Tax Planning in Business: Bangladesh Perspective
21 Pages Posted: 5 Jun 2007
Swapan Kumar Bala
University of Dhaka
Date Written: May 18, 2007
This paper highlights the tax planning issues in the context of business environment in Bangladesh. Given the complexity and the tax law ambiguity prevailing in Bangladesh, this paper encompasses the traditional tax planning devices along with a brief overview of the Scholes-Wolfson paradigm of tax planning strategies. The fiscal plans are referred to the related tax law provisions (mentioned in the appendices in a very organized manner), which are expected to be very useful for the existing and potential businessmen.
Keywords: Tax compliance, Tax minimization, Effective tax planning, Tax strategy, Tax incentives
JEL Classification: E62
Suggested Citation: Suggested Citation
Swapan Kumar Bala (Contact Author)
University of dhaka ( email ).
University of Dhaka Dhaka 1000 Ramna, Dhaka, Dhaka 1000 Bangladesh
Do you have a job opening that you would like to promote on SSRN?
Paper statistics, related ejournals, public economics: taxation, subsidies, & revenue ejournal.
Subscribe to this fee journal for more curated articles on this topic
Tax Law: International & Comparative Tax eJournal
Academia.edu no longer supports Internet Explorer.
To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to upgrade your browser .
Enter the email address you signed up with and we'll email you a reset link.
- We're Hiring!
- Help Center
Corporate taxation system in bangladesh
Tax implications in each country are important consideration for an investor.
National Institute of Public …
Sinclair Davidson , Chris Berg
In October 2014 the Australian Senate agreed to an inquiry into corporate tax avoidance. This comes after a wave of media comment about apparent tax “minimisation” strategies practiced by large multinational firms, particularly firms operating in the technology space. The debate over company tax avoidance at home and abroad is a highly politically charged one, but the evidence suggests it offers far more heat than light.
Taxation and Public Finance in Transition and Developing Economies
The Taxation trend in Western Balkans, 2016 publication is first edition of publication of tax policies and issues in the Western Balkans countries. The countries that compile the contents of this report are part of Western Balkans and are ranked based in alphabetic order. They are Albania, Bosnia and Herzegovina, Kosovo, Macedoni, Montenegro and Serbia. The publication of policies and tax rates, together with the tax incentives for investors show both successful policies and reform challenges, as well as provide a good point of reference for individuals, scholars and businesses to participate in discussion around tax debates across a broader range of issues. This presentation shows that taxes on capital are not enough to give to the economy the proper incentives if the indirect taxes are not harmonized with the direct taxes. The tax policy on the other hand is only part of the picture when looking at the contribution made to investments and economy.
Sorry, preview is currently unavailable. You can download the paper by clicking the button above.
- We're Hiring!
- Help Center
- Find new research papers in:
- Health Sciences
- Earth Sciences
- Cognitive Science
- Computer Science
- Academia ©2023
Corporate Tax Preparation
Corporate Tax Preparation Service in Bangladesh
With a team of local tax specialists, we at LegalSeba.com aim to provide our customers with the necessary knowledge and insight into Bangladesh’s market. Along with the respective advisory services, our tax specialists also take care of all your taxation needs through our integrated Tax Services program. This includes services like- increasing net asset value, undertake transfer pricing, minimize tax liabilities, implement tax computer systems and provide advice regarding the financial implications of various business decisions. Further, we also provide compliance services- assisting our clients in the preparation of corporate and individual tax returns, tax audit defense and tax risk management.
Corporate Tax Rate in Bangladesh:
Besides, there are several tax exemption facilities for companies based on the nature of business & location.
We provide the following tax services:
Tax Planning and Consulting- To reduce the tax exposure of companies and give advice about the same, it is very important to understand the tax laws of the country, especially Double Tax Agreements. Our team of highly qualified Tax Experts is well versed in these laws and use this knowledge to provide the best advice to our clients.
Our major service areas include:
- Taxation services
- Tax planning and consulting
- Cross-border transactions
- Tax compliance
- Structured Tax
- Tax due diligence
- Business support services
Taxation Services- With a good understanding of the Bangladesh tax laws, we can make sure that the transnational risks of our clients are identified and reduced. We also make sure that all their operations are in compliance with International and Local Tax Regulations. We also provide the following services in regards to cross-border transactions:
- Withholding tax
- Value-added tax
- Transfer pricing
- Advanced Pricing Arrangement (APA)
- Double Taxation Agreements
We also specialize in providing assistance on tax compliance issues, such as:
- Corporate tax returns
- Monthly VAT (value-added tax) and withholding tax returns
- Personal income tax for expatriates
- Special business tax
To add to these, we also provide our clients with the preparation of tax registration and application procedures and claims. We can also assist our clients with domestic tax matters and legislation such as drafting objections, appeals, and request for tax rulings.
Indirect Taxes- Any business investing, or setting up shop in Bangladesh is subjected to indirect taxes. These taxes differ from country to country, hence giving Bangladesh its own set of laws. This creates new Regulatory Challenges for businesses. We provide the following services to manage Indirect Taxes:
- Information on rules, rates, and jurisprudence
- Indirect tax strategies that manage the impact of these taxes on the company’s financials, risk portfolio, and organization.
- Setting up, automating and digitizing indirect tax compliance processes.
- Support with indirect tax inspections and litigation.
- Monitoring of policy developments.
Transfer Pricing- All inter company pricing arrangements, with regards to transactions between related business entities, fall under Transfer Pricing. These can include the transfer of Intellectual Property, Tangible Goods, Services, Loans and other financial transactions. Due to the rapid rise of multinational trade, the interest in Transfer Pricing Agreements has seen a sudden rise. Needless to say, without professional services taking care of these agreements for a business, these can be viewed as tricky waters for any and all businesses.
We at LegalSeba.com keep these laws under intense scrutiny so that we can serve our clients with reliable information and help them navigate through this tricky section of doing business.
