Final Tax Book

Table of Contents
Table of Contents
Bangladesh Tax Handbook 2016 2017 2 | Page

Table of Contents

Table of Contents
MAJOR CHANGES IN 2016 - 2017............................................................... 1
1 Major changes in Income Tax............................................................. 3
2 Major changes in Value Added Tax (VAT)............................................... 20
SUMMARY OF INCOME TAX.......................................................................21

3 Important definitions..................................................................... 23
INCOME..............................................................................................25
4 Residential status......................................................................... 25
5 Scope of total income.................................................................... 25
6 Heads of income........................................................................... 26
7 Income from salary........................................................................ 26
8 Interest on securities..................................................................... 29
9 Income from house property............................................................ 30
10 Agricultural income....................................................................... 31
11 Income from business or profession.................................................... 32
11.1 Admissible deductions........................................................... 33
11.2 Deductions not admissible in certain circumstances........................ 36
11.3 Normal depreciation allowance................................................ 38
11.4 Initial depreciation allowance.................................................. 39
11.5 Accelerated depreciation allowance.......................................... 40
11.6 Amortization of license fees.................................................... 40
12 Capital gains............................................................................... 41
13 Income from other sources.............................................................. 42
14 Deemed income........................................................................... 43
TAX RATE STRUCTURE............................................................................46

15 Personal tax rate structure.............................................................. 46
15.1 Tax on capital gain............................................................... 47
15.2 Other tax rates.................................................................... 47
15.3 Surcharge on individual assessee............................................... 47
15.4 Tax on non-resident assessee................................................... 48
16 Corporate tax rate structure............................................................ 48
16.1 Additional tax..................................................................... 49
Bangladesh Tax Handbook 2016 2017

Table of Contents
17 Minimum tax............................................................................... 49
17.1 Based on class of assessee...................................................... 50
17.1.1 Individual, HUF, Firm, AOP, AJP........................................ 50
17.1.2 Company and Firm....................................................... 50
17.2 Based on source of income...................................................... 51
17.3 Determination of income, tax liability and minimum tax.................. 53
18 Tax deducted at source................................................................... 55
19 Set-off and carry forward of losses..................................................... 66
20 Carry forward of depreciation allowance............................................. 67
FILING OF RETURN & PAYMENT OF TAX.......................................................68

21 Filing of return of income................................................................ 68
22 Filing of revised return................................................................... 70
23 Return of withholding tax................................................................ 70
24 Payment of tax on the basis of return................................................. 70
25 Payment of tax deducted at source.................................................... 71
26 Advance payment of tax................................................................. 71
26.1 Advance tax based on income.................................................. 71
26.2 Advance tax on cigarette manufacturers..................................... 72
26.3 Advance tax on private motor car owners.................................... 72
27 Mode of payment.......................................................................... 73
ASSESSMENT........................................................................................74
28 Provisional assessment................................................................... 74
29 Assessment on correct return........................................................... 74
30 Universal self-assessment................................................................ 74
31 Spot assessment........................................................................... 75
32 Assessment after hearing................................................................ 75
33 Assessment on the basis of report of a Chartered Accountant..................... 76
34 Best judgement assessment............................................................. 76
35 Other assessments........................................................................ 76
TAX INCENTIVE.....................................................................................77
36 Tax exemption............................................................................. 77

Table of Contents
37 Reduced rate of tax..................................................................... 101
38 Tax rebate................................................................................ 105
39 Conditions for tax exemption for newly established industrial undertakings
and physical infrastructure facilities................................................. 108
40 Investment allowances eligible for tax credit...................................... 108
41 CSR activities eligible for tax credit................................................. 110
42 Special tax treatment.................................................................. 112
43 Avoidance of double taxation......................................................... 112
TRANSFER PRICING.............................................................................. 113

44 Transfer pricing.......................................................................... 113
44.1 Computation of arms length price.......................................... 113
44.2 Maintenance and keeping of information, documents and records..... 114
44.3 Submission of statement of international transaction.................... 115
44.4 Report from an accountant to be furnished................................ 115
44.5 Procedure from record keeping to submission of return................. 116
44.6 Assessment procedure......................................................... 117
OFFENCES, PENALTIES & PUNISHMENTS.................................................... 118

