adhi, barga, bhag, no deduction is allowed
 Insurance premium paid
 Repair and maintenance cost of capital assets
 Depreciation allowance on capital assets as per Third Schedule
 Interest paid on mortgage and capital charge
 Interest on borrowed capital
 Amount written off in books of accounts in respect of discarded, demolished
or destroyed machinery or plant, subject to certain conditions
 Amount written off in books of accounts in respect of sale or transfer of
machinery or plant, subject to certain conditions
 Any other expenditure except for capital or personal expenditure, incurred
wholly and exclusively for agricultural purpose

11. Income from business or profession
[Section – 28, 29, 30; Rule – 30A, 31, 32, 65, 65A, 65C; Third Schedule]
The following incomes of an assessee is assessable under the head income from
business or profession –
 Profits and gains of any business or profession
 Income from any trade or professional association or similar association
 Value of any benefit or perquisite arising from business or profession
 Receipt of any loss, bad debt, expenditure or trading liability as referred
to in Section - 19(15)
 Income from sale of building, machinery or plant used for business or profession
as referred to in Section - 19(16) [(Sale proceed - Written down value) – (Sale
proceed – Original Cost)], when sale proceed exceeds original cost
 Receipt of insurance, salvage or compensation money for building,
machinery or plant used for business or profession as referred to in Section
- 19(18) [Insurance / salvage / compensation received – (Written down
value – Scrap value)]
 Income from sale of capital asset for scientific research as referred to
in Section - 19(20) (Sale value – Expenditure allowed as deduction under
Section – 29(1)(xx))
 3% of export value of garments exportable against export quota transferred
as referred to in Section - 19(23) [Rule – 30A]
 40% of income derived from sale of tea grown and manufactured in
 40% of income derived from sale of rubber grown and manufactured in
11.1 Admissible deductions

The following deductions are permissible as per Section – 29 and Section – 30
in determination of income from business or profession –
 Rent for the premises of business or profession [Section – 29(1)(i)]
 Repair expense for hired premises of business or profession
[Section – 29(1)(ii)]
 Interest paid or profit shared with a bank run on Islamic principles
in respect of capital borrowed [Section – 29(1)(iii)]
 Distribution of profit received from a bank run on Islamic principles
[Section – 29(1)(iv)]
 Up to 5% of the total income carried to Special Reserve by financial
institutions as approved by the Government, provided that such
reserve does not exceed paid up capital [Section – 29(1)(v)]

 Repair expense for buildings, machinery, plants or furniture
[Section – 29(1)(vi)]
 Insurance premium [Section – 29(1)(vii)]
 Depreciation of building, machinery, plant, furniture, bridge,
road and flyover as per Third Schedule [Section – 29(1)(viii)]
 Amortization of license fee as per Third Schedule [Section – 29(1)
(viiia)]
 Investment allowance of 20% of original cost for the first year, for
passenger vessel or fishing trawler entitled to special depreciation
allowance [Section – 29(1)(ix); Third Schedule, Para - 8]
 Obsolescence allowance for building, machinery, plant or any
other fixed asset except imported software [Section – 29(1)(xi);
Third Schedule, Para – 10]
 Difference between sale / disposition value of carcass of dead
or useless animal and original cost of the animal which is used in
business or profession [Section – 29(1)(xii)]
 Land development tax or rent, local rates or municipal taxes for
premises [Section – 29(1)(xiii)]
 Employee bonus or commission, subject to certain conditions
[Section – 29(1)(xiv)]
 A written off irrecoverable debt, subject to certain conditions
[Section – 29(1)(xv)]
 A prior written off irrecoverable debt previously not allowed as
deduction, if established to have become irrecoverable [Section
– 29(1)(xvi)]
 A written off irrecoverable debt in the assessable income year
which is established by the DCT to have become irrecoverable in
a prior year, allowed as deduction for the relevant prior year by
the DCT [Section – 29(1)(xvii)]
 Expenditure for scientific research except for capital expenditure
[Section – 29(1)(xix)]
 Capital expenditure for scientific research, subject to certain
condition [Section – 29(1)(xx)]
 Any sum paid to a scientific research institute, association or other
body; university, college, technical school or other institution,
subject to certain condition [Section – 29(1)(xxi)]
 Expenditure for educational institution or hospital established
for the benefit of the employees, except for capital expenditure,
subject to certain conditions [Section – 29(1)(xxii)]

 Capital expenditure for construction and maintenance of
educational institution or hospital established for the benefit of
the employees, subject to certain conditions [Section – 29(1)
(xxiii)]
 Training expenditure on Bangladeshi Citizens for Board approved
schemes [Section – 29(1)(xxiv)]
 Expenditure except for capital or personal expenditure, incurred
as a member of Government sponsored trade delegation for visits
abroad [Section – 29(1)(xxv)]
 Annual membership subscription fee paid to a registered trade
organization or professional institution [Section – 29(1)(xxvi)]
 Expenditure except for capital or personal expenditure, incurred
wholly and exclusively for the purpose of business or profession
[Section – 29(1)(xxvii)]
 Expenditure of up to Tk. 475,000 or Tk. 2,500,000 on the provision
of perquisites for any employee or an employee with disability
respectively, subject to certain condition [Section – 30(e)]
 Entertainment expense allowance [Rule - 65]
Income, profits and gains Rate for allowance

On the first Tk. 1,000,000 4%
On the balance 2%
 Foreign travel expenditure of employees and their dependents for
holidaying and recreation equivalent to lower of 3 months’ basic
salary or ¾ of actual expenditure, subject to certain conditions
[Rule – 65A]
 Publicity and advertisement expenditure
 Allowance for expenditure on distribution of free samples [Rule – 65C]
Industry Turnover Rate for

allowance
Pharmaceuticals Up to Tk. 5 crore 2%
industry
In excess of Tk. 5 crore 1%
up to Tk. 10 crore
In excess of Tk. 10 crore 0.5%
Food, cosmetics and Up to Tk. 5 crore 1%
toiletries industry
up to Tk. 10 crore

Industry Turnover Rate for
allowance
Other industries Up to Tk. 5 crore 0.5%

up to Tk. 10 crore
 Head office expense of a company not incorporated in Bangladesh

under Companies Act, 1994 up to 10% of net profit disclosed in the
statements of accounts [Section - 30(g)]
 Royalty, technical services fee, technical know-how fee, technical
assistance fee up to 8% of net profit disclosed in the statements of
accounts [Section - 30(h)]
 Incentive bonus up to 10% of net profit disclosed in the statements
of accounts [Section - 30(j)]
 Overseas travelling expenditure up to 1.25% of disclosed turnover,
subject to certain condition [Section - 30(k)]
11.2 Deductions not admissible in certain circumstances

The following expenditures are not admissible as per Section – 30 as
deductions in the determination of income from business or profession –
 Payment of salaries without deduction of tax at source in
accordance with Section - 50 [Para - 30(a)]
 Payment without deduction and deposit of tax at source [Para -
30(aa)]
 Payment of salary to an employee who is required to but has not
obtained 12-digit TIN [Para - 30(aaa)]
 Payment of salary to an employee who is required to but has not
filed return of income or has not obtained time extension either,
after his / her tax day [Para - 30(aaaa)]
 Payment of interest, salary, commission or remuneration by a firm
or an association of persons to any partner or member [Para - 30(b)]
 Brokerage or commission paid to a non-resident without deduction
of tax at source in accordance with Section – 56 [Para - 30(c)]
 Payment to a provident or other fund without effective
arrangement of deduction of tax at source from any payment
from such fund [Para - 30(d)]
 Perquisite for any employee exceeding Tk. 475,000 and Tk.

2,500,000 for any employee who is a person with disability, sub-
ject to certain condition [Para - 30(e)]
 Expenditure in excess of allowable limit (stated in the Chapter
11.1 Admissible deductions above) in respect of the following -
[Para - 30(f)]
―― Entertainment
―― Foreign travels of employees and their dependents for
holidaying and recreation
―― Publicity and advertisement
―― Distribution of free samples
 Head office expense of a company not incorporated in Bangladesh
under Companies Act, 1994 in excess of 10% of net profit disclosed
in the statements of accounts [Para - 30(g)]
 Royalty, technical services fee, technical know-how fee, tech-
nical assistance fee in excess of 8% of net profit disclosed in the
statements of accounts [Para - 30(h)]
 Payment of salary or remuneration equivqlent to Tk. 15,000 or more
otherwise than by crossed cheque or bank transfer [Para - 30(i)]
 Incentive bonus exceeding 10% of net profit disclosed in the state-
ments of accounts [Para - 30(j)]
 Overseas travelling expenditure exceeding 1.25% of disclosed
turnover, subject to certain condition [Para - 30(k)]
 Payment of commission or discount to shareholder director [Para
- 30(l)]
 Payment exceeding Tk. 50,000 otherwise than by crossed cheque
or bank transfer, subject to certain conditions [Para - 30(m)]
 Payment of rent otherwise than by crossed cheque or bank trans-
fer [Para - 30(n)]
 Payment to following persons who are required to but have not
obtained 12-digit TIN [Para - 30(o)]
―― Agent or distributor of any company
―― Person receiving commission, fee or other sum for mon-
ey transfer through mobile banking or other electronic
means and recharge of mobile phone account
―― Resident person providing advisory or consultancy ser-
vice, catering service, event management service, man-
power supply service or security service to a company

11.3 Normal depreciation allowance
[Third Schedule, Para - 3]
In computing profit or gains from business or profession, an allowance for
depreciation will be made in respect of any building, machinery, plant,
furniture, bridge, road or flyover used for the purpose of such business or
profession. The normal depreciation allowance will be calculated at the
rates stated below on the written down value of the assets-
Sl. Class of asset Rate applicable

1. Buildings (General) 10%
2. Factory buildings 20%
3. Furniture & fittings 10%
4. Office equipment 10%
5. Machinery & plant (General) 20%
6. Ocean going ships (New) 12%
7. Ocean going ships (Second hand), age less 12%
than 10 years at the time of purchase
(Calculated on original cost)
8. Ocean going ships (Second hand), age 10 24%
years or more at the time of purchase
(Calculated on original cost)
9. Inland ships including steamers, motor 24%
vessels, iron or steel flats for cargo, wooden
cargo boats, motor launches and speed boats
10. Batteries, X-Ray and electronic therapeutic 20%
apparatus and accessories thereto
11. Machinery used in the production and 20%
exhibition of cinematographic films
12. Motor vehicles, not plying for hire 20%
13. Motor vehicles, plying for hire 24%
14. Computer & computer equipment 30%
15. Bangladeshi made computer software 50%
16. Imported computer software 10%
17. Professional & reference books 30%
18. Aircraft, aero-engine and aerial photographic 30%
apparatus
19. Moulds used in the manufacture of glass or 30%
plastic goods or concrete pipe

Sl. Class of asset Rate applicable
20. Mineral oil concerns, below ground 100%
installation
21. Mineral oil concerns, above ground 30%
installations (portable boilers, drilling tools,
well-head tanks and rigs)
22. Bridge 2%
23. Road 2%
24. Fly over 2%
25. Pavement runway, taxiway 2.5%
26. Apron, tarmac 2.5%
27. Boarding bridge 10%
28. Communication, navigation aid and other 5%
equipment
11.4 Initial depreciation allowance

[Third Schedule, Para – 5A]
Applicable for Year of application Rate applicable

Building Later of 10% of cost
constructed in
Bangladesh after ― Year of construction
30 June, 2002
― First year of use
― Year of commencement of
commercial production
Machinery or Later of 25% of cost
plant installed in
Bangladesh after ― Year of installation
30 June, 2002
― First year of use
― Year of commencement of

11.5 Accelerated depreciation allowance
[Third Schedule, Para – 7, 7B]
Applicable for Year of Rate

application
― Machinery or plant used in industrial First year of 50% of
undertaking set up in Bangladesh commercial actual
between 1 July, 1977 and 30 June, 2012 production cost
― Not previously used in Bangladesh Second year 30% of
of commercial actual
― Not applicable for office appliances and production cost
road transport vehicle Third year of 20% of
― Subject to certain conditions commercial actual
production cost
― Machinery or plant used in industrial First year of 50% of
undertaking referred to in Section – 46B commercial actual
and set up in Bangladesh between 1 production cost
July, 2014 and 30 June, 2019
Second year 30% of
― Not previously used in Bangladesh of commercial actual
production cost
― Not applicable for office appliances and Third year of 20% of
road transport vehicle commercial actual
― Subject to certain conditions production cost
11.6 Amortization of license fees

[Third Schedule, Para – 10A]
Applicable for Period Rate

allowed
― Resident cellular mobile phone For the Proportionate
operator company paying Spectrum period of amount in
Assignment fees, GSM license fees, permission each year of
license acquisition fees or license permission
renewal fees as license fees
― Any company engaged in providing
specialized services paying license
fee which is integral of its operation
― Paid such license fees before or after
1 July, 2012
― For obtaining permission from
authority for 2 or more years

12. Capital gains
[Section – 2(15), 31, 32; Second Schedule]
Definition of Capital Asset [Section – 2(15)]: Capital asset of an assessee means
any kind of property held by him / her excluding –
 Stock-in-trade (except for stocks and shares), consumable stores or raw
materials held for business or profession
 Movable personal effects including wearing apparel, jewellery, furniture,
fixture, equipment and vehicles that are used for personal use only
Any profits or gains arising from transfer of a capital asset (both movable and
immovable) as defined in Section - 2(15) of the ITO, 1984 is chargeable to income
tax in accordance with the Second Schedule, Para – 2.
Income from capital gain is taxable on the basis of the full value of consideration
received or accrued from the transfer or fair market value, whichever is higher.
The following deductions are permissible in determination of income from
capital gain –
 Any expenditure incurred solely in connection with the transfer
 Cost of acquisition, subject to certain condition
 Any capital expenditure incurred for improvement of the capital asset,
subject to certain condition
Capital gains or portion thereof arising out of transfer of certain capital assets are
exempted from the income tax under certain circumstances and upon fulfillment
of certain conditions as discussed below –
Source of capital Condition Exemption Reference

gain
Transfer of Acquisition of a ― If capital gain Section –
capital asset new capital asset exceeds the cost 32(5)
used for business within a year of acquisition of
or profession before or after the new asset,
immediately before the transfer date exemption up
the transfer to the amount
of cost of
acquisition
― If capital gain is
equal to or less
than the cost of
acquisition of
the new asset,
full amount of
capital gain is
exempted

Source of capital Condition Exemption Reference
gain
Transfer of None Full Section –
Government 32(7)
securities
Transfer of building Entire capital Full Section –
or lands to a new gain is invested in 32(10)
company registered the equity of the
under Companies new company
Act, 1913 / 1994 set
up for an industry
Transfer of capital Entire capital Full Section –
asset of a firm to gain is invested in 32(11)
a new company the equity of the
registered under new company
Companies Act,
1913 / 1994
13. Income from other sources

[Section – 33, 34]
The following incomes of an assessee is assessable under the head income from
other sources –
 Dividend
 Interest
 Royalties
 Fees for technical services
 Income from letting of machinery, plant or furniture and inseparable building
 Deemed Income [Section 19 (1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13, 21, 21A,
21B, 24, 26, 27, 28, 29 & 31)]
 Income of any kind or from any source which is not classifiable under any
other heads specified in Section – 20
The following deductions are permissible in determination of income from other
sources –
 Interest paid on money borrowed for acquisition of shares
 Expenditure incurred for earning relevant income, except for capital ex-
penditure and personal expenditure
 Expenditure for repair, insurance premium, depreciation and obsolescence
allowance according to Third Schedule in respect of letting of machinery,
plant or furniture and inseparable building

14. Deemed income
[Section – 19]
Certain incidents such as unexplained investment, cash credits, possession of
assets, non-payment of liabilities are treated as deemed income of an assessee
which are assessable under specific heads of income. A summarized list of such
incomes are specified below –
Sl. Deemed income Head of income Reference

1. Unexplained cash credit in the Income from Other Section -
books of accounts Sources 19(1)
2. Under recorded value of investment Income from Other Section -
in / possession of bullion, jewelry Sources 19(2)
and other valuable article
3. Unexplained expenditure Income from Other Section -
Sources 19(3)
4. Unrecorded investment Income from Other Section -
Sources 19(4)
5. Unrecorded money, bullion, Income from Other Section -
jewelry and other valuable article Sources 19(5)
6. Income from discontinued Income from Section -
business, Business or 19(6)
Profession
7. Dividend received Income from Other Section -
Sources 19(7)
8. Fair market value – Purchase price Income from Other Section -
of asset Sources 19(8)
(except stock-in-trade, stock, shares)
9. Salami or Premia Income from Other Section -
Sources 19(9)
10. Goodwill money, compensation Income from Other Section -
or damages for cancellation or Sources 19(10)
termination of contracts and licenses
11. Monetary value of benefit for Income from Other Section -
cancellation of indebtedness Sources 19(11)
Margin loan or interest on margin
loan for investment in shares,
debentures, mutual funds or other
securities of an individual assessee
waived in excess of Tk. 1,000,000
by a TREC holder