NGO Registration in Bangladesh
- Share Transfer
- Get Offers & Updates *
- Select Interested Area * Entrepreneur Startups Professionals Student Investor
- A Single Project
- Monthly Legal Support
- Startup Service Package
- Monthly Bookkeeping
- Free Initial Consultation
- International Business Support
- Your Business Area * -Accountancy -Activities of membership organization -Agriculture, forestry & fishing -Arts, entertainment, recreation, culture & sports -Charity/voluntary -Construction -Education -E-commerce -Manufacturing - Export, Import & Suppliers - Financial Institution -Mining, quarrying & utilities -Motor trades -Pharmaceuticals -PR/Advertising/Marketing/Design -Public Procurement/Private Contractor -Technology e.g. Computers, IT, Software -Travel & Tourism -Wholesale -Other Areas
- Number of Employees 1 - 5 employees 6 - 12 employees 13 - 50 employees 50 - 100 employees
- Business Formation
- Family Matters
- Intellectual Property
- RJSC Fillings
- Compliance & Governance
- Web Agreements
- Trading Contracts (reviews and drafting)
- Foreign Direct Investment
- Company Setup
- Company Operation & Maintenance
- Business Compliance & Regulations
- Employment, Staffing & Seconding Employees
- Supply of Goods & Services
- Franchising, Agency, Distribution or JV
- Venture Capital & Private Equity
- Television Media & Broadcasting
- Project Finance
- Data Protection
- Public Procurement
- Limited Company
- Branch/Liason Office
- Partnership Venture
- Joint Venture
- International Establishment
- Company Due Diligence
- Corporate Governance
- Annual Report Preparation
- Company Documents Filling
- Contract Review
- Contract Drafting
- Contract Editing
- International Filling
- Terms of Service
- User Manual
- Internal Audit
- Fraud Prevention
- Individual Tax Fillings
- Legal Advice
- BIN Registration
- Withholding Tax Return
- Company Tax Fillings
- RJSC Annual Return
- Share Issuance
- Constitution Amendment
- Board Restructuring
- Mergers & Acquisition
- Employment Agreements
- Employee Handbooks
- Termination and Severance
- Company Policy
- Service Book Preparation
- Please click the below button to Schedule a time for the consultaiton. Book a Meeting→
- Financial Projection
- Pitchdeck Review
- Valuation Facilitation
- Fundraising Documentation
- Loan Facilitation
- Financial Due Diligence
- Post Financing Compliance
- Researched Idea
- Early Prototype
- Minimum Viable Product
- Growth Stage
- Basic Package (
- Advance Package (
- Standard Package Package (
- Enterprise Package (
- Virtual CFO (50+ employees)
- Yearly Bookkeeping Preparation
- Please write down in short what you need
- Bangladesh Canada China Dubai Germany India Japan Singapore United Kindgom United States of America Other
- Comments This field is for validation purposes and should be left unchanged.
- +88 09606999121
- [email protected]
- House # 160 (6th Floor), Road # 08, Block # F, Bashundhara R/A Dhaka-1229
- +8801917746550 - 4
- Email: [email protected]
Follow Us On
Corporate Tax Planning In Bangladesh
Home/business Advisory/Corporate Tax Planning
- Digital Advisory Services
- Financial Due Diligence
- Government Grant Consultation
- Bpo Services
- Reliable Content Moderation Services
- Pre Lending Assessment Services
- Brand Strategy Consulting
- Business Rebranding Services
- Cash Flow Management Services in Bangladesh
- Virtual CFO Services
- Corporate Advisory
- Cybersecurity Risk Assessment
- Digital Marketing Consultant
- Family Business and Succession Planning Outsourcing
- Forensic Investigations Service
- Content Moderation Services
- IT Technology Advisory Services
- Online and Social Media Monitoring Services
- Corporate Tax Planning and Tax Advisory Services
- Business Restructuring Services
- Business Continuity Advisory and Planning
- Corporate Ma Merger and Acquisition Advisory Services
- Crisis Management Services
- Digital Business Process Outsourcing BPO Services
- Fundraising and Private Listing Services
- HR Advisory Services
- Management Consulting Services
- Business Market Research Services
- Project Management Services
- SME Transformation Package
- Staff Outsourcing Solutions
- Business Solution Services
- Business Succession Planning
- Import Tax on Bangladesh
- Paying Personal Income Tax
Professional Corporate Tax Planning and Tax Advisory Services
Corporate tax planning and tax advisory services are critical in any business and serve as a backbone for the company’s long-term success. Certified Accountants (CAs), Certified Cost & Management Accountants (CMAs), tax practitioners, advocates, and some financial advisors are all examples of tax advisors in Bangladesh. Tax advisors are well-versed and up-to-date in matters of tax law, as well as IFRS and other tax guidelines, regardless of their training.
Organizations may hold their administrations to speak to the organizations under the watchful eye of tax specialists and courts to resolve issues relating to tax laws and IFRS rules, because tax advisors are knowledgeable in tax laws and IFRS rules. Taxes are a necessary part of doing business. Your company faces several risks if you don’t use proper corporate tax planning and tax advisory services.
We assist our clients in assessing their tax issues and possibilities, as well as developing appropriate solutions to lessen their tax loads, by gaining a thorough understanding of their specific business requirements. Moreover, we work with our clients to minimize their tax burden by assisting them in analyzing the tax implications of their business actions and identifying tax opportunities as soon as possible.
Furthermore, we help our clients choose the best tax structure for upcoming transactions and all of their investments. Regulations pertaining to the client’s business and general tax regulations are reviewed simultaneously as part of our tax planning services to ensure that our clients get the most out of tax-saving options.
The Top 4 risks Are As Followed:
- Tax-related losses that were not anticipated.
- A lack of understanding of the tax implications.
- Uncertainty about how to deal with those dangers.
- You run the risk of failing to meet your tax obligations and compliance .
Simplified Corporate Tax Planning and Tax Advisory Services for You:
The operations of a company must run smoothly and efficiently. This rule does not have any exceptions. If your company doesn’t do this, you’re jeopardizing your ability to make strategic decisions for the future. That’s already a lot to consider. It certainly helps if a company doesn’t have to worry about lowering its tax burden and can instead focus on improving its operations.