45 Offences, penalties & punishments................................................... 118
SUMMARY OF VALUE ADDED TAX............................................................. 123

46 Taxes imposed under VAT Act, 1991.................................................. 125
47 Goods and services chargeable to VAT............................................... 125
48 Persons responsible to pay VAT........................................................ 126
49 VAT deduction at source................................................................ 126
50 Deposit of deducted VAT............................................................... 126
51 Scope of VAT and specified rates...................................................... 127
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
2016 - 2017

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, 2016]
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 for the Income Year 2015 - 2016 and Assessment Year 2016
- 2017. The following table shows a comparative analysis of the personal tax
rate structure between Assessment Years 2016 - 2017 and 2015 2016
Assessment Year: 2016-2017 Assessment Year: 2015-2016

(Income Year: 2015-2016) (Income Year: 2014-2015)
Income Rate Income Rate of
of tax 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
assessee assessee
of total income of female of total income of female
assessee assessee
of total income of persons of total income of persons
aged 65 years & above aged 65 years & above
On the first Tk. 375,000 Nil On the first Tk. 375,000 of Nil
of total income of person total income of person with
with disability disability
On the first Tk. 425,000 Nil On the first Tk. 425,000 of Nil
of total income for total income for gazetted
gazetted war wounded war wounded freedom
freedom fighters fighters
On the next Tk. 400,000 10% On the next Tk. 400,000 of 10%
of total income total income
On the next Tk. 3,000,000 25% On the next Tk. 3,000,000 25%
of total income of total income
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

The exemption limit for parents of any person with disability has been
increased to Tk. 275,000 from Tk. 250,000 for father and Tk. 325,000 from
Tk. 300,000 for mother. However only one parent can enjoy the benefit of
the increased exemption limit.
1.2 Surcharge on individual assessee [Finance Act, 2016]
The surcharge on tax applicable for individual assessees has been restructured.
The following table shows a comparative analysis of the surcharge applicable
on individual assessee based on his/her net wealth between Assessment Year
2016-2017 and 2015 2016
Assessment Year 2016-2017 Assessment Year 2015-2016

Value of net wealth Rate of Value of net wealth Rate of
surcharge surcharge
Up to Tk. 2.25 crore Nil Up to Tk. 2.25 crore Nil
More than Tk. 2.25 10% More than Tk. 2.25 10%
crore up to Tk. 5 crore crore up to Tk. 10 crore
More than Tk. 5 crore 15% More than Tk. 10 crore 15%
up to Tk. 10 crore up to Tk. 20 crore
up to Tk. 15 crore up to Tk.30 crore
up to Tk. 20 crore
More than Tk. 20 crore 30%
1.3 Corporate tax rate [Finance Act, 2016]
The following table shows a comparative analysis of the corporate tax rate
structure between Assessment Years 2016 - 2017 and 2015 2016
Sl. Applicable for Assessment Year Assessment Year

2016-2017 2015-2016
1 Non-publicly traded company 35% 35%

(not listed in stock exchange)
2 Publicly traded company 25% 25%
(listed in stock exchange)
3 Publicly traded bank, 40% 40%
insurance company and
financial institution
(except for merchant bank)

Sl. Applicable for Assessment Year Assessment Year
2016-2017 2015-2016
4 Non-publicly traded bank, 42.5% 42.5%

insurance company and
financial institution
5 Bank, insurance company and 40% 40%
financial institution obtaining
approval from Government in
2013
6 Merchant bank 37.5% 37.5%
7 Cigarette manufacturing 45% 45%
company
8 Biri, jorda, gul and other 45% Not specified
tobacco related products
manufacturing company
9 Mobile phone operator 45% 45%
company
1.4 Definitions [Section 2]
u Income [Section 2(34)]: Section 2(34) has been replaced

including new areas such as any amount subject to deduction or
collection of tax at source, any amount on which tax is imposed
and any amount treated as income under the Ordinance into the
scope of income. However, bonus share will continue to be outside
the scope of tax.
u Person [Section 2(46)]: Section 2(46) has been replaced scoping