12. Managing agency commission Income from Other Section -
Sources 19(12)
13. Winnings from lotteries, crossword Income from Other Section -
puzzles, card games and other games Sources 19(13)
14. Profits and gains from insurance Income from Section -
Business Business or 19(14)
Profession
15. Amount received in respect of any Income from Section -
loss, bad debt, expenditure or Business or 19(15)
trading liability previously allowed Profession
as deduction
16. [(Sale proceed - Written down Income from Section -
value) – (Sale proceed – Original Business or 19(16)
Cost)] of building, machinery, plant Profession
used for business or profession
17. [(Sale proceed - Written down Agricultural income Section -
value) – (Sale proceed – Original 19(17)
Cost)] of machinery and plant used
for agriculture
18. [Insurance / salvage / Income from Section -
compensation received – (Written Business or 19(18)
down value – Scrap value)] of Profession
building, machinery, plant used for
business or profession
19. [Insurance / salvage / Agricultural income Section -
compensation received – (Written 19(19)
down value – Scrap value)] of
machinery and plant used for
agriculture
20. [Sale proceed – allowed capital Income from Section -
expenditure] of asset used for Business or 19(20)
scientific research Profession
21. Unpaid loan of maximum Tk. Income from Other Section -
500,000 not paid within 3 years, Sources 19(21)
subject to certain conditions
22. Loan or gift received which is Income from Other Section -
transfer of initial capital of a Sources 19(21A)
business or profession, subject to
certain conditions
23. Initial capital transferred partly or Income from Other Section -
fully from business or profession, Sources 19(21B)

24. Amount received from tenant Income from House Section -
which is not adjustable with rent, Property 19(22)
25. 3% of export value of garments Income from Section -
exportable against export quota Business or 19(23)
transferred Profession
26. Paid-up capital received by a non- Income from Other Section -
listed company otherwise than by Sources 19(24)
crossed cheque or bank transfer
27. Loan received by a company Income from Other Section -
otherwise than by crossed cheque Sources 19(26)
or bank transfer
28. 50% of [Value of motor car / jeep Income from Other Section -
purchased or hired – 10% of (paid- Sources 19(27)
up capital + reserve + accumulated
profit)] of a company
29. Loan exceeding Tk. 500,000 Income from Other Section -
received by an individual otherwise Sources 19(28)
than by crossed cheque or bank
transfer
Not applicable for loan or gift from
spouse or parents through banking
or formal channel
30. Unpaid liability for 2 years in Income from Other Section -
respect of credit purchase of Sources2 19(29)
building construction material,
subject to certain condition
31. Unspent amount of deduction Income from House Section -
allowed for repair and Property 19(30)
maintenance of house property
32. [Income subject to tax exemption or Income from Other Section -
reduced tax rate shown in revised / Sources 19(31)
amended return – income subject to
tax exemption or reduced tax rate
shown in original return]

TAX RATE
STRUCTURE
15. Personal tax rate structure

[Finance Act, 2017]
Every individual assessee (including non-resident Bangladeshi), Hindu undivided
family, partnership firm, association of persons, artificial juridical person and
other assessees (except for companies) will have to pay income tax on their total
income according to the 6 tier income slabs and tax rates for the Income Year
2016 - 2017 and Assessment Year 2017 – 2018 as stated below –
Assessment Year: 2017 – 2018

(Income Year: 2016 - 2017)
Income Rate of tax
On the first Tk. 250,000 of total income of male assesse Nil
On the first Tk. 300,000 of total income of female assesse Nil
On the first Tk. 300,000 of total income of persons aged 65 years Nil
& above
On the first Tk. 400,000 of total income of person with disability Nil
On the first Tk. 425,000 of total income for gazetted war Nil
wounded freedom fighters
On the next Tk. 400,000 of total income 10%
On the next Tk. 3,000,000 of total income 25%
On the balance of total income 30%
Non-resident individual foreigner assessee 30%
The exemption limit for parents of any person with disability is Tk. 275,000
for father and Tk. 325,000 for mother. However only one parent can enjoy the
benefit of the increased exemption limit.

15.1 Tax on capital gain
[Second Schedule; SRO – 196 – AIN / IT / 2015]
Capital gain Applicable tax

Capital gain arising as result of a Tax at rate applicable on
disposal of a capital asset within 5 total income including
years from the date of acquisition capital gain
Capital gain arising as result of a Lower of
disposal of a capital asset after 5 years
from the date of acquisition ― Tax at rate applicable
on total income
including capital gain
― 15% tax the capital gain
For a firm, capital gain arising from 10%
transaction of securities listed in
any SEC approved Stock Exchange
(excluding Government Securities)
For individual assessee, Hindu undivided Nil
family, association of persons, trust,
fund, local authority, entity and artificial
juridical person, capital gain arising from
transaction of securities listed in any
SEC approved Stock Exchange (excluding
Government Securities)
15.2 Other tax rates

[Finance Act, 2017]
Applicable for Rate of tax

Manufacturer of cigarette, biri, jorda, gul and other 45%
tobacco related products (except for company)
Co-operative societies, registered under Co-operative 15%
Societies Act, 2001
15.3 Surcharge on individual assessee

[Finance Act, 2017]
Surcharge will be applicable at the following rates on net tax payable by
individual assesses having net wealth according to the following slabs –

Value of net wealth Rate of surcharge
Up to Tk. 2.25 crore Nil
More than Tk. 2.25 crore up to Tk. 5 crore 10%
More than Tk. 5 crore up to Tk. 10 crore 15%
More than Tk. 20 crore 30%
However minimum surcharge has been fixed at Tk. 3,000, if the value of
net wealth of an individual assessee exceeds Tk. 2.25 crore.
In addition to the above surcharge based on net wealth, individual assessees

engaged in the business of manufacturing biri, jorda, gul or other tobacco
products has to pay surcharge at 2.5% on income from such business.
15.4 Tax on non-resident assessee

[Section – 17; Second Schedule; Finance Act, 2017]
A person who is a non-resident is liable to pay tax on the incomes received,
accrued, arising or deemed to have been received, accrued or arising to
him / her in Bangladesh during an income year.
A non-resident Bangladeshi (NRB) is subject to pay tax according to the
6 tier income slab and tax rate structure as applicable for a resident
assessee. A non-resident Bangladeshi is also entitled to tax reliefs and tax
rebates that are admissible to a resident assesse.
A non-resident foreigner assessee is liable to pay tax on his / her total
income at 30%. The maximum income limit exempted from tax (that are
applicable to resident assessees and non-resident Bangladeshi assesses) is
not applicable for such an assessee.
A non-resident foreigner assessee is not entitled to any sort of tax
relief and tax rebate that are admissible to a resident or non-resident
Bangladeshi assesse.
16. Corporate tax rate structure

[Finance Act, 2017; Second Schedule; SRO – 196 – AIN / IT / 2015]
The tax rates applicable for companies are stated below –

Sl. Applicable for Rate
of tax
1. Publicly traded company (listed in stock exchange) 25%
If a non-publicly traded company transfers at least 20% share through
IPO, it will enjoy 10% rebate on tax in the respective year
2. Non-publicly traded company 35%
3. Publicly traded bank, insurance company and financial 40%
institution
4. Non-publicly traded bank, insurance company and financial 42.5%
institution
5. Bank, insurance company and financial institution obtaining 40%
approval from the Government in 2013
6. Merchant bank 37.5%
7. Cigarette manufacturing company 45%
8. Biri, jorda, gul and other tobacco related products 45%
manufacturing company
9. Mobile phone operator company 45%
10. Mobile phone operator company converted into public limited 40%
company by transferring minimum 10% of shares through stock
exchange, of which maximum 5% is issued through Pre-IPO
If such company transfers at least 20% share through IPO, it will
enjoy 10% rebate on tax in the respective year
11. Income from dividend 20%
12. Capital gain arising from transaction of securities listed in 10%
any SEC approved Stock Exchange (excluding Government
Securities)
13. Capital gain arising from transfer of capital assets other than 15%
stocks and shares of any company registered under Companies
Act, 1994
16.1 Additional tax

[Section – 16B]
Applicable for Condition Rate of tax

Company Employs or allows to work any in- Higher of
dividual who is not a Bangladeshi ― 50% of income
citizen (expatriate) without prior tax payable
approval of BOI or any competent
authority of the Government ― Tk. 5 lakh

17. Minimum tax
[Section – 82C; Finance Act, 2017]
Minimum tax is determined from the following 2 perspectives –
 Based on class of assessee
 Based on source of income
The ultimate minimum tax for an assessee will be the higher of (a) minimum
tax calculated based the class of assessee and (b) minimum tax calculated if
the person has income from sources on which minimum tax is applicable. [Sec-
tion – 82C (5)]
An assessee will not get refund of any minimum tax paid or will not be able to ad-
just minimum tax payable against refund due from any source in the assessment
year or refund due for earlier year / years. [Section – 82C (6)]
17.1 Based on class of assessee
17.1.1. Individual, HUF, Firm, AOP, AJP

[Finance Act, 2017]
Minimum tax on individual assessee (including non-resident
Bangladeshi), Hindu undivided family (HUF), partnership firm
(having gross receipt less than Tk. 5,000,000), association
of persons (AOP) and other artificial juridical person (AJP)
is charged on the basis of location. An assessee with taxable
income exceeding exemption limit (male: Tk. 250,000; fe-
male, persons aged 65 years & above: Tk. 300,000; person
with disability: Tk. 400,000; gazetted war wounded freedom
fighters: Tk. 425,000; parents of person with disability: Tk.
275,000 (father) / Tk. 325,000 (mother)) will pay minimum
tax based on their location as stated below –
Location of assessee Minimum

tax
Assessees residing in Dhaka North City Tk. 5,000
Corporation, Dhaka South City Corporation
and Chittagong City Corporation area
Assessees residing in other city corporation Tk. 4,000
area
Assessees residing in other than city Tk. 3,000
corporation area

17.1.2. Company and Firm
[Section – 82C (4)]
Every firm having gross receipt exceeding Tk. 5,000,000 and
every company will pay minimum tax as stated below –
Applicable for Condition Rate of tax

Manufacturer of Irrespective of 1% of gross
cigarette, bidi, profit or loss in the receipts
chewing tobacco, assessment year
smokeless tobacco
or any other
tobacco products
Mobile phone Irrespective of 0.75%
operator profit or loss in the of gross
assessment year receipts
Any other cases Irrespective of 0.60%
profit or loss in the of gross
assessment year receipts
Industrial Irrespective of 0.10%
undertaking profit or loss in the of gross
engaged in assessment year receipts
manufacturing of
goods
For the first 3
income years since
commencement of
Gross receipt for minimum tax purpose will constitute the

following -
 All receipt derived from sale of goods
 All fees, charges, commissions, discounts received for
rendering services or giving benefits
 All receipts derived from any head of income
17.2 Based on source of income

[Section – 82C (2)]
Minimum tax from the following sources will be the amount of tax
deducted or collected from such sources –

Source of income TDS reference
Execution of contract Section - 52
Supply of goods Section - 52
Manufacturing, processing, conversion Section - 52
Printing, packaging, binding Section - 52
Royalty and others Section – 52A
Clearing and forwarding service Section – 52AAA
Manufacture of cigarettes Section – 52B
Compensation against acquisition of property by Section – 52C
Government
Interest on savings instruments Section – 52D
Travel agency Section – 52JJ
Rental power Section – 52N
Salaries of foreign technician serving in diamond Section – 52O
cutting industry
International phone call Section – 52R
Import Section - 53
Shipping business of a resident Section – 53AA
Export of manpower Section – 53B
Export of knit wear, woven garments, terry towel, Section – 53BB
carton and accessories of garments industry, jute
goods, frozen food, vegetables, leather goods,
packed food
Transaction of shares, debentures, mutual funds or Section – 53BBB
securities by a member of stock exchange
Export of any goods except for certain items Section – 53BBBB
specified in Section – 53BB
Sale of goods or property in public auction Section – 53C
Courier business of a non-resident Section – 53CCC
Export cash subsidy Section – 53DDD
Commission, discount, fees, incentive or Section – 53E
performance bonus, benefits for distribution,
marketing, promotion activities
Commission or remuneration of an agent of any Section – 53EE
foreign buyer
Interest on saving deposits and fixed deposits Section – 53F
Real estate or land development business Section – 53FF

Source of income TDS reference
Insurance commission Section – 53G
Remuneration or fees of surveyors of general Section – 53GG
insurance company
Transfer of property Section – 53H
Transfer of securities or mutual fund units by Section – 53M
sponsor shareholders of a company
Transfer of share of shareholder of stock exchanges Section – 53N
Winnings from lotteries, crossword puzzles, card Section - 55

games and others
Deduction or collection of tax from the following sources has been scoped
out from minimum tax –
 Contractor / subcontractor of an oil company
 Oil marketing company, dealer or agent of such company
(excluding petrol pump station)
 Company engaged in oil refinery
 Company engaged in gas transmission or gas distribution
 Import of raw material by an industrial undertaking for its own
consumption
 Interest or share of profit on savings deposit or fixed deposit where
the recipient is not a public university; an educational institution
whose teachers are enlisted for Monthly Pay Order; professional
institute run by ICAB, ICMAB or ICSB; any fund
17.3 Determination of income, tax liability and minimum tax

The total income, regular tax liability and minimum tax liability for
income from different sources will be determined as mentioned below.
The ultimate tax liability on any source of income will be the higher of
(a) minimum tax liability and (b) regular tax liability applicable for that
specific source.

Source of income
Determination
Determination
Determination
of regular tax
of minimum
tax liability
Ultimate tax
of income
Reference
liability
liability
Regular source Regular At Gross Higher Section
manner regular receipt of (a) – 82C
rate from such minimum (3)(a);
sources tax 82C (4)
x Rate of liability (b)(i)
minimum and (b)
tax regular
based on tax
class of liability
assessee
Income under Regular At ap- Amount Higher Section
Section - 52, manner plicable of tax of (a) – 82C
52A, 52AAA, rate deducted minimum (2)(a);
52B, 52JJ, 52N, or tax 82C
52O, 52R, 53, collected liability (2)(b);
53AA, 53B, 53BB, at source and (b) 82C
53BBB, 53BBBB, regular (2)(d);
53C, 53CCC, 53E, tax 82C (2)
53EE, 53F(1)(a), liability (e)
53F(1)(b), 53FF,
53G, 53GG, 53M,
53N, 55
Income /
loss from
such
sources
cannot
be set off
against
loss /
income
(respec-
tively)
from
regular
sources

Source of income
Determination
Determination
Determination
of regular tax
of minimum
tax liability
Ultimate tax
of income
Reference
liability
liability
― Compensa- Amount Amount Not appli- Amount Section
tion against on of tax cable of tax – 82C
acquisition which deduct- deducted (2)(d);
of property tax is ed or or col- 82C (2)
by Govern- deduct- collect- lected at (e)
ment [Sec- ed or ed at (Amount source is
tion – 52C] collect- source of tax the ulti-
ed at deducted mate tax
― Interest source or col- liability
on savings lected at
instruments source is
[Section – the final
52D] discharge Income /
of tax loss from
― Export cash liability) such
subsidy sources
[Section – cannot
53DDD] be set off
against
― Interest loss /
on savings income
deposit or (respec-
fixed deposit tively)
received by from
certain enti- regular
ties [Section sources
– 53F(1)(c),
53F(2)]
― Transfer of
property
[Section –
53H]

Source of income
Determination
Determination
Determination
of regular tax
of minimum
tax liability
Ultimate tax
of income
Reference
liability
liability
Sources subject Regular As per Gross Higher of Section
to exemption of manner exemp- receipt (a) mini- – 82C
tax or reduced tion from such mum tax (4)(b)
rate of tax provi- sources liability (ii)
sion / x Rate of and (b)
at ap- mini- regular
plicable mum tax tax liabil-
reduced based on ity
tax rate class of
assessee
x [(1 - Ex-
emption
rate)] or
[ Reduced
tax rate
/ Regular
tax rate]
The total tax liability of an assessee from all the sources of income will be
the aggregate amount of the ultimate tax liabilities on all of such sources.
[Section – 82C (3)(b)].
18. Tax deducted at source

[Section – 49 – 56]
Tax on certain income will be deducted or collected at source as advance pay-
ment in accordance with Chapter – VII of ITO, 1984. The incomes subject to such
deduction and respective deduction rates are summarized in the following table.
Some abbreviations are used in the following table such as RZ (Respective zone),
Dhk (Dhaka Zone), Ctg (Chittagong Zone) and LTU (Large Tax-payer Unit).
Sl Applicable for Rate of deduction / Applicable Reference

collection of tax zone
1. Salaries including salaries of Average rate RZ Sec - 50

Government employee applicable to
assessee based on
personal tax rate
structure

2. Discount on real value of Higher of LTU Sec – 50A

Bangladesh Bank bills maximum rate or
applicable rate
3. Remuneration to Member of Average rate RZ Sec – 50B
Parliament applicable to
assessee based on
personal tax rate
structure
4. Interest or profit on securities 5% LTU Sec – 51
Subject to certain conditions
5. Payment for execution of As specified in Dhk – 2 Sec – 52;
contracts, supply of goods, Rule - 16
manufacturing, processing, Ctg – 2 Rule - 16
conversion, printing,
packaging, binding Other -
RZ
6. Payment for royalties, Base amount up Dhk – 8 Sec – 52A
franchise, fee for using to Tk. 25 lakh:
license, brand name, 10% of base Ctg – 2
patent, invention, formula, amount
process, method, design, Other -
pattern, know-how, RZ
copyright, trademark, trade
name, literary / musical / Base amount
artistic composition, survey, exceeding Tk. 25
study, forecast, estimate, lakh: 12% of base
customer list or any other amount
intangibles
Subject to certain condition
Payment to a resident for Base Base Dhk – 8 Sec -
the following services (Point amount amount 52AA
7 – 8) up to exceed- Ctg – 2
Tk. 25 ing Tk.
lakh 25 lakh Other -
RZ
7. Advisory or consultancy 10% 12%

service
8. Professional service, 10% 12%
technical services fee,
technical assistance fee