Corporate tax planning and tax advisory services are essentially designed to assist a company in becoming more tax efficient. This allows the company to remain competitive in its field. A company is in a better position to deal with any changes that occur in its external environment when proper tax planning is done. Proper tax planning makes it easier for businesses to cut costs and increase profits for shareholders. These profits can then be re-invested back into the company. When this occurs, it indicates that the business is thriving and, as a result, it attracts even more investors, improving the company’s financial position.
Several methods will be used in comprehensive tax planning. Engaging the corporate tax planning and tax advisory services of a company that is well-versed in this area is the most straightforward way to do so. Take, for example, Network BD. Several local and international companies have benefited from our tax experts’ assistance in meeting their compliance requirements and obligations. We can assist you in the same way.
Get Advice from the Best in the Tax Business:
We all know that in business, experience is a valuable asset. As a result, our skilled professionals rely on their years of experience to provide you with the best possible solutions. The needs of each client differ depending on their specific business requirements. Tax laws are constantly changing, and our consultants are kept up to date on the latest developments.
Network BD provides a wide range of corporate tax planning and advisory services. Both inbound and outbound investments are catered for with our services. Use us as your single point of contact to make running your business in Bangladesh easier. It’s difficult enough to run a business. It shouldn’t be difficult to keep track of your taxes.
Taxes are always present in practically every level of a firm. To avoid unpredictable tax losses, it is vital to get guidance before engaging in a business transaction. As a result, it is preferable to plan ahead of time to reduce risk.
We can develop a method that will enable us to focus on assisting business leaders in making informed tax decisions, implementing improvements that will help manage tax affairs to support business operations, and addressing the risk associated with non-compliance through our traditional international tax services.
We offer Dynamic 8 services include:
We provide corporate Tax planning and Tax return services in Bangladesh. Our experts are always ready to help you in this purposes. If you need our corporate Tax planning services contact us today.
- Business ownership structure advice.
- How to evaluate and plan your company to determine the best entry structure.
- Identifying and capitalizing on the available incentives.
- Transfer Pricing Policies and Documentation Development
- Going over your financial models and tax assumptions again.
- Ensuring that taxation has the intended effect.
- Conducting a review of your due diligence.
- Acquisitions, mergers, and corporate reorganization planning.
FAQ For Corporate Tax Planning and Tax Advisory Services
Do you need a receipt for tax deduction, is a tax advisor equal to an accountant, can a financial advisor help with taxes, do tax advisors need a cpa, stay stress-free with our corporate tax consultation services.
- DATA PLANS Download historical data for 20 million indicators using your browser. Subscription Plans | Features API GATEWAY Direct access to our data from your apps using any programing language. Features | Documentation Already a user? Login Light Mode Dark Mode
- Indicators Inflation Rate Interest Rate Unemployment Rate GDP Growth GDP per Capita GDP Value Current Account Credit Rating Wages Growth Gold Reserves Government Debt Crude Oil Production Gasoline Prices Heatmap Table More Indicators
- Countries United States China Japan Canada Australia Brazil Russia India Euro Area United Kingdom Germany France Italy Spain Switzerland Singapore More Countries
Bangladesh Corporate Tax Rate 2022 Data - 2023 Forecast - 1997-2021 Historical
The Corporate Tax Rate in Bangladesh stands at 30 percent. source: National Board of Revenue (NBR), Bangladesh
Corporate tax rate in bangladesh averaged 30 percent from 1997 until 2022, reaching an all time high of 40 percent in 1998 and a record low of 25 percent in 2016. this page provides - bangladesh corporate tax rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. bangladesh corporate tax rate - values, historical data and charts - was last updated on march of 2023., corporate tax rate in bangladesh is expected to reach 30.00 percent by the end of 2023, according to trading economics global macro models and analysts expectations. in the long-term, the bangladesh corporate tax rate is projected to trend around 30.00 percent in 2024, according to our econometric models..
Activate your 30 day free trial to unlock unlimited reading.
Corporate Tax Planning: Bangladesh Perspective
You are reading a preview.
Activate your 30 day free trial to continue reading.
Check these out next
Download to read offline
More Related Content
Slideshows for you (20).
Similar to Corporate Tax Planning: Bangladesh Perspective (20)
More from M.K.Jahid Shuvo (8)
Recently uploaded (20)
- 1. Corporate Tax Planning M.K. Jahid Shuvo Dept. of A&IS Jahangirnagar University
- 2. Tax A tax is a compulsory payment levied on the persons or companies to meet the expenditure incurred on conferring common benefits upon the people of a country. Corporate Tax Tax that is levied on the income of a corporation or a company.
- 3. THERE IS NOTHING WHICH HURTS MORE THAN PAYMENT OF TAXES…..
- 4. Three Common Practices to save Taxes Tax Planning Tax Avoidance Tax Evasion
- 5. Corporate Tax Planning Corporate Tax planning is the arrangement of financial activities in such a way that maximum tax benefits are enjoyed by making use of all beneficial provisions in the tax laws. It entitles the assessee to avail certain exemptions, deductions, rebates and reliefs, so as to minimize his tax liability.
- 6. Corporate Tax Planning Maximize after tax rate of return Keep proper record Deduct TDS Pay Advance Tax Submit Return on time Comply with the rules
- 7. Is it legal to keep taxes as low as possible? Yes. It is Case Reference: (Justice Learned Hand, Comm. vs. Newman, 159 F.2d 848 [CA-2, 1947]). There is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. ……… nobody owes any public duty to pay more than the law demands: taxes are enforced extractions, not voluntary contributions”
- 8. Objectives of corporate tax planning Reduction of tax liability Minimization of litigation Healthy growth of economy Economic stability Taking maximum advantages of the exemptions, deduction, rebates, reliefs and other concessions
- 9. Key Points To Be Remembered It is not avoidance to payment of taxes Tax planning should not be done with an intent to defraud the revenue. All transactions with respect to tax planning should be in correct form and substance. Tax planning work should be done within the framework of law and its not illegal.