in any trust, fund and entity as person.
u Tax day [Section 2(62A)]: A new section has been inserted

defining the tax day for different class of assessees based on their
last date of submission of income tax return.
The definitions have been elaborated in Chapter 3 Important definitions.
1.5 Charge of additional tax [Section 16B]
Section 16B regarding charge of additional tax has been replaced. As per the
replaced section, the imposition of additional tax for failure to issue, declare
or distribute dividend or bonus share has been repealed. The requirement
to pay additional tax for employing a non-Bangladeshi citizen / expatriate
during the income year without prior approval of the Board of Investment or
any competent authority has been retained.

1.6 Charge of minimum tax [Section 16BBB]
Section 16CCC regarding charge of minimum tax has been repealed and
new Section - 16BBB has been inserted stating minimum tax will be charged
as per the provisions of the Ordinance. The provisions regarding minimum
tax has been stated in Section 82C.
1.7 Charge of excess profit tax [Section 16C]
Section 16C regarding excess profit tax charged to banking companies has
been repealed.
1.8 Un-explained investments, etc., deemed to be income [Section 19]
2 changes have been made in Section 19. A summary of the changes are
given below
u Section - 19(11): A proviso regarding benefit or advantage of

cancellation of indebtedness has been added. If margin loan or
interest on margin loan for investment in shares, debentures,
mutual funds or other securities of an individual assessee is waived
by a TREC holder, up to Tk. 1,000,000 of such waived amount will
not be deemed as income. However, any waived amount exceeding
Tk. 1,000,000 will be deemed as income under income from other
sources.
u Section - 19(29): The time period for payment for purchase of

materials on credit for construction of building or house property
by any real estate business has been extended upto 2 years from
the end of the income year in which purchase is made. If payment
is not made within the stipulated time, such liability will be
treated as deemed income of the following income year under
income from other sources.
1.9 Collection, deduction and credit of VAT [Section 30 (aa)]
The requirement of collection or deduction and credit of applicable VAT

for any payment to be eligible for deduction from income from business or
profession has been repealed.
1.10 Salary paid to employee who has not obtained TIN [Section 30 (aaa)]
A new clause (aaa) has been added stating that any salary paid to an employee
who is required to but has not obtained 12 digit TIN, would not be admissible
as deduction from income from business or profession.
1.11 Allowable limit of perquisite [Section 30 (e)]
The limit of perquisite paid to an employee which is allowable as deduction

from income from business or profession has been extended to Tk. 475,000

from Tk. 450,000. If an employee is a person with disability, such limit has
been set at Tk. 2,500,000.
1.12 Allowable limit of overseas travelling expenditure [Section 30 (k)]
The limit of overseas travelling expenditure which is allowable as deduction

from income from business and profession has been extended to 1.25% from
1% of disclosed turnover.
1.13 Credit of income from tax [Section 44 (2)]
The exemption of income from tax has been restructured. A summary of the
provisions regarding exemption and credit of income tax is given below
The eligible amount for tax credit will be the lowest of the following amounts -
u The sum of amounts specified in Sixth Schedule, Part B (excluding

paragraph 15 and 16)
u 25% of total income excluding
Any income eligible for tax exemption or a reduced rate

under Section 44(4)
Any income under Section - 82C(2)(a)
u Tk. 15,000,000
The resident and non-resident Bangladeshi assessees will be entitled to tax

credit as per the following slab instead of fixed 15% as before.
Total income Amount of credit

Up to Tk. 1,000,000 - 15% of eligible amount
Exceeds Tk. 1,000,000 - 15% on the first Tk. 250,000 of the eligible amount
up to Tk. 3,000,000
- 12% on the rest of the eligible amount
Exceeds Tk. 3,000,000 - 15% on the first Tk. 250,000 of the eligible amount
- 12% on the next Tk. 500,000 of the eligible amount
- 12% on the rest of the eligible amount
1.14 Non-eligibility for tax exemption or reduced rate of tax [Section 44(5)]
A new Sub-section (5) has been inserted identifying the following incomes
as non-eligible for tax exemption or reduced rate of tax
u If a person fails to submit return of income under Section 75, the