9. Professional service by Base amount up Dhk – 10 Sec -

doctors to Tk. 25 lakh: 52AA
10% of base Ctg – 2
amount
Other -
RZ
Base amount
exceeding Tk. 25
lakh: 12% of base
amount
Payment to a resident for Base Base Dhk - 14 Sec -
the following services (Point amount amount 52AA
10 - 29) up to exceed- Ctg – 2
Tk. 25 ing Tk.
lakh 25 lakh Other -
RZ
10. Catering service Com- 10% 12%

mission
/ fee
Gross 1.5% 2%
bill
amount
11. Cleaning service Com- 10% 12%
mission
/ fee
Gross 1.5% 2%
bill
amount
12. Collection and Com- 10% 12%
recovery service mission
/ fee
Gross 1.5% 2%
bill
amount
13. Private security Com- 10% 12%
service mission
/ fee
Gross 1.5% 2%
bill
amount

14. Manpower supply Com- 10% 12%

service mission
/ fee
Gross 1.5% 2%
bill
amount
15. Creative media Com- 10% 12%
service mission
/ fee
Gross 1.5% 2%
bill
amount
16. Public relations Com- 10% 12%
service mission
/ fee
Gross 1.5% 2%
bill
amount
17. Event Com- 10% 12%
management mission
service / fee
Gross 1.5% 2%
bill
amount
18. Training, Com- 10% 12%
workshop etc. mission
organization and / fee
management
service Gross 1.5% 2%
bill
amount
19. Other services of Com- 10% 12%

similar nature mission
/ fee
Gross 1.5% 2%
bill
amount

20. Media buying Com- 10% 12%

agency service mission
/ fee
Gross 0.5% 0.65%
bill
amount
21. Indenting commission 6% 8%
22. Meeting fees, training fees 10% 12%
or honorarium
23. Credit rating agency 10% 12%
24. Motor garage workshop 6% 8%
25. Private container port or 6% 8%
dockyard service
26. Shipping agency commission 6% 8%
27. Stevedoring / berth 10% 12%
operation commission
28. Transport service, carrying 3% 4%
service, vehicle rental
service
29. Any service not mentioned 10% 12%
in Chapter – VII, except
for services provided by
bank, insurance or financial
institutions
30. Mobile network operator, Base amount up LTU Sec -
technical support service to Tk. 25 lakh: 52AA
provider, service delivery 10% of base
agents engaged in mobile amount
banking operations
Base amount
exceeding Tk. 25
lakh: 12% of base
amount
31. Clearing & forwarding 10% Dhk - 15 Sec -
agency commission 52AAA
Ctg – 3
Other -
RZ

32. Manufacturer of non- 10% of value of Dhk - 10 Sec – 52B

mechanical cigarette (Biri) banderols Ctg – 4
Other -
RZ
33. Compensation against 2% Dhk - 15 Sec – 52C
acquisition of immovable Ctg – 2
property situated in city
corporation, paurashava or Other -
cantonment board area RZ
34. Compensation against 1% Dhk - 15 Sec – 52C
acquisition of immovable Ctg – 2
property situated outside
city corporation, paurashava Other -
or cantonment board area RZ
35. Interest on saving 5% Dhk - 10 Sec – 52D
instruments Ctg – 4
Subject to certain Other -
conditions RZ
36. Payment of workers’ 5% Ctg – 2 Sec –
participation fund 52DD
Other
-3
37. Brick manufacturer Dhk - 7 Sec – 52F
― One section brick field Tk. 45,000 Ctg – 4
― One and half section Tk. 70,000 Other -
brick field RZ
― Two section brick field Tk. 90,000
― Automatic brick field Tk. 150,000
38. Commission of letter of 5% Ctg – 2 Sec – 52I
credit Other -
LTU
39. Travel agent 0.30% of airfare Dhk - 4 Sec –
or cargo charge 52JJ
Subject to certain Ctg – 2
conditions Other -
RZ

40. Renewal of trade license Dhk - 3 Sec – 52K

― Dhaka North and Tk. 500 Ctg – 2
South City Corporation
or Chittagong City Other -
Corporation RZ
― Other city corporation Tk. 300
― Paurashava at any Tk. 300
district headquarter
― Other paurashava Tk. 100
41. Freight forward agency 15% Dhk - 6 Sec – 52M
commission
Ctg – 3
Other -
RZ
42. Rental power company 6% Dhk - 13 Sec – 52N
Ctg – 3
Other -
RZ
43. Foreign technician serving in 5% Dhk - 9 Sec – 52O
a diamond cutting industry
44. Services from convention 5% Dhk - 4 Sec – 52P
hall, conference center, etc.
Ctg – 2
Other -
RZ
45. Services provided to any 10% Dhk - 11 Sec – 52Q
foreign person by a resident
46. International Gateway (IGW) 1.5% Dhk – 15 Sec – 52R
service operator
47. Interconnection Exchange 7.5%
(ICX), Access Network
Services (ANS), any other
person having agreement
with BTRC
48. Outgoing international call 7.5%
49. Manufacturer of soft drink 4% Gazipur Sec – 52S
and mineral or bottled water Zone

50. Payment in excess of 5% LTU Sec – 52T

premium paid on life
insurance policy
51. Local letter of credit (on 3% Ctg – 2 Sec – 52U
proceeds exceeding Tk.
500,000) Cox’s
Bazar – 2
Subject to certain
conditions Other –
LTU
52. Payment to regulatory 10% LTU Sec – 52V
authority by cellular mobile
phone operator
53. Importer 5% Dhk - 14 Sec – 53;
(The rate may vary subject Ctg – 1 Rule –
to certain conditions) 17A
Other -
RZ
54. Rent payment for house 5% Dhk - 7 Sec – 53A
property
Ctg – 2
Other -
RZ
55. Shipping business of a Dhk - 10 Sec –
resident 53AA
Ctg – 4
― Freight received or 5%
receivable in or out of Other -
Bangladesh RZ
― Freight received or 3%
receivable from service
rendered between
two or more foreign
countries
56. Export of manpower 10% Dhk - 4 Sec –
53B;
Rule –
17C

57. Export of knit wear, 1% Dhk - 4 Sec –

woven garments, terry 53BB;
towel, carton, garments SRO
accessories, jute goods, 0.70% for all – 256 /
frozen foods, vegetables, goods (except for AIN / IT
leather goods, and packed jute goods) till / 2017;
food 30 June 2018 SRO –
207 /
Subject to certain conditions AIN / IT /
0.60% for jute 2016
goods till 30 June
2019
58. Member of Stock Exchanges 0.05% Dhk - 7 Sec –
53BBB;
Ctg – 3
SRO –
334 – AIN
/ IT /
2011
59. Export of goods except for 1% Dhk – 4 Sec –
items specified in Section – 53BBBB;
53BB SRO
0.70% till 30 June – 256 /
Subject to certain conditions 2018 AIN / IT /
2017
60. Goods or property sold by 5% Dhk - 9 Sec –
public auction 53C;
1% for auction Ctg – 4
of tea Rule –
Other - 17D
RZ
61. Courier business of a non- 15% Dhk - 11 Sec –
resident 53CCC
62. Purchase of film, drama, TV 10% Dhk – 12 Sec – 53D

or radio program (1)
63. Performance in film, drama, 10% Dhk – 12 Sec – 53D
advertisement, TV or radio (2)
program
64. Export cash subsidy 3% Dhk – 4 Sec –
53DDD

65. Commission, discount, fees, 10% Dhk - 12 Sec – 53E

incentives, performance Ctg – 4 (1)
bonus, other performance
related incentive, benefit Other -
paid to distributor RZ
66. Promotion of a company or 1.5% Sec – 53E
its goods (2)
67. Distributor or other person 5% Sec – 53E
purchasing goods at a price (3)
lower than fixed retail price 3% in case of
distribution of
Subject to certain conditions cigarette
68. Commission or remuneration 10% Dhk - 6 Sec –
paid to agent of foreign 53EE
Ctg – 3
buyer
Other -
RZ
69. Interest or share of profit Dhk - 1 Sec – 53F
on savings deposit, fixed
deposit, term deposit
― If TIN is furnished 10%
― If TIN is not furnished 10%
and deposit amount is
up to Tk. 100,000
― If TIN is not furnished 15%
and deposit amount
exceeds Tk. 100,000
― Public university, 10%
educational
institutions, ICAB,
ICMAB and ICSB
― Fund 5%
70. Real estate or land As specified in Dhk - 5 Sec –
development business Section – 53FF 53FF
Ctg – 4
Other -
RZ
71. Insurance commission 5% LTU Sec – 53G
72. Fees or remuneration 15% LTU Sec –
of surveyor of general 53GG
insurance company

73. Transfer of property As specified in Dhk – Sec –

Section – 53H and Central 53H;
Rule – 17II survey Rule –
zone 17II
Ctg – 4
Other -
RZ
74. Lease of property 4% Dhk – Sec –
Central 53HH
Subject to certain conditions survey
zone
Ctg – 4
Other -
RZ
75. Interest on deposit of Post 10% Dhk - 9 Sec – 53I
Office Savings Bank Account Ctg – 4
Other -
RZ
76. Rental value of vacant land, 5% Dhk - 15 Sec – 53J
plant or machinery Ctg – 4
Other -
RZ
77. Advertisement or airtime 4% Dhk - 5 Sec – 53K
bill of newspaper, magazine, Ctg – 3
private TV channel, private
radio station, website Other -
RZ
78. Transfer of securities 5% Dhk - 3 Sec – 53M
or mutual fund units by Ctg – 3
sponsor shareholder,
director, placement holder
of listed companies
79. Transfer of shares of 15% Dhk - 3 Sec – 53N
shareholder of Stock
Exchange Ctg – 3
80. Signing money, subsistence 15% Dhk - 5 Sec – 53P
money, house rent etc. paid Ctg – 2
to land owner by real estate
developer Other -
RZ

81. Dividend Dhk - 13 Sec – 54

― Company 20% Ctg – 4
― Assessee other than 10% Other -
company, if TIN is RZ
furnished
― Assessee other than 15%
company, if TIN is not
furnished
82. Lottery 20% Dhk - 9 Sec – 55
Ctg – 3
Other -
RZ
Payment to a non-resident Dhk - 11 Sec – 56
for the following services or
cases (Point 83 - 110)
83. Advisory or consultancy 20%
service
84. Pre-shipment inspection 20%
service
85. Professional service, 20%
technical services, technical
know-how or technical
assistance
86. Architecture, interior 20%
design, landscape design,
fashion design, process
design
87. Certification, rating etc. 20%
88. Charge or rent for satellite, 20%
airtime or frequency , rent
for channel broadcast
89. Legal service 20%
90. Management service 20%
including event
management
91. Commission 20%
92. Royalty, license fee, payments 20%
related to intangibles

93. Interest 20%

94. Advertisement broadcasting 20%
95. Advertisement making, 15%
digital marketing
96. Air transport or water 7.5%
transport
97. Contractor or sub-contractor 7.5%
for manufacturing,
processing or conversion,
civil work, construction,
engineering or works of
similar nature
98. Supplier 7.5%
99. Capital gain 15%
100. Insurance premium 10%
101. Rental of machinery, 15%
equipment etc.
102. Dividend paid to company 20%
103. Dividend paid to person 30%
(except for company)
104. Artist, singer or player 30%
105. Salary or remuneration 30%
106. Exploration or drilling in 5.25%
petroleum operations
107. Survey for oil or gas 5.25%
exploration
108. Any service for making 5.25%
connectivity between oil or
gas field and its export point
109. Other services not specified 20%
110. Other payments 30% Central
survey
zone
111. Advance tax for ownership As specified in Central Sec – 68B
of private motor car Section – 68B survey
zone

112. Motor vehicle presumptive As specified in SRO Central SRO –

tax – 160 – AIN / 2014 survey 160 – AIN
zone / 2014
113. Cargo or launch presump- As specified in SRO Dhk - 5 SRO –
tive tax – 162 – AIN / IT / 162 – AIN
2014 Ctg – 3 / IT /
2014;
Other - SRO –
RZ 224 – AIN
/ IT /
2012
19. Set-off and carry forward of losses

[Section – 37, 38, 39, 41, 42]
The rules of set off and carry forward of any loss incurred is summarized below –
Head of income Set off Carry forward to Limitations for

set off against carry forward
following years’
income
Income from N/A N/A N/A
salary
Interest on Against income from Cannot be N/A
securities any other head carried forward
Income from Against income from Cannot be N/A
house property any other head carried forward
Agricultural Against income Set off against Time limit: 6
income from any other head agricultural successive years
except for income income
from capital gain
Amount Limit:
None
Income from Against income Set off against Time limit: 6
business or from any other head income from successive years
profession except for income same business or
from profession
Amount Limit:
― House property None
― Capital gain

Head of income Set off Carry forward to Limitations for
set off against carry forward
following years’
income
Income from Against any other Set off against Time limit: 6
speculation income from income from successive years
business speculation business speculation
business
Cannot be set off Amount Limit:
against any other None
head of income
Capital gains Against any other Set off against Time limit: 6
income from capital capital gains successive years
gain
Cannot be set off Amount limit:
against any other Amount
head of income exceeding Tk.
5,000
Income from Against income from Cannot be N/A
other sources any other head carried forward
Income from any Cannot be set off Cannot be N/A
source which is against any other carried forward
exempted from head of income
tax
However any loss in respect of any income from any head will not be set-off
against any income from manufacturing of cigarettes, biri, jarda, chewing
tobacco, gul, smokeless tobacco or any other tobacco products.
20. Carry forward of depreciation allowance

[Section – 42(6)]
Depreciation allowance which cannot be given full effect in any year because of
there being no profits / gains or being inadequate profits / gains, such unadjusted
allowance or part thereof will be carried forward to the succeeding years and will
be treated as part of depreciation allowance for those respective years. There is
no time limit or amount limit for such carry forward of depreciation allowance.
However carried forward business loss and loss in speculation business will be
set off before carried forward depreciation allowance is given effect in any year.

FILING OF RETURN
& PAYMENT OF TAX
21. Filing of return of income

[Section – 75]
The following persons are required file return of income -
 Whose total income during an income year exceeds the exemption limit
(i.e. the maximum amount which is not chargeable to tax)
 Who has been assessed to tax for any of the preceding three years
 Company
 Non-government organization registered with NGO Affairs Bureau
 Co-operative society
 Firm
 Association of persons
 Shareholder director or a shareholder employee of a company
 Partner of a firm
 An employee of the Government or an authority, corporation, body or units
of the Government or formed by any law, order or instrument being in
force, drawing a basic salary of Tk. 16,000 or more at any time in the
income year
 An employee holding an executive or a management position in a business
or profession
 Person (except for an institution established solely for charitable purpose
or a fund), having income during the income year which is subject to tax
exemption or lower tax rate under Section - 44
 Owns a motor car
 Owns a membership of a club registered under any law governing Value
Added Tax
 Runs any business or profession having trade license from a city corporation,
a paurashava or a union parishad

 Registered with a recognized professional body as a doctor, dentist, lawyer,
chartered accountant, cost and management accountant, engineer,
architect, surveyor or any other similar profession
 Registered with the Board as an income tax practitioner
 Has membership of a chamber of commerce and industries or a trade
association or body
 Runs for an office of any paurashava, city corporation, or a is Member of
Parliament
 Participant in a tender floated by the Government, semi-government,
autonomous body or local authority
 Serves in the board of directors of a company or a group of companies
Filing of return of income is not mandatory for the following persons. However
they can file return of income voluntarily
 Educational institution receiving Government benefits under Monthly
Payment Order (MPO)
 Public university
 Fund
 Any class of persons which the Board, by order in official gazette, exempt
from filing the return
The return of income will be filed using the forms prescribed in Rule – 24.
Individual assessees are required to furnish the following statements as per
Section – 80 (prepared in prescribed form and verified in prescribed manner)
accompanying the return of income –
 Statement of assets, liabilities and expenses (including those of spouse,
minor children and dependents if they are not assessee)
 Statement of expenses relating to lifestyle
Companies are required to furnish the following documents accompanying the

return of income –
 Audited statement of accounts
 A reconciliation between profit or loss shown in the accounts and profit
and loss shown in the return of income
Every return has to be filed on or before the tax day. Thus the last date of filing
return for all assessee (except for a company) is 30 November following the end
of income year. The last date of filing return for a company is 15th day of the 7th
month following the end of income year or 15th day of September following the
end of income year whichever is later.