- 10. What is a Company/Corporation A company is incorporated under the Companies Act in Bangladesh and includes: • A body corporate established or constituted by or under any law in force • Any nationalised bank or industrial or commercial organisation • Any association or combination of persons, if any of such persons are registered as a company • An association or body incorporated by or under any laws of a country outside Bangladesh • Any foreign association or body which the NBR declares to be a company.
- 11. Tax Rates Publicly Traded Companies 25% Non-Listed Companies 35% 50% of export income is exempt from tax
- 12. Tax Rates Publicly Listed- Banks, insurance and other financial institutions 40% Non Listed- Banks, insurance and other financial institutions 42.5% Merchant Bank 37.5%
- 13. Tax Rates Cigarette, Zarda, Bidi, Gul or Any other tobacco product manufacturing companies 45%
- 14. Tax Rates Publicly Traded Mobile phone operator companies 40% Non-Listed Mobile phone operator companies 45% If mobile phone operator companies list at least 20% of their paid up capital through IPO, they shall receive a rebate of 10% in the year of listing.
- 15. Reduced rates of Corporate Tax Companies Tax Rate Textile industries (time extended up to 30 June 2019) 15% Jute industries (time extended up to assessment year 2019-2020) 10% Knit wear and woven garments manufacturer and exporter 20% Research Institutes at national level, registered under the Trust Act, 1882 or Societies Registration Act, 1860 15% Private Universities, Private medical college, Private dental college, Private engineering college or Private college engaged in imparting education on information technology 15% Co-operative society registered under Co-operative Society Act 2001 other than income from agricultural or cottage sector 15% Production of pelleted poultry feed, Production of pelleted feed for fish, shrimp and cattle, Production of seeds marketing of locally produced seeds, cattle farming, dairy farming, horticulture, frog farming, sericulture, mushroom farming and floriculture: Income up to Tk 1,000,000 Next Tk 2,000,000 On the balance amount 3% 10% 15%
- 16. Reduced tax rates applicable to local authority 25%reduced tax rate will be applicable for following local bodies: • WASA (Dhaka, Chittagong, Khulna and Rajshahi) • Bangladesh Civil Aviation Authority • RAJUK • RDA • KDA • CDA • National Housing Authority • Chittagong Port Authority • Mongla Port Authority • Pyra Port Authority • Bangladesh Inland Port Authority • Bangladesh Television • Bangladesh Betar • BIWTA • BRTA • BTRC • BPDP • BREB • BWAPDA • BEPZA • Bangladesh Bridge Authority • Borendra Multipurpose Development Authority (Rajshahi) • Bangladesh Hi-Tech Park Authority • IDRA • Sustainable and Renewable Energy Development Authority
- 17. Capital gains tax Capital gain tax is levied when the investor sells a capital asset for a price that is higher than the purchase price. It is different from normal gain. It only triggered when an asset is realized, not while it is held by an investor
- 18. Capital gains tax Capital gains tax on sale of shares of listed companies Capital gain from transfer of stocks and shares of public limited companies listed with stock exchange except listed Govt. securities. Tax Rate a) For resident companies and firms 10% b) Capital gain tax of non-resident shareholders 15% c) For sponsor shareholder and shareholder director 5% d) For resident individual holding at least 10% of the total share capital of the company 5%
- 19. Capital gains tax Capital gains tax other than sale of shares of listed companies Capital gain from transfer of stocks and shares of public limited companies listed with stock exchange except listed Govt. securities. In the case of a company, Income from capital gains will be separated from total income Tax at 15% is payable on such capital gains regardless of the period of holding of the asset from the date of its acquisition.
- 20. Capital gains tax In the case of an assessee other than a company, If the asset is transferred before the expiry of five years from the date of acquisition, the capital gains will be taxed at the usual rate applicable to the assessee’s total income including the capital gains. If the asset is transferred at any time after expiry of five years from the date of its acquisition, the capital gains will be taxed at the usual rate applicable to the assessee’s total income including the capital gains or at the rate of 15% on the amount of capital gains whichever of the two is lower.
- 21. Thank You…
Public clipboards featuring this slide, select another clipboard.
Looks like you’ve clipped this slide to already.
You just clipped your first slide!
Create a clipboard
Get slideshare without ads, special offer to slideshare readers, just for you: free 60-day trial to the world’s largest digital library..
The SlideShare family just got bigger. Enjoy access to millions of ebooks, audiobooks, magazines, and more from Scribd.
You have now unlocked unlimited access to 20M+ documents!
Learn faster and smarter from top experts
Download to take your learnings offline and on the go
Instant access to millions of ebooks, audiobooks, magazines, podcasts and more.
Read and listen offline with any device.
Free access to premium services like Tuneln, Mubi and more.
Help us keep SlideShare free
It appears that you have an ad-blocker running. By whitelisting SlideShare on your ad-blocker, you are supporting our community of content creators.
Friday March 17, 2023
- Book Review
- Game Reviews
- Good Practices
- Trial By Trivia
- US deficit grows to $262 billion in February as tax refunds surge
- Biden's $6.8 trillion budget challenges Republicans, raises taxes on rich
- 100 Dhaka, Sylhet students graduate from US Embassy’s microscholarship programme
- SS Steel's auditor flags understated VAT liabilities, unverified inventory, capital work
- BBC did not pay tax on certain remittances, claims I-T after 3-day survey
Corporate tax: How does Bangladesh compare with peers?
Some economists argue in favour of reducing the corporate tax rate citing countries with lower corporate tax rates that have outperformed other countries in terms of economic growth.
During the last two decades, corporate income tax (CIT) rate has increased from 30% in 2003 to 33 % in 2021. During the same time frame, while most regional peers of Bangladesh have lowered CIT, Bangladesh has clearly headed in the opposite direction.
Charging a high CIT to corporations is not without its limitations. Consequences of such tax policies lead to lower levels of after-tax income and retained earnings for companies. This means a higher tax rate reduces the residual income of a business, after tax, that it has available for retention or distribution (dividends).