income for the relevant income year

u If any expenditure is disallowed under Section 30, income of the
relevant source or person
1.15 Deduction at source from interest or profit on securities [Section 51]
Section 51 has been replaced. The requirement of 5% tax to be deducted

at source from interest or discount on Government securities (except for
Treasury bond and Treasury bill) has been retained and 5% tax to be deducted
at source from profit or discount on Government securities based on Islamic
Principles has been introduced.
1.16 Deduction at source from payment to contractors, payment of royalties

and certain services [Section 52, 52A, 52AA; Rule - 16]
The provisions regarding deduction of tax at source from payment to

contractors etc., payment of royalties etc. and certain services have been
restructured by replacing Section 52, 52A, 52AA and Rule 16.
u Section 52 and Rule 16:
Any payment to any resident assessee regarding the following

items have been scoped in to this provision
Execution of a contract (except for providing or

rendering a service mentioned in any other section of
Chapter VII of the Ordinance)
Supply of goods
Manufacture, process or conversion
Printing, packaging or binding
The applicable rates for deduction of tax have been elaborated in Rule 16.
u Section 52A:
Any payment to any resident assessee regarding royalties,

franchise, fee for using license, brand name, patent, invention,
formula, process, method, design, pattern, know-how, copyright,
trademark, trade name, literary / musical / artistic composition,
survey, study, forecast, estimate, customer list or any other
intangibles have been scoped in to this provision.
u Section 52AA:
Any payment to any resident assessee regarding certain services

has been scoped in to this provision.
The updated rates of tax to be deducted at source from contractors etc. have
been elaborated in Point 1.43. The updated rates of tax to be deducted at

source from royalties etc. under Section 52A and certain services under
Section 52AA have been incorporated in Chapter 18 Tax deducted at source.
The following persons have been specified to be responsible for deduction of

tax while making the above payments
Government, any Government Project, program or activity having

authority, corporation or body financial or operational involvement of
the Government
Jointventure or a consortium Company
Co-operativebank Co-operative society
Financial institution Non-Government Organization registered
with the NGO Affairs Bureau
School, college, institute, Hospital,clinic, diagnostic center
university
Trustor fund Firm
Public-private partnership Foreign contractor, foreign enterprise,
association / body established outside
Bangladesh
Anyartificial juridical person
not mentioned above
Rate of tax to be deducted will be based on Base Amount which will be the
highest of the following amounts
Contract value
Bill or invoice amount
Payment (including transfer, credit or adjustment of payment)
If there are multiple payments in an income year within the scope of Section
52 / Section 52A / Section 52AA, the aggregate amount will be considered
as payment under the respective section while calculating base amount.
The rate of tax to be deducted at source will be 50% higher if the payee does
not have 12 digit TIN.
1.17 Collection of tax from cigarette manufacturers [Section - 52B]
Section 52B has been replaced, repealing the requirement of collection of

3% tax on Maximum Retail Price (MRP) while collecting VAT.
1.18 Deduction at source from interest on savings instrument [Section 52D]
Section 52D has been replaced with savings instruments of approved

superannuation fund, pension fund, gratuity fund, recognized provident

fund, workers profit participation fund being scoped in for deduction of tax
at source at 5%.
1.19 Deduction at source on income from WPF [Section 49(oo), 52DD]