21.1 Schedules and documents to be submitted with
return of income
The schedules, information, statements or documents required to be
submitted along with return of income is stated below –
Income from salary
 Schedule – 24A: Particulars of income from salaries [Rule – 24]
 Salary statement
 Bank statement or bank certificate, if bank account is maintained
or bank interest is earned
 Schedule – 24D: Particulars of tax credit / rebate, if tax rebate is
claimed [Rule – 24]
 Proof of investment eligible for tax rebate. For example, proof of
premium payment in case of life insurance policy
Interest on securities
 Photocopy of bond or debenture purchased during the year
 Certificate from interest providing authority in case of interest income
 Certificate from bank or bank statement in support of loan
interest, if loan is taken for purchase of bond or debenture
Income from house property

 Schedule – 24B: Particulars of income from house property [Rule – 24]
 Deed of rent, copy of rent receipt, monthly statement of house
property income, bank statement showing deposit of rent
 Copy of payment receipt of municipal tax, city corporation tax,
land development tax
 Certificate from bank and bank statement in support of loan interest,
if loan is taken for purchase or construction of house property
 Copy of payment receipt of insurance premium, if house property
is insured
Income from business or profession

 Schedule – 24C: Summary of income from business or profession
[Rule – 24]
 Income statement and balance sheet of business or profession
Income of partnership firm

 Income statement and balance sheet of partnership firm

Capital gains
 Copy of deed for sale or transfer of property
 Photocopy of challan or pay-order, if tax is deducted at source
 Certificate if capital gain arises from transaction of shares of
listed companies
Income from other sources

 Bank statement, certificate of / copy of dividend warrant, in case
of dividend income
 Copy of certificate obtained during encashment of / interest
received from savings certificate
 Certificate from bank or bank statement in support of interest income
 Relevant document for income from other sources
Payment of tax
 Copy of treasury challan / pay-order / bank draft / account payee
check
 Certificate of deduction from deducting authority, if tax is paid
at source
22. Filing of revised return

[Section – 78]
The following persons can file a revised return at any time before the assessment
is made
 A person who has not filed a return under Section – 75
 A person who has not filed a return as required by a notice issued by the
DCT under Section – 77
 A person who has filed a return but discovered any omission or incorrect
statement in such return
23. Return of withholding tax

[Section – 75A; Rule – 24A]
The following persons are required file return of withholding tax –
 Company
 Co-operative society
 NGO registered with NGO Affairs Bureau

Such return has to be filed half yearly as stated below –
Period of deduction or Withholding tax Last date of filing

collection at source return
1 July to 31 December First return 31 January of the relevant
financial year
1 January to 30 June Second return 31 July of the next financial year
The return of withholding tax will be filed using the form prescribed in Rule – 24A.
The return has to be signed and verified in the prescribed manner and accompanied
by prescribed schedules, statements, accounts, annexures or documents.
24. Payment of tax on the basis of return

[Section – 74]
Every person who is required to file a return under Section – 75, 77, 78, 89(2), 91(3)
& 93(1) has to pay tax on or before the date on which he / she files the return.
The amount of tax to be payable by him / her will be higher of (a) tax on the
basis of such return and (b) minimum tax liability as per Section - 82C(4), reduced
by the amount of any tax deducted or collected from his / her income and any
advance tax paid by him / her.
25. Payment of tax deducted at source

[Rule – 13, 14]
All taxes deducted or collected in accordance with Chapter – VII: Section - 48 to
63 of the Ordinance is required to be paid to the credit of the Government by
electronic payment or income tax challan to Bangladesh Bank or Sonali Bank. The
timeline for payment of such tax deducted or collected is stated below –
Time of deduction or collection Date of payment to the credit of the

Government
July to May Within 2 weeks of the following month
1 June to 20 June Within next 7 days
21 June to 28 June Next day
29 June and 30 June Same Day

26. Advance payment of tax
26.1 Advance tax based on income
[Section – 64 – 68, 70, 72, 73]
An assessee is required to pay advance tax in a financial year, if he / she has
total income exceeding Tk. 400,000 in the latest income year in respect
of which he / she has been assessed on regular basis or provisionally. If
a person, who has not been assessed previously by the way of regular
assessment, estimates his / her income to exceed Tk. 400,000 in the
income year, he / she is required to pay advance tax.
Minimum amount of advance tax payable = Total income of the latest
income year as assessed on regular basis or provisionally x Rates in force
in the respective financial year – Amount of TDS
If a person liable to pay advance tax estimates that his / her tax liability
in the relevant assessment year would be less than the advance tax
liability, he / she may submit an estimation of his / her tax liability and
pay reduced advance tax accordingly.
Advance tax is payable in 4 equal installments on 15 September, 15
December, 15 March and 15 June.
If the sum of advance tax paid and tax deducted or collected at source
for an assessee is less than 75% of tax determined on regular assessment,
such assessee is required to pay 10% interest per annum on such shortfall.
The interest rate in such cases is 15% if an assessee does not file return of
income on or before the tax day.
If the advance tax paid by an assessee exceeds the tax determined on
regular assessment, Government will pay 10% interest per annum on such
excess.
26.2 Advance tax on cigarette manufacturers

[Section – 68A]
A manufacturer of cigarette has to pay advance tax every month at 3% on
net sale price (gross sale – VAT and supplementary duty).
26.3 Advance tax on private motor car owners

[Section – 68B]
Every person owning a private motor car is deemed to have an income
by which the motor car is maintained and has to pay advance tax at the
following rate –

Type and engine capacity of motor car Amount of tax
A car or a jeep, not exceeding 1500 cc Tk. 15,000
A car or a jeep, exceeding 1500 cc Tk. 30,000
but not exceeding 2000 cc
A microbus Tk. 20,000
The rate of tax is 50% higher for each additional motor car owned
individually or jointly by if the owner.
The following persons are not required to pay advance tax for owning a
motor car –
 Government and local Government
 Project, program or activity under the Government and the local
Government
 Foreign diplomat, diplomatic mission in Bangladesh, United
Nations and its offices
 Development partner of Bangladesh and its affiliated office or offices
 Educational institution under the Monthly Payment Order of the
Government
 Public university
 Entity that is not a person as defined under Section - 2(46)
 Gazetted war-wounded freedom fighter
 Institution that has obtained a certificate from the Board that
advance tax will not be collected from it
27. Mode of payment

[Rule – 26A]
All payments of tax under Section - 64, 70, 73, 74, 82D, 83(2), 84, 89(3), 107(2)
(a), 120, 121(4)(a), 123 -129, 135(2), 137(1), 154(1), 158(5), 160(1) and any other
payments under the Ordinance is required to be made by pay order or demand
draft or account payee cheque of any scheduled bank in favor of concerned DCT
or electronic payment.
However if the payment does not exceed Tk. 10,000, then it can be made through
treasury challan.

ASSESSMENT
28. Provisional assessment

[Section – 81]
The DCT can make a provisional assessment of tax in a summary manner at any
time after 1 July of the concerned income year, based on the following –
 Return, accounts and documents, if filed
 The last assessment including provisional assessment, if return is not filed
29. Assessment on correct return

[Section – 82]
Where a return or revised return is filed fulfilling certain conditions and the
DCT is satisfied that the return is correct and complete without requiring the
presence of the assessee or production of any evidence, he / she will assess
the total income and determine the tax payable on the basis of such return and
communicate the assessment order to the assessee within 30 days.
30. Universal self-assessment

[Section – 82BB]
Where an assessee furnishes a return of income fulfilling certain conditions and
pays tax on the basis of such return in accordance with Section – 74 and 75, the
DCT or other authorized official will issue an acknowledgement receipt. Such
acknowledgement receipt will be deemed as assessment order.
The DCT will process the return by computing income, tax, refund and other
related particulars based on the information available from the return and
accompanying documents and considering any arithmetical error or incorrect
claim apparent from it. Where any difference arises from the original return, the
assessee will be served a notice and will get an opportunity to explain his / her
position, file an amended return and pay any additional liability. If an assesee
fails to do so, he / she will be served a notice of demand.
An assessee will be able to file an amended return if any shortfall in tax or other
payable amount is shown in the original return due to unintentional mistakes such
as under-reporting income; over-reporting rebate, exemption, credit; other reasons.
Such return has to be filed within 180 days of filing the original return but cannot be
filed after original return has been selected for audit. The amount of shortfall has to
be paid along with 2% interest on or before filing the amended return.

The Board may select a number of returns or amended returns for the purpose of
audit. However such a return or amended return would not be selected for audit
if following conditions are met –
 At least 15% higher income than the total income assessed in the
immediately preceding assessment year is shown
 Accompanied by corroborative evidences in support of tax exempted income
 Accompanied by a copy of bank statement or account statement supporting
any sum or aggregate of sums of loan exceeding Tk. 500,000 taken other
than from a bank or financial institution
 Does not show receipt of gift during the year
 Does not show any income subject to tax exemption or reduced tax rate
under Section – 44
 Does not show or result any refund
If any discrepancy is found by the DCT in the audit of a return or amended return,
the assessee will be served a notice and will get an opportunity to file a revised
return and pay any additional liability. If an assesee fails to do so, he / she will
be assessed under Section – 83 or 84, as applicable.
A new assessee will not be asked any question regarding the source of initial
capital of a business or profession if the following conditions are met -
 Income from such business or profession exceeds the tax exemption
threshold as well as it is not less than 20% of the initial capital invested
 Tax is paid at regular rate
 A statement stating applicability of this provision is attached
However, a minimum level of capital equivalent to the initial capital investment

has to be maintained for 5 years from the income year in which it was first shown.
Any shortfall in the closing balance of capital within this specified period will be
treated as income from business or profession in the respective income year.
31. Spot assessment

[Section – 82D; Rule – 38B]
The DCT may fix tax payable by an assessee (except for a company), who has
not been assessed previously and carries on any business or profession in any
shopping center or commercial market or has a small establishment. The receipt
obtained for payment of tax in such case will be considered as assessment order.
32. Assessment after hearing

[Section – 83]
When a DCT is not satisfied with the correctness and completeness of a return or
revised return, he / she will serve a notice requiring the presence of the person
filing the return for hearing or production of evidence supporting the return.

Within 30 days of the hearing and consideration of the evidences, the DCT will
assess the income and determine the amount of tax and communicate the order
within 30 days of such assessment.
33. Assessment on the basis of report of a Chartered

Accountant
[Section – 83AAA]
If the Board has reasonable cause to believe that a return or revised return filed
by a company is incorrect or incomplete, it may appoint a registered Chartered
Accountant to examine the accounts of the assesse.
The Chartered Accountant will submit a report of findings to the Board. The DCT
will assess the total income and determine the tax liability based on the report
of the Chartered Accountant, other evidences and hearing of the assessee.
34. Best judgement assessment

[Section – 84]
The DCT will assess the total income and determine the tax liability as per his /
her best judgement in the following cases –
 Where a person fails to file a return required by a notice under Section – 77
 Where a person has not filed a return or revised return under Section – 78
 Where a person fails to comply with the requirements of a notice under
Section – 79, 80 or 83(1)
35. Other assessments

Assessments for some special cases are handled with according to dedicated
sections as listed below –
Special case Reference

Special provisions regarding assessment of firms Section – 85
Assessment in case of change in the constitution of a firm Section – 86
Assessment in case of constitution of new successor firm Section – 87
Assessment in case of succession to business otherwise than on Section – 88
death
Assessment in case of discontinued business Section – 89
Assessment in case of partition of a Hindu undivided family Section – 90
Assessment in case of persons leaving Bangladesh Section – 91
Assessment in case of income of a deceased person Section – 92
Assessment in case of income escaping assessment Section – 93

TAX INCENTIVE
There are broadly three categories of tax incentives that are provided to the assessees
by the Government with the aim reduce their tax burden, promote ethical and
transparent tax practice and encourage investment. The categories are tax exemption,
reduced rate of tax and tax rebate.
36. Tax exemption

The following table is an extensive but not exhaustive list of the tax exemptions
provided by the Government to different types of assessees (individual, firm,
association of persons, Hindu undivided family, trust, fund, local authority,
company, entity and other artificial juridical person). It compiles the exemptions
provided to such assessees through Income Tax Ordinance, 1984 (ITO, 1984) and
SROs issued by the Government at different times.
Sl. Assessee / Applicable for Source of Rate of Period of

income exemption exemption
1. ― Industrial undertakings set All income, 100% First 2
up in Dhaka, Mymensingh7 profits and years
and Chittagong divisions gains except
(excluding Dhaka, capital
Narayangonj, Gazipur, gain and
Chittagong, Bandarban, disallowance
Rangamati and under Section
Khagrachari) between 1 – 30
July, 2011 and 30 June,
2019

― Engaged in production 60% 3rd year
of active pharmaceutical
ingredient industry and
radio pharmaceutical
industry; automobile
manufacturing industry;
barrier contraceptive
and rubber latex; basic
chemicals or dyes
and chemicals; basic
ingredients of electronic
industry (e.g. resistance, 40% 4th year
capacitor, transistor,
integrator circuit);
bi-cycle manufacturing
industry; bio-fertilizer;
bio-technology; boilers;
brick made of automatic
Hybrid Hoffman Kiln or
Tunnel Kiln technology;
compressors; computer
hardware; energy efficient
appliances; insecticide or
pesticide; petro-chemicals;
pharmaceuticals;
processing of locally
produced fruits and 20% 5th year
vegetables; radio-active
(diffusion) application
industry (e.g. developing
quality or decaying
polymer or preservation
of food or disinfecting
medicinal equipment);
textile machinery;
tissue grafting; tyre
other industrial
undertakings specified by
the Government
― Subject to fulfilling certain
conditions
[Section – 46B]

2. ― Industrial undertakings set All income, 100% First 2
up in Rajshashi, Khulna, profits and years
Sylhet, Barisal and Rangpur gains except
divisions (excluding City capital
Corporation area) and gain and
Bandarban, Rangamati and disallowance
Khagrachari between 1 July, under Section
2011 and 30 June, 2019
– 30
― Engaged in production 70% 3rd year
of active pharmaceutical
ingredient industry and
radio pharmaceutical
industry; automobile
barrier contraceptive
and rubber latex; basic
chemicals or dyes and 55% 4th year
chemicals; basic ingredients
of electronic industry
(e.g. resistance, capacitor,
transistor, integrator circuit);
bi-cycle manufacturing
industry; bio-fertilizer;
bio-technology; boilers;
brick made of automatic 40% 5th year
Hybrid Hoffman Kiln or
Tunnel Kiln technology;
compressors; computer
hardware; energy efficient
appliances; insecticide or
pesticide; petro-chemicals;
pharmaceuticals; processing
of locally produced fruits
and vegetables; radio-active 25% 6th year
(diffusion) application
industry (e.g. developing
quality or decaying polymer
or preservation of food
or disinfecting medicinal
equipment); textile
machinery; tissue grafting;
tyre manufacturing industry; 20% 7th to 10th
other industrial undertakings year
specified by the Government
conditions
[Section – 46B]

3. ― Physical infrastructure All income, 100% First 2
facilities set up between 1 profits and years
July, 2011 and 30 June, 2019 gains except
capital 80% 3rd year
― Includes deep sea port; gain and
elevated expressway; disallowance
flyover; gas pipeline; under Section 70% 4th year
hi-tech park; Information – 30
and Communication
Technology (ICT) village or 60% 5th year
software technology zone;
Information Technology
(IT) park; large water 50% 6th year
treatment plant and supply
through pipeline; Liquefied
Natural Gas (LNG) terminal 40% 7th year
and transmission line;
mono-rail; rapid transit;
renewable energy (e.g. 30% 8th year
energy saving bulb,
solar energy plant,
windmill); sea or river 20% 9th year
port; toll road or bridge;
underground rail; waste
treatment plant; other 10% 10th year
physical infrastructure
facilities specified by the
Government
conditions
[Section – 46C]
4. ― Industries established on or Income from 100% First 2
after 1 January, 2012 in the such industry years
Export Processing Zones
of Dhaka and Chittagong
divisions (except in 50% Next 2
Bandarban, Rangamati years
& Khagrachhari); as
mentioned in the
Bangladesh Export
Processing Zones Act, 25% Next 1
1980 (Section - 10) or the year
Bangladesh Private Export
Processing Zones Act, 1996
[SRO – 219 – AIN / IT / 2012]

5. ― Industries established on Income from 100% First 3
or after 1 January, 2012 in such industry years
the Export Processing Zones
of Bandarban, Rangamati,
Khagrachhari and divisions
other than Dhaka and 50% Next 3
Chittagong divisions; as years
mentioned in the Bangladesh
Export Processing Zones Act,
1980 (Section - 10) or the 25% Next 1
Bangladesh Private Export
Processing Zones Act, 1996 year
[SRO – 219 - AIN / IT / 2012]

6. ― Private power ― Income Full 15 years
generation companies from power from the
(except for coal based generation date of
electricity generation business starting
companies) starting ― Interest operation
operation within 31 payable on
December, 2019 foreign loan
― Royalties,
[SRO – 211 – AIN / IT / technical
2013; SRO – 354 – AIN / IT know-how
/ 2013; SRO – 246 – AIN / and technical
assistance
IT / 2016] fees payable
― Capital gain
form transfer
of company’s
share
7. ― Private coal based ― Income Full 15 years
electricity generation from power from the
companies signing generation date of
contract within 30 June, business starting
2020 ― Interest operation
payable on
[SRO – 213 - AIN / IT / foreign loan
2013] ― Royalties,
technical
know-how
and technical
assistance
fees payable
― Capital gain
form transfer
of company’s
share