Furthermore, fueled by a higher CIT rate, double taxation may have barred proliferation of local and foreign direct investment.
Currently, investors in Bangladesh are subject to a 10-15% tax on dividend earnings (non-resident individuals/companies tax rate 20%-30%). Local investors are subject to 10% tax on capital gains, compared to 15% tax for non-residential individuals and 5% for sponsors.
In practice, while all investors are subject to double taxation, a higher CIT rate only makes matters worse. Double taxation refers to the deduction of tax, first, from the pre-tax earnings of a corporation, and then, a second tax deduction, as personal income tax, on the investor's share of disbursed income.
According to the KPMG Taxation Report, corporate tax rate in Bangladesh for all unlisted public and private limited companies is 32.5%. However, corporate income tax rate (CIT) varies significantly based on the type of company.
For public companies listed on the exchange, the tax rate is 25%. While banks, insurance companies and other financial institutions are subject to 37.5% CIT (if listed) or 40% (if not listed).
Finally, the CIT rate for tobacco manufacturers and mobile network operators (MNO) is 45%, (40% for listed MNOs).
While the 33% CIT can be a burden for some corporations, the Finance Act 2019 and its latter amendments add to the woes of some companies.
According to the Section 16G of the Finance Act 2019, any listed company that retains more than 70% of its Net income after tax, has to pay 10% tax on the total amount being transferred to retained earnings.
Such a policy, however inadvertently, forces a dividend payout threshold for the companies, which can potentially take a toll on a company's strategic planning, operational performance and liquidity.
A more worrying trend can be observed in terms of tax collection. During the last 5 fiscal years, Tax Revenue as a percentage of Targeted Tax Collection has fallen drastically. FY 2015-2016, while the NBR was able to outperform the Tax collection targets by 2%, FY 2020 it was facing a shortfall of 32% (tax collection 68% of target). While a large chunk of it may be due to mismanagement in the collection of tax, a portion of it may be attributable to higher tax rates that have influenced offshore money-laundering.
While targets and estimates may often not match reality, a study conducted by NBR last year paints a worrying picture. According to NBR, out of 213,505 companies registered under RJSC, only 45,000 submitted tax returns. This implies that CIT compliance rate is 21%, i.e. – only 1 in 5 registered businesses pay tax.
Despite this, policy makers shy away from implementing major tax reforms, by cutting taxes for businesses.
Some economists argue in favour of reducing the corporate tax rate citing countries with lower corporate tax rates that have outperformed other countries in terms of economic growth.
During most of the last two decades, the average CIT rate in Asia has lingered at around 22%. Throughout this time period, two regional peers, Vietnam and Thailand, have held their CIT rates below the Asian average.
Therefore, their story of success macroeconomically is no coincidence. According to the World Bank, export of goods and services relative to nominal GDP throughout South Asia, since the early 2000s, has been an average of 20%. Vietnam and Thailand have outperformed all South Asian countries by averaging 78% and 67% respectively.
FDI to Thailand and Vietnam historically has been equivalent to as high as half of all of South Asia's FDIs. The results of this are well captured by the per capita GDP of these countries when compared to South Asian averages.
Besides capping the tax rates at 20%, Vietnam has implemented other business-friendly measures, such as the Preferential Tax Rates, which allows selected industries to enjoy CIT rates of 10% only.
In fact, Bangladesh, too, has similar policies. Currently, eight types of industrial companies, including - Jute, Textile, Knitwear, Poultry, Private Educational Institute, etc., are enjoying waived tax rates ranging between 3% to 15% based on various criteria.
Other tax incentives, such as the ones dedicated for businesses operating in EPZs, serve as a relief for qualifying industries. However, the CIT rate for the vast majority of industries is still 33%.
CIT is also not the only form of tax corporations are subject to. For firms for which CIT may not be directly applicable, a withholding tax is charged at a rate ranging between 0.3% to 15%. This withholding tax is charged on any of the 25 types of income of a firm listed by the NBR.
On the other hand, industries such as mobile phone operators are subject to 2% and 1% source tax on gross receipts respectively, given that gross receipts exceed BDT 5M.
There are further other indirect forms of taxes, such as VAT, tariffs, etc. In an ever so competitive business world, all these taxes are seen as a burden on local corporations.
For years, however, economists in Bangladesh have been divided over the benefits of lowering corporate taxes.
"Uzbekistan, Montenegro and Hungary have a single-digit corporate tax rate of 7.5 percent. Lower corporate tax rate is one of the main drivers of economic development for Ireland," said executive director of the Policy Research Institute Ahsan H Mansur in a 2018 interview.
"We have to be at par with similar countries. Compliance will rise and the tendency to hide incomes will reduce if the tax rate is reduced," he said back then, adding that corporate tax rate usually hovers between 20 percent to 25 percent in developed and emerging nations.
Golam Moazzem, research director of the Centre for Policy Dialogue, is however sceptical.
"Correlation between corporate tax rate cut and new investments does not strongly exist in Bangladesh. This is because of weakness in financial reporting," he said in a 2019 interview.
"It may not be the case that in every instance entrepreneurs will increase investment in case of corporate tax cut," he added.
Tax reforms, meanwhile, are easier said than done. For businesses to run efficiently, infrastructure, such as roads, logistics and power, is of paramount importance. These infrastructures are, by and large, funded by the government using tax revenue.
In conclusion, the corporate and the policy makers must find common ground – an optimal corporate tax rate. As we graduate from LDC, challenges await Bangladesh and its businesses in the years ahead. Paired with this, the threats of the pandemic have not passed as well. The road ahead is long and difficult, but in order to build a resilient and sustainable economy, Bangladesh needs to rethink its CIT rate. Such a move will likely encourage investments (FDI inflows), increase output (GDP) and boost our trade capabilities (export), opening doors of possibilities for us in the decades to come.
Analysis / Features / Top News
corporate tax / Corporate / tax / vat
While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.