A new clause 49(oo) has been inserted bringing any income derived from
payment from workers participation fund (WPF) within the scope of tax
deducted at source.
A new Section 52DD has been inserted making any person paying any WPF
beneficiary responsible for deduction of tax at source at 5%.
1.20 Collection of tax from travel agent [Section 52JJ]
Section 52JJ has been replaced. The requirement of tax to be deducted
at source at 0.30% of the total value of tickets or air cargo charge has been
retained.
A new provision has been made stating that tax will be deducted at source
from incentive bonus, performance bonus or any other benefits paid in
relation to such sale of tickets or bill for air charge at the following rate
Amount of incentive bonus,performance bonus or any other benefits (A)
/Amount of commission or discount or any other benefits (B)x Amount of
source tax on commission or discount or any other benefits (C)
1.21 Deduction of tax at source from receipts in respect of international phone
call [Section- 52R]
The rate of tax to be deducted at source by any bank while making any
payment to any International Gateway (IGW) Services Operators has been
changed to 1.5% from 1%.
The rate of tax to be deducted at source by any IGW Services Operator while
making any payment to any Interconnection Exchange (ICX), Access Network
Services (ANS) or any other person having agreement with Bangladesh
Telecommunication Regulatory Commission (BTRC) has been changed to 7.5%
from 5%.
1.22 Collection of tax from export [Section- 53BB, 53BBBB]
The rate of tax to be deducted at source from export of knit wear, woven
garments, terry towel, carton and accessories of garments industry, jute
goods, frozen foods, vegetables, leather goods, packed foods and any goods
except for the mentioned ones has been changed to 1% from 0.80%.
1.23 Deduction or collection of tax at source from courier business of a non
resident [Section- 53CCC]
A new section has been inserted making any company working as local agent
of a non-resident courier company responsible to deduct or collect tax in
advance at 15% on the amount of shipment service charge outside Bangladesh.

1.24 Deduction or collection at source from commission, discount or fees
[Section 53E]
Sub-section (2) has been replaced making 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,
responsible for collection of tax at the following rate
Selling price of the company to the distributor or the other person (B) x 6%
(C) x Tax rate of 5%
1.25 Deduction at source from interest on saving deposits and fixed deposits,
etc. [Section 53F]
Sub-section (2) has been replaced. 5% tax to be deducted at source from
interest or share of profit on any saving deposits, fixed deposits, term deposit
maintained by any fund with any scheduled bank, a co-operative bank,
bank run on Islamic principles or non-banking financial institution, leasing
company or housing finance company has been introduced.
1.26 Collection of tax from persons engaged in real estate or land development
business [Section 53FF]
Sub-section (a)(iii) and (aa)(iii) have been replaced. The tax rate to be
collected based on the area of situation of the building or apartment has
been restructured as below
Area of situation Building or apartment Building, apartment or

(except for certain areas) constructed for space constructed for
residential purpose non-residential purpose
Dhaka South City Tk. 1,000 per square Tk. 3,000 per square
Corporation, Dhaka meter meter
North City Corporation
and Chittagong City
Corporation
Any other city Tk. 700 per square Tk. 2,500 per square
corporation meter meter
Any other area Tk. 300 per square Tk. 1,000 per square
meter meter
1.27 Deduction from income of non-residents [Section - 56]
Section 56 has been replaced restructuring the source of income and

applicable rate of tax to be deducted at source for non-residents. The
updated sorces of income and rates of tax to be deducted at source have
been incorporated in Chapter 18 Tax deducted at source.

1.28 Consequence of failure to deduct, collect or deposit tax at source
[Section 57]
Section 57 has been replaced restructuring the failures related to deduction

of tax at source and relevant consequences. A summary of such failures and
the relevant consequences are given below
Failure Payment of default Period for which additional

/ Amount on which amount of 2% per month
additional amount has to be paid
will be calculated
Failure to deduct The amount of From the due date of the
or collect tax at tax required to be deduction / collection to the
source deducted or date of the payment of the
collected amount to the credit of the
Government
Deduction or The amount of From the due date of the
collection of tax at shortfall deduction / collection to the
a lesser rate or in date of the payment of the
lesser amount amount to the credit of the
Government
Failure to pay The amount or part From the date of deduction
the deducted or of it which has or collection to the date of
collected amount not been paid to payment of the amount to
or part of it to the credit of the the credit of the
the credit of the Government Government
Government
1.29 Consequence of issuance of certificate of tax deduction or collection

without actual deduction or collection or payment [Section 57A]
A new section has been inserted making any person personally liable for any
default, if such person has not deducted, collected or paid to the credit of
the Government tax to be deducted at source but has issued a certificate of
deduction or collection.
1.30 Advance tax on certain income [Section 68A]
A new section has been inserted imposing advance tax on cigarette

manufacturers to be paid at 3% on net sale price (gross sale VAT and
supplementary duty) in every month.
1.31 Advance tax for the owners of private motor car [Section 68B]
A new section has been inserted imposing advance tax on every person owning
a private motor car. However certain persons have been relieved from the
requirement of payment of such advance tax. The provisions have been
elaborated in Chapter 26.3 Advance tax on private motor car owners.