8. ― Private power Income 100% First 5
generation companies from power years
(except coal based generation
50% Next 3
electricity generation business
years
companies) starting
operation on or after 1 25% Nest 2
July, 2016 years
[SRO – 212 – AIN / IT / 2013;
SRO – 355 – AIN / IT / 2013]
9. ― Russian company Income from Full Period
Atomstroyexport execution of the
of contracts project
― Related to Ruppur related to
Nuclear Power Plant Ruppur Nuclear
Project Power Plant
Project
[SRO – 242 – AIN / IT / 2016]
10. ― Japanese company Income from Full Not
Marubeni Corporation, execution of specified
Japan contracts, supply,
consultancy
― Related to Bheramara related to Related
Combined Cycle Power to Bheramara
Plant Development Combined Cycle
Project Power Plant
Development
[SRO – 248 – AIN / IT / 2017] Project
11. ― Excelerate Energy ― Income from Full 15 years

Bangladesh Limited Floating LNG from the
(EEBL) terminal Storage and date of
company Regasification production
Facility
― Related to Floating Project
LNG Storage and ― Interest
Regasification Facility payable on
Project foreign loan
― Royalties,
[SRO – 102 – AIN / IT / technical
2017] know-how
and technical
assistance
fees payable
― Capital gain
form transfer
of company’s
share

12. ― Renewable energy Income from Full 5 years
projects such projects from the
date of
[SRO – 228 – AIN / IT / 2009] commercial
production
13. ― Industrial undertaking Income from 100% First 2
engaged in production such business years
of rice bran oil
― Commencing production 50% Next 2
by 30 June, 2019 years
― Set up in Dhaka,
Mymensingh and 25% Next 1
Chittagong divisions year
(excluding city
corporation area,
Bandarban, Rangamati
and Khagrachari
districts)
[6th Schedule, Part – A,

Para – 45]
14. ― Industrial undertaking Income from 100% First 3
engaged in production such business years
of rice bran oil
― Commencing production
by 30 June, 2019 50% Next 3
years
― Set up in Rajshashi,
Khulna, Sylhet, Barisal
and Rangpur divisions 25% Next 4
(excluding city years
corporation area) and
Bandarban, Rangamati
and Khagrachari
districts

Para – 45]

15. ― Company engaged in ― Income from Full 10 years
PPP projects of national such business from the
highways, expressways, commence-
related service roads; ― Capital gain ment of
flyovers; elevated and form transfer commercial
at-grade expressways; of company’s activities
river bridges; tunnels; share
river port; sea port;
airport; subway; ― Royalties,
monorail; railway; bus technical
terminals, bus depots, know-how
elderly care home and technical
assistance
fees payable
[SRO – 208 - AIN / IT / 2017;
SRO – 209 - AIN / IT / 2017]
16. ― Company engaged in Income from 100% First 3
production of goods or such business years
rendering services in
80% 4th year
economic zones under
Bangladesh Economic 70% 5th year
Zones Act, 2010
60% 6th year
[SRO – 226 - AIN / IT /
2015; SRO – 299 - AIN / IT 50% 7th year
/ 2015]
40% 8th year
30% 9th year
20% 10th year
― Dividend Full 10 years

declared from the
commence-
― Capital gain ment of
form transfer commercial
of company’s activities
share
― Royalties,
technical
know-how
and technical
assistance
fees payable

17. ― Developer appointed in Income from 100% First 10
economic zones under such business years
Bangladesh Economic
Zones Act, 2010
70% 11th year
[SRO – 227 - AIN / IT / 2015]
30% 12th year
18. ― Company engaged in Income from 100% First 3

production of goods or such business years
rendering services in
80% 4th year
park under Bangladesh
Hightech Park Authority
Act, 2010 70% 5th year
[SRO – 228 - AIN / IT / 2015; 60% 6th year

SRO – 301 - AIN / IT / 2015]
50% 7th year
40% 8th year
30% 9th year
20% 10th year
― Dividend Full 10 years

declared from the
commence-
― Capital gain ment of
form transfer commercial
of company’s activities
share
― 50% of
Royalties,
technical
know-how
and technical
assistance
fees payable

19. ― Developer appointed in Income from 100% First 10
park under Bangladesh such business years
Hightech Park Authority
Act, 2010 70% 11th year
[SRO – 229 - AIN / IT / 30% 12th year

2015; SRO – 302 - AIN / IT
/ 2015]
Dividend 10 years
declared from the
commence-
ment of
commercial
activities
20. ― Cinema hall or Cineplex Income derived 100% First 2
set up in Dhaka, from such years
Mymensingh and cinema hall or
Chittagong divisions Cineplex
(excluding Bandarban, 50% Next 2
Rangamati and years
Khagrachari districts)
starting commercial 25% Next 1
exhibition between 1 year
July 2012 and 30 June
2019

Para – 44]
21. ― Cinema hall or Cineplex Income derived 100% First 3
set up in Rajshashi, from such years
Khulna, Sylhet, Barisal cinema hall or
and Rangpur divisions Cineplex 50% Next 3
and Bandarban, years
Rangamati and
Khagrachari districts 25% Next 4
starting commercial years
exhibition between 1
July 2012 and 30 June
2019

Para – 44]

22. ― Software development; Income from Full 1 July,
software or application such business 2008 to
customization; 30 June,
Nationwide 2024
Telecommunication
Transmission Network
(NTTN); digital content
development and
management; digital
animation development;
website development;
website services; web
listing; IT process
outsourcing; website
hosting; digital graphics
design; digital data
entry and processing;
digital data analytics;
Geographic Information
Services (GIS); IT
support and software
maintenance service;
software test lab
services; call center
service; overseas
medical transcription;
search engine
optimization services;
document conversion,
imaging and digital
archiving; robotics
process outsourcing;
cyber security services

Para – 33]
23. ― Business of corn or Income from 50% Not
maize or sugar beet such business specified
production

Para – 46]

24. ― Export business Income from 50% Not
business of specified
― All except for company export
not registered in
Bangladesh
― Not enjoying any other
exemption or reduction
in tax rate

Para – 28]
25. ― Handicraft export Income from Full 1 July,
business such business 2008 to
30 June,
[6th Schedule, Part – A, 2019
Para – 35]
26. ― Small and medium Income from Full Not
enterprise (SME) such business specified
engaged in production
of goods
― Maximum annual
turnover Tk. 36 lakh

Para – 39]
27. ― Companies investing Income from Full Period
in Bangladesh such company specified
under any bi-lateral in the
treaty / contract treaty /
between Bangladesh contract
Government and any
foreign Government /
investment organization
established by any
foreign Government
[SRO – 32 - AIN / IT / 1990]

28. ― Company Income donated Upto lower Not
to funds of specified
[6th Schedule, Part – A, established ― 20% of
Para – 47] under Trust of income
Prime Minister’s of the
Education company
Assistance Act,
2012) ― 8 crore
29. ― NGO registered with Operation of Full Not
NGO Affairs Bureau micro credit specified

Para – 1A]
30. ― Religious or charitable Voluntary Full Not
institution contribution specified
applicable to
[6th Schedule, Part – A, religious and
Para – 2] charitable
purpose
31. ― Trust or other legal Income from Full / Not
obligation held for house property proportion specified
religious or charitable applied or
purpose set apart
for such
[6th Schedule, Part – A, religious or
Para – 1] charitable
purpose
32. ― Trustee Income on Full Not
behalf of a specified
[6th Schedule, Part – A, recognized
Para – 6] provident
fund, approved
superannuation
fund, approved
pension fund,
approved
gratuity fund
33. ― Commercial and trade All income Full Not
association, commercial except income specified
and trade federation from interest
and income
[SRO – 210 – AIN / IT / from business
2013]

34. ― Co-operative society ― Income from Full Not
business of specified
[Section – 47] agricultural or
rural credit;
cottage indus-
try; marketing
of agricultural
produce of
its members;
purchase of
agricultural
implements,
seeds, live-
stock or other
articles in-
tended for ag-
riculture for
the purpose
of supplying
them to its
members;
such process-
ing of the
agricultural
produce of its
members as
is ordinarily
employed by
a cultivator
to render the
agricultural
produce mar-
ketable
― Income from
letting of
godowns or
warehouse for
the purpose
of storage,
processing or
facilitating
the marketing
of commodi-
ties belonging
or meant for
sale to its
members

35. ― Private agricultural Agricultural Full Not
college or private educational specified
agricultural university activities

Para – 37]
36. ― Educational institution All income Full Not
except interest specified
― Enlisted for Monthly and dividend
Pay Order (MPO) of the
Government
― Following the
curriculum approved by
the Government
― Governed by a
body formed as per
Government rules and
regulations

Para – 52]
37. ― Public university All income Full Not
except interest specified
― Professional institute and dividend
established under
any law and run by
professional body of
Chartered Accountants
or Cost and Management
Accountants or
Chartered Secretaries

Para – 53]
38. ― Local Government All income Full Not
specified
Para – 3]
39. ― Partner of a firm Share of Full Not
capital gain on specified
[6th Schedule, Part – A, which tax has
Para – 18] already been
paid by the
firm

40. ― Individual earning Special Full Not
income from salary allowance, specified
benefits or
[6th Schedule, Part – A] perquisites
granted for
official purpose
[Para – 5]
41. Pension Full Not
Specified
[Para – 8]
42. Gratuity Up to Tk. Not
2 crore 50 specified
[Para – 20] lakh
43. Interest Lower of Not
credited on specified
accumulated ― One third
balance of of the
recognized basic
provident fund salary
[Para – 25] ― Interest

at max-
imum
14.5%
44. Income Full Not
accruing to Specified
/ derived by
a provident
fund as per
Provident
Funds Act,
1925
[Para – 4(1)]
45. Payment form Full Not
provident specified
fund as per
Provident
Funds Act,
1925
[Para – 21]

46. Payment from Full Not
recognized specified
provident fund
[Para – 21]
47. Payment from Full Not
approved specified
superannuation
fund
[Para – 21]
48. Income
accruing to
/ derived
by workers
participation
fund provident
fund
established
under
Bangladesh
Labour Act,
2006
[Para – 4(2)]
49. Payment Up to Tk. Not
from workers 50,000 specified
participation
fund
established
under
Bangladesh
Labour Act,
2006
[Para – 21]
50. ― Individual Bangladeshi Foreign Full Not
Citizen remittances specified
brought in
[6th Schedule, Part – A, Bangladesh as
Para – 48] per existing
laws

51. ― Individual whose only Agricultural Up to Tk. 2 Not
source of income is income lakh specified
agriculture

Para – 29]
52. ― Indigenous Hillman of Income from Full Not
Rangamati, Bandarban economic specified
and Khagrachari activities
districts undertaken in
such districts
Para – 27]
53. ― Foreign faculty members, Salaries and Full Not
teaching, research or allowances specified
library staff members,
administrators, officers,
experts, technicians,
visiting personnel of
Asian University for
Women
[SRO – 17 - AIN / IT / 2009]

54. ― Government employee All benefits Full Not
and allowances specified
[SRO – 211 – AIN / IT / 2017] except for
basic salary,
festival bonus
and bonus
55. ― Government employee Monetary Full Not
award received specified
[SRO – 245 – ACT / IT / 2001] for outstanding
contribution
towards
Government
56. ― Employees of Amount Full Not
Government received on specified
organization, local voluntary
authority, autonomous retirement
or semi-autonomous
body including the
units or enterprises
controlled by it

Para – 26]

57. ― Chief justice, judges All benefits Full Not
of Appellate Division and allowances specified
of Bangladesh supreme except for
court, judges of High basic salary
Court Division
[SRO – 227 – AIN / IT / 2011]

58. ― Prime minister, Speaker, All benefits Full Not
Minister, Deputy and allowances specified
Speaker, State Minister, except for
Deputy Minister basic salary or
and Advisor having remuneration
Ministerial status and
Members of Parliament
[SRO – 226 – AIN / IT / 2011]

59. ― Expatriates working Income from Full 3 years
in private power working in from the
generation companies private power date of
(except coal based generation arrival in
electricity generation companies Bangladesh
companies) starting (except
commercial production coal based
within 31 December, electricity
2019 generation
companies)
[SRO – 211 – AIN / IT / 2013;
SRO – 354 – AIN / IT / 2013;
SRO – 246 – AIN / IT / 2016]
in private coal based working from the
electricity generation in private date of
companies signing coal based arrival in
contract within 30 June, electricity Bangladesh
2020 generation
company
[SRO – 213 – AIN / IT / 2013]
61. ― Expatriate employees Income from Full Period
and consultants working in of the
appointed by Ruppur Nuclear project
Russian company Power Plant
Atomstroyexport for Project
Ruppur Nuclear Power
Plant Project
[SRO – 242 – AIN / IT / 2016]

62. ― Japanese expatriates Income from Full Not
appointed by Marubeni working in specified
Corporation, Japan and Bheramara
joint venture of Tokyo Combined
Electric Power Services Cycle
Co. Ltd. & Fichtner Power Plant
GmbH & Co. KG for Development
Bheramara Combined Project
Cycle Power Plant
Development Project
[SRO – 248 – AIN / IT / 2017]

in Excelerate Energy working in from the
Bangladesh Limited EEBL terminal date of
(EEBL) terminal company company arrival in
Bangladesh
[SRO – 102 – AIN / IT / 2017]
64. ― Expatriates with Income from 50% of tax 3 years
technical know-how working in such liability from ap-
working in a company company pointment
engaged in production date
of goods or rendering
services in economic Not appli-
zones under Bangladesh cable after
Economic Zones Act, 5 years of
2010 commence-
ment of
[SRO – 298 – AIN / IT / 2015] commer-
cial activi-
ties of the
company
65. ― Expatriates working in Income from 50% of tax 3 years
a company engaged in working in such liability from ap-
production of goods or company pointment
rendering services in date
park under Bangladesh
Hightech Park Authority Not appli-
Act, 2010 cable after
5 years of
[SRO – 300 – AIN / IT / 2015] commence-
ment of
commer-
cial activi-
ties of the
company

66. ― Expatriate technicians Income from 50% of tax 3 years
working in PPP projects working in such liability from ap-
of national highways, projects pointment
expressways, related date
service roads; flyovers;
elevated and at-grade
expressways; river Not appli-
bridges; tunnels; river cable after
port; sea port; airport; 5 years of
subway; monorail; commence-
railway; bus terminals, ment of
bus depots, elderly care commer-
home cial activi-
ties of the
[SRO – 210 – AIN / IT / 2017] company
67. ― Expatriates working Income from Full Till 13
in Dhaka Elevated salary and August,
Expressway PPP Project remuneration 2018
from Dhaka
[SRO – 358 – AIN / IT / 2016] Elevated
Expressway
PPP Project
68. ― Expatriates working in Salaries and Full Not
International Committee remuneration specified
of Red Cross (ICRC) in provided by
Bangladesh International
Committee
[SRO – 80 – AIN / IT / 2010] of Red Cross
(ICRC) from
Bangladesh or
abroad
69. ― Expatriates working Income from Full Not
as technician, salary specified
professionals, scientists,
senior administration
staff, advisor and
consultant in Local
Development Network
Institutions under Aga
Khan Development
Network
[SRO – 101 – AIN / IT / 2003]

70. ― Expatriates working Salaries and Full Not
in foreign funded allowances specified
development projects received from
having bi-lateral treaty the foreign
between Bangladesh Government
Government and the or the foreign
foreign Government funded
or foreign funding development
organization project
[SRO – 207 – AIN / IT / 1997]

71. ― Ambassador, high Remuneration Full Not
commissioner, envoy, from such specified
minister, charge state for
d’affairs, commissioner, service in such
counsellor, consul de capacity
carrier, secretary,
advisor or attache
of an embassy, high
commission, legation or
commission of a foreign
State

Para – 7]
72. ― Trade commissioner Official salary; Full Not
or other official specified
representative of Provided that
a foreign state in corresponding
Bangladesh official of
Bangladesh in
[6th Schedule, Part – A, such country
enjoys such
Para – 7]
exemption
73. ― Non-resident assessee Capital gain Full Not
from transfer specified
[6th Schedule, Part – A, of stock or
Para – 43] shares of
listed company
subject to
enjoying
similar
exemption
in resident
country

74. ― All shareholders except Income Full Not
for arising from specified
transaction
― Companies defined of securities
in Section – 2(20) listed in any
SEC approved
― Firms defined in Stock Exchange
Section – 2(32) (excluding
Government
― Sponsor shareholder
securities)
or shareholder
director of bank,
financial institution,
merchant bank,
insurance
company, leasing
company, portfolio
management
company, stock
dealer or stock
brokerage company
― Shareholder (except
sponsor shareholder
or shareholder
director) having
10% or more of
shares of total
paid up capital
of a company /
companies listed in
any stock exchange
― Sponsor
shareholder,
director, placement
holder of a
company
― Sponsor or placement
holder of a mutual fund
[SRO – 196 – AIN/ IT /

2015]