Want to stop the next SVB? Read more Plato
Climate adaptation plans must identify the correct problem: gawher nayeem wahra.
First fully recycled textile fashion brand launched in Dhaka
The fishing cat is no 'tiger'
More videos from tbs.
Demand for ready-made houses is on the rise in Munshiganj
“Aasha” Lingerie for all shapes and sizes
US-Russia blame each other for drone crash
Chelsea to host first-ever Open Iftar in Ramadan
Tk9cr recovered, 7 detained over DBBL microbus robbery: DB
Take a loan, buy the bank - the Southeast way
SA Group MD, his wife banned from leaving country
Mahindra shuts its Bangladesh subsidiary
Metro rail to run at full capacity on Uttara-Agargaon route from July
Strong nor'wester likely on 15-19 March
At TFX we've been doing taxes for U.S. expats for over 25 years
Expat taxes are complicated. Seriously.
Every precaution recommended by the IRS & more
Clear, transparent process. Thorough & well-thought-out
IRS Restructuring & Reform Act of 1998 protects taxpayers
Trusted by tens of thousands of clients worldwide
Which should you hire and why?
We stand by our work — year in, year out.
If you have years of experience with expat tax, get in touch!
Live webinar with Q&A — join & ask questions!
Many imitators, only one TFX. Ask the tough questions
Specific use cases & scenario analysis
Top notch customer service is core to TFX
We are the best at what we do and we’re here to help you
IRS to Offer Saturday Hours at Taxpayer Assistance Centers
Supreme Court Ruling: Non Willful Failure to File FBAR Penalty Applies Per Report, Not Per Account
IRS Launches Power of Attorney and Tax Information Authorization Requests Online
Easy process with an expert tax preparer
No matter where you reside — you must file US tax returns
TFX helps Non-US aliens or Green Card holders file returns
Discover the average cost of tax return preparation for you
Get started call with tax preparer
High-level phone consultations with experts
Scary letter from the IRS? TFX can help
Selling stocks? New job? Make educated financial decisions
Easily determine your US tax residency status
How to renounce citizenship or green card
TFX can review your prior returns for errors
We can re-file returns that need a little fixing up
TFX can call and negotiate with the IRS on your behalf
New filing requirements for foreign owners of U.S. LLC
To report ownership in Foreign Corporations
Amnesty program for those residing in the states
U.S. tax requirements of non-US e-commerce merchants
Form 1040 Federal Tax Return Package
For those with additional income sources beyond the core package.
For those who have not filed and want to become compliant with amnesty from penalties.
Frequently asked questions & tips
How to use our handy tax questionnaire
We host a daily webinar to walk through our easy process and answer questions
Every precaution recommended by the IRS. And then some
The IRS has announced that it will offer Saturday hours at many of its Taxpayer Assistance Centers... Mar 16, 2023
On February 28, 2023, the U.S. The Supreme Court made a landmark decision on how the penalty for a... Mar 10, 2023
The IRS has made it easier for taxpayers to authorize individuals to represent them before the IRS... Mar 09, 2023
Taxpayer identification numbers are essential for anyone who wants to pay taxes in the United Stat... Mar 08, 2023
The IRS has announced that taxpa... Mar 03, 2023
What is FATCA (Foreign Account Tax Compliance Act)? Prior to the FATCA introduction, t... Mar 01, 2023
Are you a student or parent who has paid for college expenses this year? If so, you may ... Feb 28, 2023
The Internal Revenue Service (IRS) has recently announced that taxpayers who receive certain notic... Feb 23, 2023
When you file your federal income tax return, you may owe a balance due to the ... Feb 20, 2023
It's that time of the year when you start receiving multiple tax forms sent your way to equip ... Feb 16, 2023
If you are a parent who has a child with investment income, you may need to file Form 8814... Feb 14, 2023
Filing taxes can be a complicated and confusing process, especially when it comes to certain forms... Feb 10, 2023
Prior year transcripts - who to call, which forms to fill out, etc.
A common misunderstanding is that US citizens abroad do not have to file tax returns
Audits are no fun, especially when the documents are not standard US tax forms; TFX can help
How the IRS computes tax, interest, and other penalties & what you can do to avoid them
Scary IRS letters? We will help you debunk them and form an action plan to fix any issues
TFX is an authorized e-file firm and e-files tax returns for taxpayers globally
If you do have a tax bill, what are the ways you can pay the IRS?
We can amend prior filed returns to ensure you get the deductions & credits you are eligible for
In cases where E-filing is not permitted (IRS rules), we outline where and how to snail mail the returns
Short answer: Yes. Long answer: Certainly, but your tax return needs to be optimized.
The IRS can’t chase you forever; we break down the rules behind the IRS statute of limitations
What are ITINs, who needs one, how to get one, and when they expire
Recently Published Articles
Expatriate tax glossary. Commonly used terms explained
More complicated than it sounds. How ‘US Person’ is defined by the IRS and what it means to you
“Resident” can have many different meanings for the IRS.
FinCEN Form 114 and filing requirements explained. Who needs to file, when, and why?
Filing requirements, penalties, and other considerations
Financial reporting requirements explained
How is your nest egg treated by the IRS? It depends on the country and the plan
Save over $100,000 on your US tax return with this nifty exlcusion. But, it’s complicated
How to avoid double taxation
One of two ways to meet the Foreign Earned Income Exclusion (FEIE)
Second method to meet the Foreign Earned Income Exclusion (FEIE)
Moving overseas (inbound or outbound) midyear is not uncommon
It’s the law. But, outside of legal reasons, many taxpayers may also benefit from refunds
There are many different deadlines & possible extensions - TFX can keep you abreast.
What are the minimum thresholds that trigger tax filing requirements?
Which documents you may require in getting caught up to date on your tax returns
It depends. State taxes are one of the most misunderstood aspects of expat tax.
Thousands of tax forms exist, but which select few you really need to understand
How to understand these two terms & use them to your advantage to obtain tax refunds
Why these complex terms can mean a lot to self-employed individuals & digital nomads
US tax filing requirements & credits specific to permanent residents
Big life choice that also carries hidden tax implications & filing requirements
Will Your Non-US Spouse be Able to Receive Survivor, Dependent, or Spousal Benefits?