1.32 Interest payable by the assessee on deficiency in payment of advance tax
[Section 73]
Section 73 has been replaced. A simple interest of 10% per annum has been
imposed on any shortfall of sums of advance tax paid and tax deducted or
collected at source (instead of advance tax paid based on own estimate,
as earlier) from 75% of tax determined on regular assessment / provisional
assessment / payment of tax under Section 74. However rate of interest
will be 50% higher if return of income is not filed on or before tax date.
1.33 Delay interest for not filing return on or before the Tax Day [Section 73A]
A new section has been inserted imposing a delay interest of 2% per month
on the difference between the assessed tax and the sum of advance tax paid
and tax deducted or collected at source, if an assessee fails to file a return
of income under Section 75 on or before the Tax Day.
1.34 Return of income [Section 75]
Section 75 has been replaced restructuring the provisions regarding filing of

return of income. The following persons have been specifically scoped in to
the list of persons for whom filing of return has been made mandatory
u Co-operative society
u Firm
u Association of persons
u Shareholder director or a shareholder employee of a company
u Partner of a firm
u Any 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, if the employee, at any time in the
income year, draws a basic salary of Tk. 16,000 or more
u Any person (except for an institution established solely for

charitable purpose or a fund) who has an income during the income
year which is subject to tax exemption or lower tax rate under
Section - 44
u Any person registered with the Board as an income tax practitioner
u Any person who serves in the board of directors of a company or a

group of companies

The filing of return by the following persons have been made voluntary at
their discretion as it has not been made mandatory for them
u Educational institution receiving Government benefits under

Monthly Payment Order (MPO)
u Public university
u Fund
u Any class of persons which the Board, by order in official gazette,

has made exempt from filing the return
The date of filing of return of income for all assessee has been specified to
be on or before the tax day.
1.35 Return of withholding tax [Section 75A]
Section 75A has been replaced restructuring the provisions regarding filing
of return of withholding tax. Co-operative societies and non-Government
organizations registered with NGO Affairs Bureau have been scoped in along
with companies who are required to file a return of withholding tax.
The timeline for filing of return of withholding tax has been fixed semi-
annually first one by 31 January of the year of deduction / collection and
second one by 31 July of the following year of deduction / collection.
1.36 Audit of return of withholding tax [Section 75AA]
A new section has been inserted introducing audit for return of withholding
tax. Upon receiving approval from the Board, the DCT will select a number
of return of withholding tax filed under Section 75AA and audit in respect
of whether tax has been deducted, collected and paid to the credit of the
Government as well as whether the certificate of tax deduction or collection
has been furnished appropriately.
1.37 Certificate in place of return [Section 76]
Section 76 allowing filing of a certificate instead of return of income if the

total income of an assessee during the income year consisted of income only
from salaries or income from which full tax has been deducted has been
repealed.
1.38 Statements of assets, liabilities and lifestyle [Section 80]
Section 80 has been replaced restructuring the provisions regarding

furnishing of statements in respect of total assets, liabilities and expenses
along with return of income. The following conditions have been introduced,
which makes it mandatory for every individual assessee (fulfilling such
conditions) to submit such statements

u Having gross wealth exceeding Tk. 2,000,000 on the last date of
the income year
u Ownership of a motor car
u Investment in a house property or an apartment in the city

corporation area
Individual assessees (except for shareholder directors of a company) have

been given an option not to submit such statements if they have income from
salary or business or profession which does not exceed Tk. 300,000 in the
income year.
1.39 Minimum tax [Section 82C]
Section 82 has been replaced shifting the focus from final discharge of tax
liability to minimum tax. The concept of minimum tax based on source of
income has been introduced along with minimum tax based on class of assessee.
Minimum tax from sources referred to in Section - 52, 52A, 52AAA, 52B,
52C, 52D, 52JJ, 52N, 52O, 52R, 53, 53AA, 53B, 53BB, 53BBB, 53BBBB, 53C,
53CCC, 53DDD, 53EE, 53F, 53FF, 53G, 53GG, 53H, 53M, 53N and 55 has been
determined to be the amount of tax deducted or collected from such sources.
Minimum tax based on class of assessee for firm or company (previously