75. ― All assessee ― Income from Full 10 years
any building from the
[6th Schedule, Part – A, situated in date of
Para – 38] areas other completion
than in City of con-
Corporation, struction
Cantonment
Board, Tongi
Upazila,
Narayanganj
Paurasha-
va, Gazipur
Paurashava,
and any
Paurashava
under Dhaka
District
― Maximum 5
storied with
at least 10
flats
― Constructed
between 1
July, 2009 and
30 June, 2014
76. ― All assessee Dividend from Tk. 25,000 Not
a company specified
[6th Schedule, Part – A, listed in
Para – 11A] Bangladesh
77. ― All assessee Income from a Tk. 25,000 Not

mutual fund or specified
[6th Schedule, Part – A, unit fund
Para – 22A]
78. ― All assessee Interest on Full Not
tax-free specified
[6th Schedule, Part – A, Government
Para – 24] security

79. ― All assessee Income from Full Not
wage earners specified
[6th Schedule, Part – A, development
Para – 24A] bond, US dollar
premium bond,
US dollar
investment
bond, Euro
premium
bond, Euro
investment
bond, Pound
sterling
investment
bond, or
Pound sterling
premium bond
80. ― All assessee Interest from Full Not
pensioner’s specified
[6th Schedule, Part – A, savings
Para – 32A] certificate
provided that
the limit of
investment
is up to Tk. 5
lakh
81. ― All assessee except Income from Full Not
bank, insurance or any investment in specified
financial institutions zero coupon
bond issued
[6th Schedule, Part – A, by any bank,
Para – 40] insurance,
financial
[SRO – 203 – AIN / IT / 2005] institution
or other
institution
approved by
Bangladesh
Bank and SEC
82. ― All assessee Income from Up to Tk. Not
Bangladesh 25,000 specified
[SRO – 154 – AIN / IT / 1999] Industrial
Development
Bond issued by
nationalized
commercial
bank

83. ― All assessee Income from Up to Tk. Not
bond issued by 25,000 specified
[SRO – 66 – AIN / IT / 2004] Government,
semi-Government
or autonomous
body engaged
in electricity
production and
supply
savings pension specified
[SRO – 89 – AIN / IT / 2003] scheme of
scheduled bank
approved by
Government
fixed or savings specified
[SRO – 181 – AIN / IT / 2013] deposit of
Sweden –
Bangladesh Trust
Fund
86. ― All assessee Income donated Full Not
to Prime specified
[SRO – 125 – AIN / IT / 1991] Minister’s Relief
Fund
87. ― All assessee except Income donated Up to lower Not
company to funds of specified
established
under Trust of ― 20% of
[6th Schedule, Part – A, Prime Minister’s income
Para – 47] Education of the
Assistance Act, assessee
2012)
― Tk. 1
crore
to any girls’ specified
[6th Schedule, Part – A, school or girls’
college approved
Para – 49] by Ministry of
Education
to any Technical specified
[6th Schedule, Part – A, and Vocational
Para – 50] Training Institute
approved by
Ministry of
Education

90. ― All assessee Income Full Not
donated to any specified
[6th Schedule, Part – A, national level
Para - 51] research and
development
(R&D) institute
of agriculture,
science,
technology
and industrial
development
an alternative specified
[6th Schedule, Part – A, investment
Para - 54] fund
recognized by
Bangladesh
Securities
and Exchange
Commission
(BSEC)
92. ― All assessee Honorarium Full Not
or allowance specified
[6th Schedule, Part – A, received from
Para - 56] Bangladesh
Freedom
Fighters’
Welfare Club
Welfare
allowance
received from
Government
93. ― All assessee Reward Full Not
received from specified
[6th Schedule, Part – A, Government
Para - 57]
operation of specified
[6th Schedule, Part – A, elderly care
Para - 58] home

37. Reduced rate of tax
The following table lists down the reduced tax rate benefit offered by the
Government to different types of assessees. It compiles the reduced tax rate
benefit provided to such assessees through Income Tax Ordinance, 1984 (ITO,
1984) and SROs issued by the Government at different times.
Sl. Assessee / Applicable Source of income Reduced rate Period

for of tax applicable
1. ― Companies ― Yarn manufac- 15% 1 July,
registered under turing, yarn 2015 to
Companies dying, finish- 30 June,
Act, 1994 and ing, coning 2019
engaged in textile
manufacturing ― Fabric man-
ufacturing,
[SRO – 193 – AIN / fabric dying,
finishing,
IT / 2015]
printing
2. ― Industrial Manufacturing of For company: Assessment
undertaking jute goods 10% year 2016 –
engaged in 2017, 2017
manufacturing of For other – 2018,
jute goods assessees: 2018 – 2019
Highest rate and 2019 –
[SRO – 258 – AIN / will be 10% 2020
IT / 2016]
3. ― Industrial Export of For company: Assessment
undertaking manufactured 10% year 2016 –
engaged in jute goods 2017, 2017
manufacturing of For other – 2018,
jute goods assessees: 2018 – 2019
Highest rate and 2019 –
[SRO – 205 – AIN / will be 10% 2020
IT / 2016]
4. ― Exporter of jute Export of jute 0.60% tax to 1 July
goods under goods be deducted 2016 to 30
Section – 53BB at source June 2019
[SRO – 207 – AIN /

IT / 2016]

5. ― Exporter of knit Export of the 0.70% tax to 1 July,
wear, woven specified items be deducted 2017 to 30
garments, terry and goods at source June 2018
towel, carton,
accessories of
garments industry,
frozen foods,
vegetables,
leather goods,
packed food under
Section – 53BB
― Exporter of goods
(except items
specified above)
under Section –
53BBBB
[SRO – 256 – AIN / IT

/ 2017]
6. ― Exporter of knit Export of knit For company: Assessment
wear and woven wear and woven 12%; if year 2017 –
garments garments factory has 2018
internationally
[SRO – 255 – AIN / accredited
IT / 2017] Green Building
Certification:
10%
For other
assessees:
Highest rate
will be 12%
7. ― Publicly traded ship Income from 5% Till May,
building company export business 2025
registered under
Companies Act, 1994
[SRO – 132 – AIN /

IT / 2013]

8. ― Non-publicly traded Income from 10% Till May,
ship building export business 2025
company registered
under Companies
Act, 1994
[SRO – 132 – AIN /

IT / 2013]
9. ― Industries engaged Income from such 5% 12 years
in production business from
of freezer, commence-
refrigerator, ment of
motorcycle and commercial
air conditioner production
(including
production of
small parts)
[SRO – 186 – AIN /

IT / 2009; SRO – 78
– AIN / IT / 2010]
10. ― Companies defined Income arising 10% Not
in Section – 2(20) from transaction specified
of securities
[SRO – 196 – AIN / listed in any
IT / 2015] SEC approved
Stock Exchange
(excluding
Government
securities)
11. ― Private university, Income from such 15% Not
private medical institutions specified
college,
private dental
college, private
engineering
college, private
college providing
education on
information
technology
[SRO – 268 – AIN /

IT / 2010]

12. ― Autonomous public All income 25% Not
utility providers except for capital specified
gain
[SRO – 158 – AIN / IT /
2014; SRO – 211 – AIN
/ IT / 2014; SRO – 197
– AIN / IT / 2015; SRO –
207 – AIN / IT / 2017]
13. ― National level All income 15% Not
research institute specified
registered under
Trust Act, 1882 or
Societies Registra-
tion Act, 1860
[SRO – 163 – AIN /

IT / 2014]
14. ― Firms defined in Income arising 10% Not
Section – 2(32) from transaction specified
of securities
[SRO – 196 – AIN / listed in any
IT / 2015] SEC approved
Stock Exchange
(excluding
Government
securities)
15. ― Sponsor Income arising 5% Not
shareholder or from transaction specified
shareholder of securities
director of listed in any
bank, financial SEC approved
institution, Stock Exchange
merchant bank, (excluding
insurance Government
company, leasing securities)
company, portfolio
management
company, stock
dealer or stock
brokerage
company
[SRO – 196 – AIN /

IT / 2015]

16. ― Shareholder Income arising 5% Not
(except sponsor from transaction specified
shareholder or of securities
shareholder listed in any
director) having SEC approved
10% or more of Stock Exchange
shares of total (excluding
paid up capital Government
of a company / securities)
companies listed
in any stock
exchange
[SRO – 196 – AIN /

IT / 2015]
17. ― All assessee Production of ― First Tk. Not
pelleted poultry 10 lakh: specified
[SRO – 199 – AIN / feed, production of 3%
IT / 2015] pelleted feed for
cattle, shrimp and ― Next Tk.
fish, production of 20 lakh:
seeds, marketing 10%
of locally
produced seeds, ― Rest
cattle firming, of the
dairy firming, income:
frog firming, 15%
horticulture,
floriculture, silk
tree plantation,
bee keeping, silk
worm firming,
mushroom firming
18. ― All assessee Income from ― First Tk. Not
poultry 20 lakh: specified
[SRO – 254 – AIN / nil
IT / 2015] ― Next Tk.
10 lakh:
5%
― Rest
of the
income:
10%

19. ― All assessee Income from ― First Tk. Not
hatchery 10 lakh: specified
[SRO – 255 – AIN / nil
IT / 2015] ― Next Tk.
10 lakh:
5%
― Rest
of the
income:
10%
38. Tax rebate

The following table lists down the tax rebate benefit offered by the Government
to different types of assessees. It compiles the tax rebate benefit provided to
such assessees through Income Tax Ordinance, 1984 (ITO, 1984), Finance Act,
2017 and SROs issued by the Government at different times.
Sl. Assessee / Applicable Conditions Rate of Period

for rebate applicable
1. ― Non-publicly Transfer of 10% on tax In the year
traded company minimum 20% share of transfer
of paid up capital
[Finance Act, 2017] through IPO
2. ― Non-publicly Transfer of 20% 10% on tax In the year
traded mobile share of paid up of transfer
phone operator capital through
IPO
[Finance Act, 2017]
3. ― Manufacturing If commercial 20% on tax 10 years
industries operation starts from the
established in any within 1 July, 2014 starting of
area of Bangladesh – 30 June, 2019 commercial
except for the operation
areas within the
jurisdiction of any
city corporation

― Registered under If any organization 20% on tax 10 years
Companies Act, 1994 with existing from the
commercial starting of
― Not enjoying operation within commercial
tax holiday, tax the jurisdiction operation
exemption or of any city after the
reduced tax rate corporation shifting
― Not publicly area shifts the
traded company entire operation
outside the city
― Subject to corporation area
fulfilling certain within 1 July, 2014
conditions – 30 June, 2019
[SRO – 185 – AIN / If commercial 10% on tax Upto 30
IT / 2014] operation started June, 2019
before 1 July, 2014
4. ― Company donating Donation to be 10% on Not
for the purpose of made in areas expenditure specified
corporate social as specified by
responsibility the Government Maximum
in the relevant limit of
― Subject to SROs expenditure:
fulfilling certain Lower of
conditions
― 20% of
[SRO – 229 – AIN total
/ IT / 2011; SRO income
– 223 – AIN / IT /
2012; SRO – 186 – ― Tk. 12
AIN / IT / 2014] crore
5. ― Partner of a firm Partnership Average rate Not

income on partner- specified
[6th Schedule, Part ship income
– B, Para – 16]
6. ― Individual assessee If production 5% on income Not
owning cottage volume exceeds specified
industry in less 15% but does not
developed or least exceed 25% as
developed area compared with
preceding year
[Finance Act, 2017] If production 10% on in- Not
volume exceeds come specified
25% as compared
with preceding
year

7. ― Individual assessee Investments to Total income Not
be made in areas up to Tk. 10 specified
[Section – 44(2)(b), specified in Sixth lakh: 15% of
44(2)(c)] Schedule Part – the eligible
B, ITO, 1984 amount
Eligible amount
is the lowest of:
― The sum of
Total income
investments
exceeds Tk.
made as
10 lakh, up to
per Sixth
Tk. 30 lakh:
Schedule,
15% on first
Part – B
Tk. 2.5 lakh
(excluding
and 12% on
paragraph –
the rest of
15 and 16)
the eligible
― 25% of total amount
income
excluding
(i) income Total income
subject exceeds Tk.
to tax 30 lakh: 15%
exemption on the first
or reduced Tk. 2.5 lakh,
rate of tax, 12% on the
(ii) income next Tk. 5
from sources lakh and 10%
subject to on the rest of
minimum the eligible
tax as per amount
Section –
82C(a), (iii)
employer’s
contribution
to
recognized
provident
fund
(RPF), (iv)
interest on
accumulated
balance of
RPF
― Tk. 1 crore
50 lakh

39. Conditions for tax exemption for newly
established industrial undertakings and physical
infrastructure facilities
[Section – 46B, 46C]
Newly established industrial undertakings and newly established physical
infrastructure facilities (set up between 1 July, 2011 & 30 June, 2019) has to
fulfill the following conditions to enjoy the tax exemption (as stated in Point 1,
2 & 3 of Tax Exemption table ) offered –
 The industrial undertaking or physical facility has to be owned and managed
either by (a) a body corporate established by or under any law and with
head office in Bangladesh or (b) a company defined under Companies Act
1994 with registered office in Bangladesh and having a subscribed & paid
up capital of not less than Tk. 2,000,000 on the date of commencement of
 30% of the exempted income has to be invested in the said undertaking or
facility or in any new industrial undertaking or physical facility during the
period of exemption or within the following year of exemption
 10% of the exempted income has to be invested each year in the purchase
of shares of a listed company
 The industrial undertaking or physical facility cannot formed by splitting
up, reconstruction or reconstitution of an existing undertaking or facility
or transfer of machinery and plant from an existing undertaking or facility
 The industrial undertaking cannot be engaged in purchase or sale of
goods at a higher / lower price than market price with another industrial
undertaking or company having common sponsor directors
 The income, profits and gains of the industrial undertaking or physical
facility will be computed in the same manner applicable for income from
business or profession. Such income, profits and gains will be computed
separately from other income, profits and gains. Any loss sustained will be
carried forward to be set-off against income, profits and gains of the same
industrial undertaking or physical facility
 The industrial undertaking or physical facility has to obtain approval for
such tax exemption in the prescribed manner
40. Investment allowances eligible for tax credit

[Sixth Schedule, Part – B]
The following table summarizes the areas, investment in which will be eligible
for tax credit as per Sixth Schedule, Part – B.

Sl. Particulars Reference
1. Life insurance premium paid by an individual for insurance Para - 1
for the life of self, spouse or a minor child up to 10% of
actual sum assured
2. Life insurance premium paid by a Hindu undivided family Para - 2
for the life of a male member or his wife
3. Contribution deducted from salary paid by Government to Para - 3
secure deferred annuity or provision for wife or children
4. Contribution to provident fund under Provident Fund Act, 1925 Para - 4
5. Employer’s and employee’s contribution to a recognized Para - 5
provident fund
6. Annual contribution to approved superannuation fund Para - 6
7. Investment in Board approved Para - 10
― Savings certificate and instrument
― Unit certificates and mutual fund certificates issued by
any financial institution or ICB and its subsidiaries
― Government securities
― Shares of investment companies
Not applicable for company
8. Deposit pension scheme up to Tk. 60,000 Para - 11
9. Donation to a charitable hospital, subject to certain conditions Para – 11A
10. Donation to a charitable organization set up for welfare of Para – 11B
retarded people, subject to certain conditions
11. Zakat paid to Zakat Fund; donation or contribution to Para – 13
a charitable fund established by or under Zakat Fund
Ordinance, 1982
12. Sum paid to benevolent fund or premium paid to group Para – 17
insurance scheme
13. Donation to any socio-economic or cultural development Para - 21
institution established by Aga Khan Development Network
14. Donation to Government approved philanthropic or Para - 22
educational institution
15. Sum invested by an individual for purchase of one Para – 23
computer or one laptop
16. Donation to a national level institution set-up in memory Para – 24
of liberation war
17. Donation to a national level institution set-up in memory Para – 25
of the Father of the Nation

Sl. Particulars Reference
18. Sum invested by an individual in acquisition of any stocks Para – 27
or shares of a company, mutual fund or debenture listed
with any stock exchange
19. Sum invested by an individual for purchase of Bangladesh Para - 28
Government Treasury Bond
41. CSR activities eligible for tax credit

[SRO – 229 – AIN / IT / 2011, SRO – 223 – AIN / IT / 2012, SRO – 186 – AIN / IT / 2014]
The CSR activities for which a company may avail tax rebate facilities are
donations made to the cases listed below –
 Government organizations for aid of people affected by natural disaster
 Institutions engaged in establishment and maintenance of old home
 Social institutions engaged in the welfare of mentally or physically disabled
people
 Organizations engaged in educating street children
 Organizations engaged in projects on accommodation for the slum dwellers
 Social institutions engaged in campaign for women rights and against
dowry system
 Institutions engaged in maintenance and rehabilitation of orphan / rootless
children
 Institutions engaged in research on liberation war, expansion of the
consciousness of independence war and the act of honorable living of the
freedom fighters
 Institutions engaged in sanitation and sewerage work at Chittagong Hill
Districts, char areas and areas surrounding breaking up of banks of river
 Institutions engaged in medicating cleft leap, cataract, cancer and leprosy
 Persons or institutions engaged in treatment of acid affected people
 Specialized hospitals [like cancer hospital, lever hospital, kidney hospital,
thalassemia hospital, eye hospital and cardiology hospital] for free
treatment to poor patients
 Public universities
 Government approved educational institutions for giving stipend to
insolvent meritorious freedom fighters’ children with a view to providing
technical or vocational education to them
 Educational institutions (Government run / private institutions under MPO)
for improving computer lab and English education