US Citizens & Green Card holders who are living and working outside the US
TFX has partnerships with many international schools to assist their staff with tax filings
Contractor taxes contain many nuances, especially for potential state tax filing requirements
Aid workers (& other staff) of the UN, EC, WHO or WB have many tax advantages and tax complexities
Thx for keeping us safe in the sky! International pilot taxes are *almost* as complex as flying a jet
Working in war zones or stationed abroad, TFX can help understand filing requirements
Global citizens who earn a living without a permanent establishment
TFX files returns for American retirees globally & ensures their nest eggs are protected
We support entrepreneurs globally & explain how to make the most of your hard-earned earnings
Permanent residency has tax implications - we explain what you need to know
Born with a U.S. citizenship but never filed tax returns? TFX can help.
Multiple citizenship is in vogue! TFX explains your U.S. tax filing requirements
Non-US Citizens and Green Card Holders who have U.S income and require filing tax returns.
Non-US corporations owned by US Citizens and Green Card holders. Complex form debunked.
How do local country income, investments, taxes translate to U.S tax returns? Country specific guides.
Retirees abroad enjoy sunshine & tax advantages. Our guide explains how to plan accordingly.
Remote work is booming and so is the nomad lifestyle; understanding tax implications is a must
What do US expats abroad need to know for 2020? TFX annual guide explains due dates & more.
Contractors (especially military) have different tax treatment than normal employed expats
Non-US mutual fund investments may carry onerous tax implications
Financial reporting forms - similarities, differences, due dates, and more
Missionary tax treatment will vary based on country & presence of social security agreements
Tax reform that reshaped much of the tax code: winners, losers, and business implications
The IRS expects certain taxpayers to make payments before the deadline - learn how and why
TFX Mobile app
- Country Guides
Simple Tax Guide for Americans in Bangladesh
US Expat Taxes - Bangladesh
At Taxes for Expats we have been preparing U.S. tax returns for U.S. Citizens and green card holders working in Bangladesh for over 4 years. Our clients hail from all parts of the country - Dhaka and Chittagong, Khulna and Rajshahi, Narayanganj and Nasirabad.
As a U.S. Citizen or green card holder you are legally required to file a U.S. tax return each year regardless of whether you already pay taxes in your residence country.
We offer professional tax services. That means we figure out the best and most optimal way to file your U.S. tax return and avail you of all possible exclusions and deductions. But just as importantly - avoid the errors that would allow IRS to disallow your return and levy fines & penalties on top. You can also do them yourself - not that we recommend it . For more information please see IRS .
The expatriate Foreign Earned Income Exclusion can only be claimed if you file your tax return on a timely basis. It is not automatic if you fail to file and can even be lost.
We have many clients living in Bangladesh and know how to integrate your U.S. taxes into the local income taxes you pay. Any income tax you already pay in Bangladesh can be claimed as against the tax liability on your U.S. return on the same income.
As an expat living abroad you get an automatic extension to file until June 15th following the calendar year end. (You cannot file using the calendar year as is standard in Bangladesh for U.S. tax purposes). You must, however, pay any tax that may be due by April 15th in order to avoid penalties and interest. You can get an extension to file (if you request it) until October 15th. There are other forms which must be filed if you have foreign bank or financial accounts; foreign investment company; or own 10% or more of a foreign corporation or foreign partnership. If you do not file these form or file them late, the IRS can impose penalties of $10,000 or more per form. These penalties are due regardless of whether you owe income taxes or not. We have helped hundreds of expats around the world catch up with their past U.S. taxes because they have failed to file U.S. tax returns for many years. This is, in fact, our specialty and we offer a 10% discount to clients to wish to file multiple tax return s at once and get in full compliance with the IRS. Work with a recognized expert to help you prepare your American tax return. We can also provide tax planning and advice with other expatriate tax; we look forward to working with you.
Bangladesh personal income tax rates
Below we include information on the Bangladesh Tax System for the American Expatriates.
Bangladesh personal income tax rates for assessment year 2018 - 2019 is progressive up to 25% .
Income tax is one of the main sources of revenue in Bangladesh. It is a progressive tax system. Bangladesh Income tax is imposed on the basis of ability to pay. The more a taxpayer earns the more tax he should pay. This is the basic principle of charging income tax in Bangladesh. The tax system aims at ensuring equity and social justice. Tax rates in Bangladesh also differs between male and female individuals.
Time to submit income tax return: Unless the date is extended, by the 30th day of September next following the income year.
Who should submit Income Tax Return ?
- If total income of any individual during the income year exceeds BDT 300,000.
- If any person was assessed for tax during any of the 3 years immediately preceding the income year.
- A person who lives in any city corporation/paurashava/divisional HQ/district HQ and owns a building of more than one storied and having plinth area exceeding 1,600 sq. feet/owns motor car/owns membership of a club registered under VAT Law.
- If any person subscribes a telephone.
- If any person runs a business or profession having trade license and operates a bank account.
- Any professional registered as doctor, lawyer, income tax practitioner, Chartered Accountant, Cost & Management Accountant, Engineer, Architect and Surveyor etc.
- Member of a Chamber of Commerce and Industries or a trade Association.
- Any person who participates in a tender.
- A person who has a Taxpayer's Identification Number (TIN).
- Candidate for Union Parishad, Paurashava, City Corporation or Parliament elections.
- Any company registered under Companies Act, 1930 or 1994
Bangladesh Corporate Tax Rates
The standard rate of corporate tax in Bangladesh is 25% in 2018 - 2019 tax year. This is the standard corporate tax rate applicable to publicly traded companies in Bangladesh, a list including tax rates for other corporations are as follows:
Income Tax Authorities in Bangladesh
Income Tax Authorities in Bangladesh are:
- National Board of Revenue,
- Director General of Inspection (Tax),
- Commissioner of Taxes (Appeals),
- Commissioner of Taxes (LTU)
- Director General (Training),
- Director General Central Intelligence Cell (CIC),
- Commissioner of Taxes,
- Additional Commissioner of Taxes (Appeal/Inspecting),
- Joint Commissioner of Taxes(Appeal/Inspecting ),
- Deputy Commissioner of Taxes,
- Assistant Commissioner of Taxes,
- Extra Assistant Commissioner of Taxes,
- Inspectors of Taxes.