included in Section 16CCC) has been restructured imposing 1%, 0.75% and
0.60% tax on the gross receipts respectively on manufacturer of tobacco
related products, mobile phone operators and other cases.
The ultimate minimum tax for assessee has been determined to be the higher
of minimum tax based on class of assessee and minimum tax based on source
of income.
1.40 Sixth Schedule - Part A: Exclusions from total income
The changes in Sixth Schedule, Part A has been summarized below
u Para 21(d) has been replaced making up to Tk. 50,000 received

from workers participation fund exempted from tax [Para 21(d)]
u Para 32A has been replaced scoping out interest from wage
earners bond being eligible from exemption from tax [Para 32A]
u The exemption limit for any income derived from Small and Medium
Enterprise engaged in production of goods has been extended to
Tk. 3,600,000 from Tk. 3,000,000 [Para 39]

CHANGES IN INCOME TAX RULES, 1984
[SRO 259-AIN/TAX/2016 DATED 10 AUGUST 2016]
1.41 Time limit for payment of tax deducted at source [Rule 13]
Rule 13 has been replaced amending the time limit for payment of tax
deducted or collected at source to the credit of the Government. The
amended timeline is stated below
Time of deduction or Date of payment to the credit of the

collection 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
1.42 Manner of payment of tax deducted at source [Rule 14]
Rule 14 has been replaced. The option of paying tax deducted or collected at
source with respect to supply of goods or execution of contract, professional
or technical services fee, house property and commission, discount or fees
by issuing cheque in favor of the DCT has been repealed.
1.43 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 to contractors etc. under Section - 52. The
updated rates have been stated below
Payment made against execution of a contract Rate of deduction

of tax
Base amount
Does not exceed Tk. 200,000 Nil
Exceeds Tk. 200,000, up to Tk. 500,000 1%
Exceeds Tk. 500,000, up to Tk. 1,000,000 2%
Exceeds Tk. 1,000,000, up to Tk. 2,500,000 3%
Exceeds Tk. 100,000,000 7%

Payment made for supply of goods, manufacturing, Rate of deduction
processing, conversion, printing, packaging, binding of tax
Base amount
Does not exceed Tk. 2,000,000 3%
Exceeds Tk. 10,000,000 5%
Payments made to following persons 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 for 1%
petrol pump)
Payment for oil supplied by any company engaged in 3%
oil refinery
Gas transmission company 3%
Gas distribution company 3%
1.44 Collection of tax from importers [Rule 17A]
Rule 17A has been amended imposing 5% tax to be collected at source from
import of coal.
1.45 Medical expenses [Rule - 33I]
The exemption limit of Tk. 1,000,000 per annum has been introduced
regarding medical expense or allowance for a person with disability. Medical
expense reimbursed to an employee (except for shareholder director) for
surgery relating to heart, kidney, eye, liver and cancer has been exempted
from tax.
1.46 Rate of allowances in respect of expenditure on distribution of free

samples [Rule 65C]
Rule 65C has been replaced restructuring the limit of admissible expenditure
in respect of distribution of free sample. The updated limits have been
stated below