 Organizations engaged in providing technical and vocational training to
unskilled or semi-skilled labor for export of human resources
 National sports institutions engaged in the development of infrastructure
and training at national level
 National level museums for conserving the memories of the liberation war
 National level organizations engaged in the conservation of the memories
of the Father of the Nation
 Social welfare organizations, NGO or not for profit organizations engaged
in awareness, treatment or rehabilitation for HIV, AIDS and drug addiction
 Social welfare organizations, NGO or not for profit organizations engaged
in rehabilitation for children or women rescued from overseas trafficking
 Government approved funds for national disaster or tournament or national
carnival
A company cannot charge such CSR expenditure as expense in the profit or loss
account. Moreover has to fulfil the following conditions to claim rebate against
the above mentioned CSR activities –
 Must pay salaries and allowances to its employees regularly and must have
waste treatment plant if it is involved with the production of industrial
goods
 Must pay income tax, VAT and duty timely and must repay institutional
loans
 Can only donate money to the institutions recognized by the Government
for the purpose of CSR
 Must fulfil all rules as per Bangladesh Labour Act, 2006
 Must pay the donations through banking channel
42. Special tax treatment

[Section – 19BBBBB, 19C]
Special tax treatment benefit has been given to persons who have income with
unexplained source. If such persons invest in the following areas and pay tax at
certain rates before the assessment of the relevant year, the source of invested
amount would be deemed explained.
 Investment in residential building and apartment [Section – 19BBBBB]
 Investment in purchase of bond under Bangladesh Infrastructure Finance
Fund [Section – 19C]

43. Avoidance of double taxation
[Section – 144, 145]
The Government of Bangladesh may enter into an agreement with the Government
of other countries for the avoidance of double taxation and prevention of fiscal
evasion with respect to taxes on income leviable under the ITO, 1984 and also
under corresponding law of such other countries. Under the DTA agreement,
each dominion determines the total income of an assessee in the ordinary way
under its own laws. However each country is entitled to retain tax in respect
of the source of income or categories of transactions which are specified in the
agreement, at the rates embodied in the agreement.
At present, Government of Bangladesh has entered into agreement for the
avoidance of double taxation with the following 34 countries –
Belarus Belgium Canada China

Denmark France Germany India
Indonesia Italy Japan Kuwait
Malaysia Mauritius Myanmar Netherlands
Norway Oman Pakistan Philippines
Poland Romania Saudi Arabia Singapore
South Korea Sri Lanka Sweden Switzerland
Thailand Turkey UAE UK
USA Vietnam

TRANSFER
PRICING
44. Transfer pricing

[Section – 107A – 107J; Rule – 70 - 73, 75, 75A]
Transfer pricing is increasingly influencing significant changes in tax legislation
around the world. Transfer pricing refers to the prices charged between related
parties in different tax jurisdictions for goods, services, assets, and the right to
use intangibles, interest, guarantee fees and factoring fees. Transfer prices must
be determined following the arm’s length principle which requires that the pricing
and the related terms and conditions set between associated entities should be
consistent to the prices and terms and conditions that would have been charged if
the goods / services had been provided / received from an independent party. If
the transfer prices are set in a manner that is inconsistent with the arm’s length
principle, tax authorities raise the concerns of the possibility of profit shifting.
In Bangladesh regulations of transfer pricing have been enacted from the Fiscal
Year 2012-2013.
44.1 Computation of arm’s length price

[Section - 107C; Rule - 70]
The arm’s length price in relation to international transactions will be
determined by applying any of the following method –
 Comparable uncontrolled price method
Price charged in an international transaction is compared with
price in an uncontrolled transaction. Then the price of the
international transaction is adjusted by the differential amount
to get arm’s length price.
 Resale price method
Normal gross margin is subtracted from the price that would
have been obtained from an independent enterprise. Then
adjustments are made for unique costs (such as customs duty),
functions performed, risks involved, assets employed, time gap,
accounting practices etc. to the price of international transaction
to determine the arm’s length price.

 Cost plus method
Cost base for the international transaction is determined
considering the direct and indirect costs incurred. Then
comparable profit mark-up is adjusted for the functions
performed, risks involved, assets employed, time gap, accounting
practices etc. The adjusted profit mark-up is then added to the
cost base to determine the arm’s length price.
 Profit split method
Each of the associated enterprise is allocated a basic return based
on the basic functions performed by them and in reference with
the market returns earned by independent enterprise in similar
transactions. The residual profit (attributable to the unique
assets) is calculated by deducting the sum of the basic returns
from the combined profit. Such residual profit is allocated to the
associated enterprises based on their relative contribution. The
combined profit allocated in this way is considered the arm’s
length price.
 Transactional net margin method
Net profit margin applicable for both associated enterprises
and independent enterprises is computed in respect of the
international transaction. Then appropriate adjustment is made
to the net profit margin applicable to the independent enterprise
for material differences. The adjusted net profit margin is then
applied to the appropriate bases (cost, sales, assets) of the
associated enterprises to arrive at the arm’s length price.
 Other appropriate method
If none of the above methods can be reasonably applied, any
other appropriate method may be used which yields consistent
result with the arm’s length price.
44.2 Maintenance and keeping of information, documents

and records
[Section - 107E; Rule - 73]
Every person who enters into international transactions exceeding
aggregate value of Tk. 3 crore in the income year has to keep and maintain
the following information, documents and records –
 Ownership profile of the group; business profile of the group, each
member of the group, assessee enterprise and each associated
enterprise operating in Bangladesh
 Information on the business relationship among the members of
the group

 Relevant information regarding the assessee and associated
enterprises such as functions performed, risks assumed, assets
employed, economic and market analysis, forecasts, budgets etc.
 Consolidated financial statements of the group; financial
statements of the assessee and the associated enterprises
operating in Bangladesh; segment financial statements regarding
the transactions with the associated enterprises
 Details of all transaction with the associated enterprises
 Manner of choosing tested party, rationale for such choice; details
of comparables, manner of comparisons, details of comparability
analysis; list of database utilized
 Relevant information regarding transfer pricing such as method
chosen, calculations, workings, assumptions, policies, price
negotiations, adjustments made, etc.
44.3 Submission of statement of international transaction

[Section - 107EE; Rule - 75A]
Every person entering into an international transaction has to furnish a
statement of international transactions along with the return of income.
44.4 Report from an accountant to be furnished

[Section - 107F; Rule - 75]
The DCT may require a person who has entered into international
transactions during an income year with aggregate value exceeding Tk.
3 crore to furnish a report from a Chartered Accountant or a Cost and
Management Accountant regarding the information, documents or records
of such transactions.

44.5 Procedure from record keeping to submission of return
Person enters into international transactions with an

associated enterprise
Maintains information, documents and records of such

transactions in prescribed manner
Yes Such No
transactions
are at arm’s
length basis
Calculates adjustments for the transfer price

with regard to the arm’s length price basis
Submits
(a) Statement of international transactions and
(b) Report from a Chartered Accountant / Cost and Management
Accountant (if required by DCT, where the aggregate value of
international transaction exceeds Tk. 3 crore)
Submits return of income

44.6 Assessment procedure
DCT receives the return of income, statement of

international transactions, other relevant documents
DCT reviews whether

― Price charged / paid in international transaction has been
determined in accordance with the arm’s length price
― Information, documents or records have been maintained
as prescribed
― Information / data used in calculation is reliable or correct
Such transactions are at

arm’s length basis
Yes No
No adjustment to the
transfer price required ― DCT determines the arm’s
length price in accordance
with the provisions of the
Ordinance; or
― DCT refers the
DCT computes the
determination of arm’s
total income of the
length price to the Transfer
assessee considering
Pricing Officer (TPO)
the arm’s length price
determined

OFFENCES, PENALTIES
& PUNISHMENTS
45. Offences, penalties & punishments

The following table summarizes the various offences and related penalties and
punishments under ITO, 1984.
Sl. Offences Penalties & punishments Reference

1. Failure to deduct / collect 2% per month of the amount Sec - 57
tax at source of tax required to be
deducted or collected
Maximum period of penalty:
24 months
2. Deduction or collection of 2% per month of the amount Sec - 57
tax at source at a lesser rate of shortfall
or in lesser amount
24 months
3. Failure to pay deducted or 2% per month of the amount Sec - 57
collected amount of tax at or part of it which has not
source or part of it to the been paid to the credit of
credit of the Government the Government
24 months
4. Issuance of certificate of The required amount of Sec-57A
tax deduction or collection deduction or collection
without actual deduction or
collection or payment to the
Government
5. Sum of advance tax paid and 10% simple interest on the Sec – 73
tax deducted or collected such shortfall
at source is less than 75% of
tax determined on regular 15% simple interest on the
assessment such shortfall, if return is
submitted after the tax day
24 months

6. Failure to file return of 2% delay interest per Sec – 73A
income on or before the tax month on the difference
day between the tax assessed
and the sums of advance tax
paid and tax deducted or
collected at source
1 year
7. Failure to give notice to Maximum: the amount of tax Sec –
the DCT regarding the subsequently assessed 89(3)
discontinuance of business
8. Failure to keep, maintain Maximum: 1% percent of the Sec -
or furnish information, value of each international 107G
documents or records to the transaction
DCT as per Section – 107E
9. Failure to comply with the notice Maximum: 1% percent of the Sec -
or requisition under Section – value of each international 107H
107C regarding computation of transaction
arm’s length price
10. Failure to submit statement Maximum: 2% of the value Sec -
of international transactions of each international 107HH
under Section - 107EE transaction
11. Failure to furnish report from a Maximum: Tk. 300,000 Sec - 107I
Chartered Accountant or a Cost
and Management Accountant
under Section – 107F
12. Failure to maintain accounts Maximum: 1.5 times of tax Sec – 123
in the prescribed manner as liability
per Section – 35(2) (assessee
does not have income from Maximum: Tk. 100, where
house property) the total income does
not exceed the maximum
amount on which tax is not
chargeable
13. Failure to maintain accounts Higher of (a) 50% of taxes Sec – 123
in the prescribed manner as payable on house property
per Section – 35(2) (assessee income or (b) Tk. 5,000
has income from house
property)

14. Failure to file return under Higher of (a) 10% of last Sec – 124
Section - 75,77, 89(2), 91(3), assessed tax or (b) Tk. 1,000
93(1), 75A
For continuing default: Tk.
50 per day
Provided that maximum
penalty for an individual
assessee not previously
assessed: Tk. 5,000
Maximum penalty for
an individual assessee
previously assessed: Higher
of (a) 50% of last assessed
tax or (b) Tk. 1,000
15. Failure to furnish certificate, Tk. 500 Sec – 124
statement, accounts,
information or TIN For continuing default: Tk.
certificate required under 250 per month
Section - 58, 108, 109, 110
and 184C
16. Failure to furnish Tk. 25,000 Sec – 124
information required under
Section – 113 For continuing default: Tk.
500 per day
17. Use of fake TIN or TIN of Maximum: Tk.20,000 Sec –
another person 124A
18. Failure to obtain TIN while Maximum: Tk. 200,000 Sec –

processing application, 124AA
nomination; approving
license, certificate,
membership, permission,
admission, agency,
distributorship; sanctioning
loan; issuing credit card;
allowing connection;
executing registration;
making payment as required
by Section – 184A(5)
19. Failure to verify the Maximum: Tk. 50,000 Sec –
authenticity of the TIN 124AA
furnished as required by
Section – 184A(6)
20. Failure to pay advance tax Maximum: the amount of Sec – 125
shortfall

21. Non-compliance with any Maximum: the amount of tax Sec – 126
notice under Section – 79,80, liability
83(1) and 83(2)
22. Failure to pay tax on the basis Maximum: 25% of amount of Sec – 127
of return under Section – 74 unpaid tax
23. Concealment of income 15% of the tax evasion Sec – 128
If concealment detected
after 1 year: additional 15%
for each preceding year
24. Audit report not certified by Minimum: Tk. 50,000 Sec –
a Chartered Accountant that 129A
accounts are prepared and Maximum: Tk. 200,000
reported in accordance with
BFRS and BAS
Incorrect or false audit
report by Chartered
Accountant
25. Furnishing fake audit report Tk. 100,000 Sec –
129B
26. Default in payment of tax Maximum: amount of arrear tax Sec – 137
27. Non-compliance with certain Imprisonment up to 1 year or Sec – 164
obligations under Section - 164 fine or both
28. False statement in Imprisonment of 3 months to Sec – 165
verification 3 years or fine or both
29. Use of fake TIN or TIN of Imprisonment up to 3 years or Sec –
another person fine up to Tk. 50,000 or both 165A
30. Furnishing fake audit report Imprisonment of 3 months Sec –
to 3 years or fine up to Tk. 165AA
100,000 or both
31. Obstruction of income tax Imprisonment up to 1 year or Sec –
authority fine or both 165B
32. Unauthorized employment of Imprisonment of 3 months Sec –
a non-Bangladeshi citizen to 3 years or fine up to Tk. 165C
500,000 or both
33. Concealment of income Imprisonment of 3 months to Sec – 166
5 years or fine or both
34. Disposal of property to Imprisonment up to 5 years Sec – 167
prevent attachment or fine or both
35. Disclosure of protected Imprisonment up to 6 Sec – 168
information months or fine or both

SUMMARY OF VALUE
ADDED TAX


46. Taxes imposed under VAT Act, 1991
Three different types of taxes are imposed under the provisions of the Value
Added Tax Act, 1991.
 Value Added Tax at 15% on value addition, to be paid by importers,

manufacturers, and service providers having turnover of more than Tk. 80
lakh. [Section – 3]
 Turnover Tax at 3% to be paid by persons and organizations having turnover
amount not exceeding Tk. 80 lakh and who is not required to be registered
for VAT under Section - 15. [Section – 8; Rule – 4]
 Supplementary Duty at different rates ranging from 10% to 500% per cent
on luxurious, non-essential and socially undesirable goods. [Section – 7]
47. Goods and services chargeable to VAT

[Section - 3]
According to the Section - 3(1) of the Value Added Tax Act, 1991, 15% VAT is
imposed on following goods and services –
 All goods imported or supplied in Bangladesh, except for those stated in
the First Schedule of the VAT Act, 1991
 All services provided or imported in Bangladesh, except for those stated in
the Second Schedule of the VAT Act, 1991
However zero rate tax will be imposed on following goods and services –
 Any goods or services exported or deemed to have been exported from
Bangladesh
 Food and other things supplied in accordance with Section - 24 of the
Customs Act, 1969 to any transport leaving Bangladesh, for consumption in
the transport outside Bangladesh
Provided that provisions of zero rate tax will not be applicable in the following cases –
 Any goods intended to be re-imported into Bangladesh
 Goods that have been presented for export in accordance with Section -
131 of the Customs Act, 1969 but have not been exported within 30 days
of submission of the bill of export or such extended time(if any) allowed
by the Commissioner
48. Persons responsible to pay VAT

[Section – 3]
According to Section - 3(3) of the Value Added Tax Act, 1991, the following
persons / entities are responsible to pay VAT –
 In the case of imported goods, the importer of the goods imported at import stage

 In the case of goods manufactured or produced in Bangladesh, the supplier
at production or manufacturing stage
 In the case of services, the provider of services
 In the case of service provided from outside the territory of Bangladesh,
service receiver
 In other cases, the supplier and the receiver of service
49. VAT deduction at source

[Rule – 18A]
Following persons are responsible to deduct VAT at source –
 Government organization
 Semi-government organization
 Autonomous organization
 NGO
 Bank
 Insurance
 Financial institutions
 Limited company
 Educational institutions
 Any enterprise having annual turnover of more than Tk. 1 crore
50. Deposit of deducted VAT

Deducted VAT amount will have to be deposited to government exchequer with
following area code –
Commissionerate Treasury challan Commissionerate Treasury challan

areas financial code areas financial code
Large Tax-payer 1/1133/0006/0311 Comilla 1/1133/0040/0311
Unit LTU)
Dhaka (North) 1/1133/0015/0311 Sylhet 1/1133/0018/0311
Dhaka (South) 1/1133/0010/0311 Rajshahi 1/1133/0020/0311
Dhaka (East) 1/1133/0030/0311 Rangpur 1/1133/0045/0311
Dhaka (West) 1/1133/0035/0311 Jessore 1/1133/0005/0311
Chittagong 1/1133/0025/0311 Khulna 1/1133/0001/0311