Tax Withholding Functions
In Bangladesh withholding taxes are usually termed as Tax deduction and collected at source. Under this system both private and public limited companies or any other organization specified by law are legally authorized and bound to withhold taxes at some point of making payment and deposit the same to the Government Exchequer. The taxpayer receives a certificate from the withholding authority and gets credits of tax against assessed tax on the basis of such certificate.
Tax Rebate for Investment
Rate of Rebate: Amount of allowable investment is either up to 25% of total income or BDT 500,000 whichever is less. Tax rebate amounts to 10% of allowable investment. Types of investment qualified for the tax rebate are:
- Life insurance premium
- Contribution to deferred annuity
- Contribution to Provident Fund to which Provident Fund Act, 1925 applies
- Self contribution and employer's contribution to Recognized Provident Fund
- Contribution to Super Annuation Fund
- Investment in approved debenture or debenture stock, Stocks or Shares
- Contribution to deposit pension scheme
- Contribution to Benevolent Fund and Group Insurance premium
- Contribution to Zakat Fund (Zakat: Islamic Tax)
- Donation to charitable hospital approved by National Board of Revenue
- Donation to philanthropic or educational institution approved by the Government
- Donation to socioeconomic or cultural development institution established in Bangladesh by Aga Khan Development Network
- For a return submitted under normal scheme, assessment is made after hearing.
- For returns submitted under Universal Self Assessment Scheme, the acknowledgment slip is determined to be an assessment order. Universal Self Assessment is of course subject to audit.
Appeal against the order of DCT
A taxpayer can file an appeal against DCT's order to the Commissioner (Appeals) / Additional or Joint Commissioner of Taxes (Appeals) and to the Taxes Appellate Tribunal against an Appeal order.
Major Areas for Final Settlement of Tax Liability in Bangladesh
Tax deducted at source for the following cases is treated as final discharge of tax liabilities. No additional tax is charged or refund is allowed in the following cases:
- Supply or contract work
- Band rolls of hand made cigarettes
- Import of goods
- Transfer of properties
- Export of manpower
- Real Estate Business
- Export value of garments
- Local shipping business
- Royalty, technical know-how fee
- Insurance agent commission.
- Auction purchase
- Payment on account of survey by surveyor of a general insurance company
- Clearing & forwarding agency commission.
- Transaction by a member of a Stock Exchange.
- Courier business
- Export cash subsidy
Tax holiday is allowed for certain industrial undertaking, tourist industry and physical infrastructure facility established between 1st July 2008 to 30th June 2011 in fulfillment of certain conditions.
Tax Rate For Foreign Companies
Tax incentives exist for investors in general, whether or not they are Bangladeshi.
Capital Gains Taxation
Main allowable deductions and tax credits, other corporate taxes, bangladesh value added tax (vat) rates .
The general rate of Value Added Tax (VAT) in Bangladesh is 15% .
- Value Added Tax (VAT) is imposed on goods and services at import stage, manufacturing, wholesale and retails levels;
- A uniform VAT rate of 15% is applicable for both goods and services;
- 15% Value Added Tax (VAT) is applicable for all business or industrial units with an annual turnover of Taka 2 million and above;
- Turnover tax at the rate of 4% is leviable where annual turnover is less than BDT 2 million;
- Value Added Tax is applicable to all domestic products and services with some exemptions;
- Value Added Tax (VAT) is payable at the time of supply of goods and services;
- Tax paid on inputs is creditable / adjustable against output tax;
- Export is VAT exempt;
- Cottage industries (defined as a unit with an annual turnover of less than BDT 2 million and with a capital machinery valued up to BDT 300,000) are exempt from Value Added Tax;
- Tax returns are to be submitted on monthly or quarterly or half yearly basis as notified by the Government.
If you’re a working American citizen, you most likely have to pay your taxes. And if you’re reading this article, you’re probably curious to know what exactly you’re paying for. The government uses taxes to finance projects essential for th...
Taxes may not be the most exciting financial topic, but they’re definitely important. In the United States, federal and state governments need money to provide certain services and benefits that we wouldn’t otherwise have access to, from So...
Corporate planning is a strategic tool used by companies to set long-term plans to meet certain objectives, such as business growth and sales volumes. Corporate plans can be created and used by businesses of all sizes, but are most commonly...
Tax Planning in Business: Bangladesh Perspective. Swapan Kumar Bala, FCMA. Associate Professor. Department of Accounting & Information Systems.
planning principles: Taxes decrease if income earned by entity is subject to a low rate. Taxes decrease if payment
This presentation shows that taxes on capital are not enough to give to the economy the proper incentives if the indirect taxes are not harmonized with the
Corporate Tax Rate in Bangladesh: · Information on rules, rates, and jurisprudence · Indirect tax strategies that manage the impact of these taxes on the
Corporate tax planning and tax advisory services are critical in any business and serve as a backbone for the company's long-term success.
Capital Duty (non-tax planning).
Corporate Tax Rate in Bangladesh is expected to reach 30.00 percent by the end of 2023, according to Trading Economics global macro models and analysts
9. Key Points To Be Remembered It is not avoidance to payment of taxes Tax planning should not be done with an intent to defraud the revenue
Currently, investors in Bangladesh are subject to a 10-15% tax on dividend earnings (non-resident individuals/companies tax rate 20%-30%). Local investors are
Entities with an annual turnover below BDT 8 million are subject to an annual turnover tax which replaces VAT and corporation tax. Bangladesh Value Added Tax (
... 2021-22 (Step by Step) | Corporate tax rate in Bangladesh | Practical Session on Corporate Tax Management | Corporate tax Planning i...