1.

Definition of the Company: According to rule 2(20) here, (1 to 5) these 5 things are
included.

2. How the residential status of the company is determined?

3. Company Tax rate according to the different income

4. Details of Assessment:
Two types of assessments. One is universal self-assessment and other is normal
assessment. In universal self-assessment, there is less hassle in general.

5. Tax holiday for which company?

6. Incentives for Participants- merchandise, brokerage house, investors, issue related people
or purchase-sale related people.

7. Who will be treated as placement holder?

5% tax for Placement Shareholder

8. According to 19 (11G), rule 24 company’s return form is different. What is the rule here?
2. How the residential status of the company is determined?

1. For the purposes of this Convention, the term "resident of a Contracting State" means
any person who, under the laws of that State, is liable to tax therein by reason of his domicile,
residence, place of incorporation, place of effective management or any other criterion of a
similar nature. But this term does not include any person who is liable to tax in that State in
respect only of income from sources in that State.

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both

Contracting States, then his status shall be determined as follows:
(a) he shall be deemed to be a resident of the State in which he has a permanent
home available to him; if he has a permanent home available to him in both
States,
he shall be deemed to be a resident of the State with which his personal and
economic relations are closer (centre of vital interests);
(b) if the State in which he has his centre of vital interests cannot be determined,
or if he has not a permanent home available to him in either State, he shall be
deemed to be resident of the State in which he has an habitual abode;
(c) if he has an habitual abode in both States or in neither of them, he shall be
deemed to be a resident of the State of which he is a national;
(d) if he is a national of both States or of neither of them, the competent
authorities
of the Contracting States shall endeavor to settle the question by mutual
agreement.

3. Where by reason of the provisions of paragraph 1 a person is a resident of both

Contracting States, then the competent authorities of the Contracting State shall determine by
mutual agreement the Contracting State of which that person shall be deemed to be a resident
for the purposes of this Convention.
 3. Company Tax rate according to the different income

Corporate tax:
Corporate tax rates for industrial companies whose shares are publicly traded is 35% and the rate
of those whose shares are not publicly traded is 40%
Tax rates on other companies:
Tax rates on income of all other companies including banks, financial institutions, insurance
companies and local authorities is 45%
Investment requirement by companies enjoying tax holiday:
Companies enjoying tax holidays are required to invest only 25% to 30% of their income in other
activities as per rule of N.B.R.

Accepted of returns of public limited companies:

Returns filed by the public limited companies shall be accepted as correct if it is accompanied by
audited accounts and certified by a chartered accountant as to the correctness of the total income
of the assessee.
Salary of foreign technicians:
Salary income received by or due to a foreign technician under contract of service approved by
the National Board of Revenue is fully exempted from paying tax (subject to prescribed
conditions and limitations) for a period of three years from the date of his arrival in Bangladesh
Tax payable by employer on remuneration of foreign technician:
Expenditure incurred by an employer in respect of remuneration of a foreign technician is also
fully exempted from income tax (subject to the stipulated conditions)
Remuneration of foreign technicians employed by the firms of consultancy and engineers:
Expenditure incurred as remuneration payable to a foreign technicians by a Bangladeshi firm
carrying on the business of consultant and engineers in Bangladesh is fully exempted from tax
(subject to prescribed conditions and limitations)

BANGLADESH CORPORATE TAX RATES

The standard rate of corporate tax in Bangladesh is 27.5% in 2008 - 2009 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:

Publicly Traded Company 27.5%

Non-publicly Traded Company 37.5%
Bank, Insurance & Financial Company 45%
Mobile Phone Operator Company 45%

If any publicly traded company declares more than 20% dividend, 10% rebate on total tax is
allowed.

Time to submit income tax return: By 15th of July next following the income year or, where the
15th of July falls before the expiry of 6 months from the end of the income year, before the
expiry of such 6 months.
Advance Payment of Tax

Every taxpayer in Bangladesh is required to pay advance tax in four equal installments falling on
15th September; 15th December; 15th March and 15th June of each year if the latest assessed
income exceeds BDT 300,000. Penalty is imposed for default in payment of any installment of
advance tax.

Sources of Income in Bangladesh

For the purpose of computation of total income and charging tax thereon, sources of income can
be classified into 7 categories, which are as follows :

- Salaries
- Interest on securities
- Income from house property
- Income from agriculture
- Income from business or profession
- Capital gains
- Income from other sources.
 4 Details of Assessment:
Two types of assessments. One is universal self-assessment and other is normal assessment. In
universal self-assessment, there is less hassle in general.

Universal self-assessment method of paying taxes has gained popularity this year. Individual
taxpayers are exercising the freedom to pay any amount of tax consistent with their earnings and
expenditures and are also they facing less harassment because the discretionary powers of
taxmen have been curtailed.

The universal self-assessment method was introduced from last fiscal year to enable individual
taxpayers to assess their own incomes and expenditures and submit taxes accordingly without
taking assistance from tax practitioners and middlemen.

Assessment Procedures

- 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.

Self Assessment for companies (Corporation Tax Self Assessment)

1.4.1 Although the Self Assessment legislation in the 1994 (and subsequent) Finance Acts
was mainly focused on income tax, the rules also provided the basic framework for a
Self Assessment regime for companies (and other bodies within the charge to
corporation tax). But, from the outset, the plans were for CTSA to be introduced after a
period of time to allow Pay and File to settle down, ITSA to be assimilated, and to
allow the Department’s computer developments to take place. This phased
introduction was catered for by providing that the new rules would only apply to
accounting periods ending on or after an ‘appointed day’. The Chancellor of the
Exchequer announced, in his November 1997 pre-Budget statement, that the
appointed day would be 1 July 1999.
So CTSA applies to all company accounting periods ending on or after 1 July 1999.
1.4.2 Also in his pre-Budget statement, the Chancellor announced further reforms to the
company tax regime, including the abolition of Advance Corporation Tax (ACT) and
the introduction of a “modern system for corporation tax payments” under which the
largest companies pay their corporation tax by instalments, based on ultimate liability
(referred to in this Guide as Quarterly Instalment Payments).
1.4.3 Finance Act 1998 provided an opportunity to recast much of the original legislative
framework for CTSA, by bringing the provisions together in one place - Schedule 18
FA 1998 - and drafting them in a new user-friendly style.
The normal Self Assessment process
If you have to pay your tax through Self Assessment because, for example, you are self-
employed, then you must fill in an annual tax return. HMRC will calculate your tax bill based on
the figures in your tax return but you can work out the amount of tax due yourself if you want to,
but HMRC will do the calculation.

Paying tax under normal Self Assessment

If you send in a paper tax return by the filing date of 31 October following the end of the return
year you will be sent a tax calculation. HMRC will follow the calculation with a statement of
account, which is like a tax bill, in time for the due date for payment of 31 January. If you file an
online return, your tax bill is calculated automatically. The online filing date and the due date for
payment is the same, 31 January following the end of the tax year.

Who should submit Income Tax Return in Bangladesh?

- If total income of any individual other than female taxpayers, senior taxpayers of 70 years and
above and retarded taxpayers during the income year exceeds BDT 165,000.
- If total income of any female taxpayer, senior taxpayer of 70 years and above and retarded
taxpayer during the income year exceeds BDT 180,000.
- 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 storey 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.
- 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.