51. Scope of VAT and specified rates
The following table summarizes applicable VAT rates on various services along
with areas where VAT Deduction at Sources (VDS) are applicable –
Sl. Head Service Service provider Rate Applicability

no. code of of VDS
VAT
1. S 001 S 001.10 Hotels including club 15% N/A
2. S 001.20 Restaurant (including club) 15% N/A
with air condition
3. Restaurant (including club) 7.5% N/A
without air condition
4. S 002 S 002.00 Decorators and caterers 15% VDS Applicable
5. S 003 S 003.10 Motor garage & workshop 10% VDS Applicable
6. S 003.20 Dockyard 10% VDS Applicable
7. S 004 S 004.00 Construction works / firms 6% VDS Applicable
(Builders)
8. S 005 S 005.10 Warehouse 15% N/A
9. S 005.20 Port for import or export 15% N/A
10. S 007 S 007.00 Advertisement firm 15% VDS Applicable
11. S 008 S 008.10 Printing press 15% VDS Applicable
12. S 009 S 009.00 Auction firm 15% VDS Applicable
13. S 010 S 010.10 Land development 3% VDS Applicable
organization
14. S 010.20 Building construction VDS Applicable
organization
― 1-1,100 sq. feet 1.5%
― 1,101-1,600 sq. feet 2.5%
― Over 1,600 sq. feet 4.5%
15. S 011 S 011.10 Video cassette shop 15% N/A
16. S 011.20 Video games shop 15% N/A
17. S 011.30 Video, audio recording shop 15% N/A
18. S 011.40 Video and audio CD rent 15% N/A
provider shop
19. S 012 S 012.10 Telephone service provider 15% N/A
20. S 012.11 Tele-printer service provider 15% N/A
21. S 012.12 Telex service provider 15% N/A

no. code of of VDS
VAT
22. S 012.13 Fax service provider 15% N/A
23. S 012.14 Internet service provider 15% N/A
24. S 012.20 Sim card distributors 15% N/A
25. S 013 S 013.00 Automated laundry 15% N/A
26. S 014 S 014.00 Indenting service firm 15% VDS Applicable
27. S 015 S 015.10 Freight forwarders 15% N/A
28. S 015.20 Clearing and forwarding agent 15% N/A
29. S 017 S 017.00 Community center 15% N/A
30. S 018 S 018.00 Film studio 15% N/A
31. S 020 S 020.00 Survey firm 15% VDS Applicable
32. S 021 S 021.00 Plants or capital 15% VDS Applicable
machineries rental firm
33. S 022 S 022.00 Sweet shop 15% N/A
34. S 023 S 023.10 Cinema hall or film distributor 15% N/A
35. S 023.20 Film producer 15% N/A
36. S 024 S 024.00 Sales center of furniture - 6% VDS Applicable
At the time of production
37. Sales center of furniture - 4% VDS Applicable
At the time of marketing
subject to treasury challan
for 6% at production stage
38. S 025 S 025.00 WASA 15% N/A
39. S 026 S 026.00 Goldsmith, silversmith and 5% N/A
gold & silver trader
40. S 027 S 027.00 Insurance company 15% N/A
41. S 028 S 028.00 Courier & express mail service 15% VDS Applicable
42. S 030 S 030.00 Beauty parlor 15% N/A
43. S 031 S 031.00 Repairing or servicing of 15% VDS Applicable
taxable goods
44. S 032 S 032.00 Consultancy firm and 15% VDS Applicable
supervisory firm
45. S 033 S 033.00 Lessor 15% VDS Applicable
46. S 034 S 034.00 Audit and accounting firm 15% VDS Applicable
47. S 035 S 035.00 Shipping agent 15% N/A

no. code of of VDS
VAT
48. S 036 S 036.10 Air-conditioned bus service 15% N/A
49. S 036.20 Air-conditioned launch service 15% N/A
50. S 036.30 Air-conditioned railway service 15% N/A
51. S 037 S 037.00 Procurement provider 5% VDS Applicable
52. S 038 S 038.00 Organizer of cultural program 15% N/A
with foreign performers
53. S 039 S 039.10 Satellite cable operators 15% N/A
54. S 039.20 Satellite channel distributors 15% N/A
55. S 040 S 040.00 Security service provider 15% VDS Applicable
56. S 042 S 042.00 Automated saw-machine 15% N/A
57. S 045 S 045.00 Legal advisors 15% VDS Applicable
58. S 046 S 046.00 Health club and fitness center 15% N/A
59. S 047 S 047.00 Sports organizer 15% N/A
60. S 048 S 048.00 Transport contractor - For 4.5% VDS Applicable
carrying petrol and related
goods
61. Transport contractor - 10% VDS Applicable
Others goods
62. S 049 S 049.00 Transport fare or rent-a-car 15% VDS Applicable
63. S 050 S 050.10 Architect, interior designer 15% VDS Applicable
or interior decorator
64. S 050.20 Graphics designer 15% VDS Applicable
65. S 051 S 051.00 Engineering firms 15% VDS Applicable
66. S 052 S 052.00 Sound and lighting 15% VDS Applicable
instruments rent providers
67. S 053 S 053.00 Presence at board meeting 15% VDS Applicable
68. S 054 S 054.00 Advertisement through 15% VDS Applicable
satellite channel
69. S 056 S 056.00 Banking and non-banking 15% N/A
service provider
70. S 057 S 057.00 Electricity supplier 5% N/A
71. S 058 S 058.00 Chartered airplane or 15% VDS Applicable
helicopter rental firm
72. S 059 S 059.00 Glass sheet manufacturer 15% N/A

no. code of of VDS
VAT
73. S 060 S 060.00 Buyer of auctioned goods 4% VDS Applicable
74. S 061 S 061.00 Credit card supplying 15% N/A
organization
75. S 062 S 062.00 Money changer 15% N/A
76. S 063 S 063.00 Air conditioned tailoring shop 15% N/A
77. S 064 S 064.10 Amusement and theme park 15% N/A
78. S 064.20 Picnic spot and shooting spot 15% N/A
79. S 065 S 065.00 House, floor & space cleaning 15% VDS Applicable
and maintenance organization
80. S 066 S 066.00 Lottery ticket seller 15% VDS Applicable
81. S 067 S 067.00 Immigration advisor 15% N/A
82. S 068 S 068.00 Coaching center 15% N/A
83. S 069 S 069.00 English medium school 7.5% N/A
84. S 071 S 071.00 Event management 15% VDS Applicable
85. S 072 S 072.00 Human resource providers 15% VDS Applicable
86. S 074 S 074.00 Rent of office space 15% N/A
or building used for
commercial purpose
87. S 076 S 076.00 Social and sports related club 15% N/A
88. S 078 S 078.00 Sales center of RMG of own 4% N/A
brand
89. S 099 S 099.00 Any service not specified under 15% N/A
SRO – 168 -AIN/2013/672 -
Mushak dated 06 June 2013,
Second Schedule and Section
- 14 of VAT Act, 1991 will be
taxed under this code
90. S 099.10 Information technology 4.5% VDS Applicable
enabled services
91. S 099.20 Other services 15% VDS Applicable
92. S 099.30 Sponsorship services 15% VDS Applicable
93. S 099.60 Credit rating agency 15% VDS Applicable
94. SRO – 124 – AIN Advance Trade VAT (ATV) 4% N/A
/ 2015 / 730 -
Mushak dated 04
June, 2015

SUMMARY OF
GIFT TAX

“It’s not our speciality. It’s theirs.”
BDO Business Services and Outsourcing

52. Gift tax
As per Section – 3 of the Gift Tax Act, 1990, gift tax is leviable on gifts made
in any financial year on and from 1 July 1990 at the rates prescribed in the
schedule. As per Section – 2(f), Gift means the transfer of any existing immovable
or moveable property by one person to another, made voluntarily and without
consideration of any money or money’s worth.
The value of property under gift (other than cash) will be the value which, in the
opinion of the Deputy Commissioner of Taxes, the property would fetch if sold
in the open market on the date of gift. When a property is not saleable in the
open market and such value cannot be determined, its value will be determined
according to the rules prescribed for the purpose. Methods of valuation of gift
have been provided in the Section - 5 of the Gift Tax Act, 1990.
As per Section – 20, provisions of the Gift Tax Act, 1990 will not be applicable for
gifts made by following persons –
 A body corporate established or constituted by or under any law
 Any institution or fund whose income is exempt from income tax under
Sixth Schedule, Part – A, Para – 1 &2 of the Income Tax Ordinance, 1984
53. Exemption from gift tax

[Section – 4]
As per Section – 4 of the Gift Tax Act, 1990, gift tax will not be charged in respect
of the following gifts made by any person –
 Gift of property situated outside Bangladesh
 Gift to the Government or any local authority
 Gift to the following funds or institutions for charitable purpose –
― Any university established under the law in force in Bangladesh
or any educational institution including polytechnic institute
recognized by the Education Board or recognized or run by the
Government
― Any hospital recognized or run by the Government or any local
authority or any hospital aided by the Government or any local
authority
― Any flood or disaster management fund established or approved by
the Government
― Such institutions or funds for religious or charitable purposes
(except for private religious institution or fund which does not
ensure benefit of the public) which are established in Bangladesh
and approved by the Government for such purposes, or any
institution established for religious or charitable purposes and
registered under any law for the time being in force: up to 20% of

the total income determined for the concerned year or Tk. 100,000
whichever is less
 Gift to the dependent relative up to Tk. 20,000 on the occasion of his /
her marriage
 Gift by way of payment for insurance policy or annuity for any person (other
than spouse) dependent upon him / her for support and maintenance up
to Tk. 20,000
 Gift under a will
 Gift under contemplation of death
 Gift to sons, daughters, father, mother, spouse, brothers and sisters
In addition to the above exemptions, gifts made in any financial year up to the
value of Tk. 20,000 are exempt from gift tax. The Government may by notification
exempt any class of gift or any class of person from gift tax.
54. Rates of gift tax

[Section - 3]
Gift tax is imposed at a 4 tier progressive rate. The values of taxable gift with
corresponding gift tax rates are quoted below –
Value of gift Rate of gift tax

On the first Tk. 500,000 of the value of all taxable gifts 5%
On the next Tk. 1,000,000 of the value of all taxable gifts 10%
On the next Tk. 2,000,000 of the value of all taxable gifts 15%
On the balance of the value of all taxable gifts 20%
55. Return of gift tax

[Section - 7]
Every person who has made any taxable gift during any financial year of an
amount that makes him / her liable to gift tax under the Gift Tax Act, 1990, has
to file a return to the Deputy Commissioner of Taxes before 15 September of
the corresponding assessment year in the prescribed form and in the prescribed
manner. Tax on the basis of the return is payable on or before the date on which
such return is furnished.

BREADTH OF EXPERIENCE
BDO Bangladesh delivers a breadth of integrated services tailored to meet our clients' needs. When our
clients explain their challenges, BDO professionals stop and listen. We use that information combined with
our deep industry and technical experience to develop a tailored service plan through a unified team.
BDO BANGLADESH’S MAJOR SERVICE AREAS

Total Payroll Management HR Management
• Monthly payroll processing • Staffing support services
• Payroll tax computation & deduction • Payroll & benefit management of outsourced
• Salary advice / Transfer of salary employees
• Online pay slip and tax computation • Head-hunting and recruitment
• Deposit of monthly deducted tax • Employment advisory
• Provide monthly payroll statement to uploading data to
accounting system Training and Capacity Building
• Submission of quarterly tax return • Training on IT system audits
• Issue of annual salary certificate • Trainings on accounting, tax & VAT
• Annual return of employees’ tax • Training need assessment
• Annual perquisites statement • Development of training module
• Helpline support
Book-keeping & Accounting
Provident Fund Accounting & Administration • Regular book-keeping & accounting
• Accounting of employees’ provident fund • Monthly financial reporting
• Allocation of profit on monthly basis • Claim / payment validation
• Monthly financial reporting of PF • Bank and account reconciliations
• Investment advisory • Transaction processing support
• Investment monitoring • Outsourced financial services
• Formation and implementation of PF Trust • Stock audits and reconciliations
• Obtaining recognition of PF Trust from NBR • Payment processing
• Settlement of employees‘ PF account
Company Secretarial
Business Start-up • Maintenance of statutory Books
• Establishment of Liaison Office, Branch Office and • Drafting of minutes of Board Meetings, AGM
and EGM
Limited Liability Company (100% foreign shareholdings • Allotment of shares
or JV), Artificial Legal Entity • Submission of returns
• Statutory compliance for companies
• Processing of expatriates’ work permit Advisory & Consulting
• Assistance in sourcing & providing • Financial reviews
logistics support for initial business start-up • Due diligence reviews
• Investigation and forensic accounting
Taxation • Valuation and acquisition
• Liquidation of companies
• Corporate tax advisory and assessment
• Fixed assets management: verification,
• VAT advisory services reconciliation and tagging of numbers
• Expatriate employees’ tax planning • HR systems compliance audits
• Expatriate employees’ tax return & assessments • Payroll management audits
• Local employees’ tax planning • Social compliance audits
• Local employees’ tax return • IT / IS audits
& assessments • Review, assessment and development of
Bangladesh Tax Handbook 2017 – 2018 internal control structure137
for effective
| Page
corporate governance practices
WHY BDO Bangladesh
BDO Bangladesh is committed to exceptional client
service delivered through long-term, responsive
relationships. It's our people, the knowledge they
bring to engagements, their commitment to service,
and open communications that have made BDO the
distinct choice of all types and sizes of organizations.
A Unique Combination
• Personal involvement and the attentiveness of a For further information please contact:
trusted advisor
• Deep resources of an established national and Business Consulting Services
international network Consulting BPO Services
• Local distinctiveness and client relationships
Business Consulting Services, a Bangladeshi
Right Size and Experience registered partnership firm, is a member of
BDO International Limited, a UK company
• Streamlined, accessible organizational structure limited by guarantee, and forms part of the
• Fewer conflicts and hierarchies than those inherent international BDO network of independent
in larger firms member firms.
BDO is the brand name for the BDO network
Active Involvement of Senior Professionals and for each of the BDO Member Firms.
• Excellent staff-to-partner ratio
• Access to experienced national and international, Corporate Office
Vertex Prominent (1st Floor)
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Dhaka - 1212, Bangladeesh
Proactive, Ongoing Involvement
• Swift responsiveness and personalized, Registered Office
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integrated service delivery KA – 90 Pragoti Saroni (Bishwa Road)
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The BDO Difference Contact us

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our attitude and approach to them that makes us
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BDO IS THE LEADER FOR

EXCEPTIONAL CLIENT SERVICE

BDO International Limited is a UK company limited by guarantee. It is the governing entity

For further information and assistance or Business Consulting Services

All rights reserved

SUMMARY OF INCOME TAX...................................................................... 17

TAX RATE STRUCTURE........................................................................... 41

Bangladesh Tax Handbook 2017 – 2018

FILING OF RETURN & PAYMENT OF TAX...................................................... 66

Bangladesh Tax Handbook 2017 – 2018

OFFENCES, PENALTIES & PUNISHMENTS....................................................121

SUMMARY OF VALUE ADDED TAX.............................................................125

SUMMARY OF GIFT TAX.........................................................................133

Bangladesh Tax Handbook 2017 – 2018

Bangladesh Tax Handbook 2017 – 2018 1 | Page

Bangladesh Tax Handbook 2017 – 2018 2 | Page

Assessment Year: 2017 - 2018 Assessment Year: 2016 – 2017

Income Rate Income Rate

Bangladesh Tax Handbook 2017 – 2018 3 | Page

Income Rate Income Rate

1.2 Surcharge on individual assessee [Finance Act, 2017]

1.3 Corporate tax rate [Finance Act, 2017]

1.4 Definitions [Section – 2]

Bangladesh Tax Handbook 2017 – 2018 4 | Page

1.6 Salary paid to employees failing to file return of income [Section –

1.7 Overseas travelling expenditure for services provided to the

Bangladesh Tax Handbook 2017 – 2018 5 | Page

1.9 Deduction at source from payment to contractors, etc. [Section – 52;

1.10 Deduction at source from payment of certain services [Section 52AA]

Bangladesh Tax Handbook 2017 – 2018 6 | Page

1.11 Deduction of tax at source from receipts in respect of international

1.12 Deduction or collection at source from commission, discount or fees

1.13 Deduction from income of non-residents [Section - 56]

1.15 Return of income [Section – 75]

Bangladesh Tax Handbook 2017 – 2018 7 | Page

1.16 Production of accounts and documents [Section – 79]

1.17 Statements of assets, liabilities and lifestyle [Section – 80]

1.18 Universal self-assessment [Section – 82BB]

1.19 Minimum tax [Section – 82C]

Bangladesh Tax Handbook 2017 – 2018 8 | Page

1.20 Tax, etc. escaping payment [Section – 93]

1.21 Limitation for assessment [Section – 94]

1.22 Liability to tax in case of shipping business of non-resident [Section – 102]

1.23 Penalty for failure to verify Taxpayer’s Identification number, etc.

Bangladesh Tax Handbook 2017 – 2018 9 | Page

1.24 Revision of penalty based on revised amount of income [Section – 133A]

1.25 Correction of errors [Section – 173]

1.26 Requirement of twelve-digit Taxpayer’s Identification Number in

Bangladesh Tax Handbook 2017 – 2018 10 | Page

1.28 Sixth Schedule - Part A: Exclusions from total income

Bangladesh Tax Handbook 2017 – 2018 11 | Page

1.29 Deduction of tax from payment to contractors etc. [Rule - 16]

Base amount Rate of deduction

Tax to be deducted in certain cases has been specified as below -

Payments made to Rate of

1.30 Collection of tax from importers [Rule – 17A]

Bangladesh Tax Handbook 2017 – 2018 12 | Page

Bangladesh Tax Handbook 2017 – 2018 13 | Page

1.35 Tax exemption for Bangladesh Securities and Exchange Commission

1.36 Reduced rate of tax on Bangladesh Economic Zone Authority [SRO –

Bangladesh Tax Handbook 2017 – 2018 14 | Page

2.2 VDS on certain services

2.3 Exemption from VAT