Turnover Pharmaceutical Food, cosmetics Other
industry and toiletries industries
industries
Up to Tk. 50,000,000 2% 1% 0.5%
Exceeding Tk. 1% 0.5% 0.25%
50,000,000, up to
Tk. 100,000,000
In excess of Tk. 0.50% 0.25% 0.1%
100,000,000
CHANGES INTRODUCED BY SRO
1.47 Reduced rate of tax on income from export of jute industry [SRO 205 -
AIN/IT/2016]
The jute goods manufacturing industry has been given the benefit of reduced
rate of tax on income from export of such jute goods as stated below
u For company: 10%
u For other assessees: Highest rate will be 10%
This reduced rate will be applicable for assessment years 2016 2017,
2017 2018, 2018 2019 and 2019 2020.
1.48 Reduced rate of tax for jute industry [SRO 258 - AIN/IT/2016]
The jute goods manufacturing industry has been given the benefit of reduced
rate of tax as stated below
u For company: 10%
This reduced rate will be applicable for assessment years 2016 2017,
2017 2018, 2018 2019 and 2019 2020.
1.49 Reduced rate of tax deducted at source for export [SRO 257 - AIN/
IT/2016]
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 2016 to 30 June 2017.
1.50 Reduced rate of tax deducted at source for jute industry [SRO 207 - AIN/
IT/2016]
The rate of tax to be deducted at source from export of jute goods by jute

goods manufacturers under Section 53BB has been reduced to 0.60% from
1% for the period of 1 July 2016 to 30 June 2019.
1.51 Reduced rate of tax on income from export of knit wear and woven
garments [SRO 208 - AIN/IT/2016]
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
u For company: 20%
This reduced rate will be applicable for assessment year 2016 2017.

2 Major changes in Value Added Tax (VAT)
2.1 Tariff for certain products and services
The tariff for certain products and services has been fixed by General Order
No 02 / VAT / 2016 dated 2 June, 2016. This General Order has been
amended later by General Order No 07 / VAT / 2016 dated 30 June, 2016.
2.2 VDS on certain services
VAT to be deducted at source on certain services has been fixed by General

Order No 06 / VAT / 2016 dated 2 June, 2016.
2.3 Truncated rate for certain services
Truncated rate of VAT for certain services has been fixed by SRO 180 AIN
/ 2016 / 756 / VAT.
2.4 Exemption from VAT
Certain goods and services have been exempted from VAT by SRO 176 AIN
/ 2016 / 752 / VAT.
The updated rates of VAT have been incorporated in Chapter 51 Scope of VAT and
specified rates.


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; 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 and any amount on which tax is imposed under any
provision of ITO, 1984.
Income Year [Section - 2(35)]: Income year means
u For a newly set up business: From the date of setting up the business to
following 30 June
u For a new source of income: From the date of existence to following 30

June
u For a discontinued business, dissolute unincorporated body, liquidated

company: From 1 July to the date of such discontinuation or dissolution
or liquidation
u For an unincorporated body: From 1 July to the date of retirement or

death of a participant
u 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
u Bank, insurance or financial institution: From 1 January to 31 December
u 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.
From 1 July, 2016 the income year for all assessee (except for bank, insurance and
financial institutions) will be 1 July to 30 June and the assessment year will be
following July June. From 1 July, 2016 the income year for all bank, insurance
and financial institutions will be 1 January to 31 December and the assessment
year will be 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
charge leviable or payable under the Ordinance.
Tax Day [Section - 2(62A)]: Tax day means -
u Assessees except for company: 30 November following income year
u Company: 15th day of 7th month following income year
u 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 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
u If he / she stays in Bangladesh for a period of, or for a period amounting

in all to 182 days or more in that year or
u For a period of, or periods amounting in all to, 90 days or more in that
income year having previously been in Bangladesh for a period of, or
periods amounting in all to 365 days or more during four years preceding
that year.
Hindu Undivided Family, Firm, Other Association of Persons Such persons will
be resident if its 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 received, accrued, arising or income
deemed to be received, accrued, arising (income received, accrued,
in Bangladesh + income accrued or arising arising or deemed to be
outside Bangladesh) received, accrued, arising in
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
u Salaries
u Interest on securities
u Income from house property
u Agricultural income
u Income from business or profession
u Capital gains
u 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 Overtime Compensation
assistance
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
u Basic salary
u Dearness allowance
u Overtime
u Bonus
u 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]
u Rent free accommodation: rental value of accommodation or 25% of

basic salary, whichever is less [Rule 33B]
u Accommodation at a concessional rate: rental value of accommodation

or 25% of basic salary - rent actually paid [Rule 33B]
u Conveyance allowance receivable in cash with no conveyance facility:

amount in excess of Tk. 30,000 [Rule 33C]
u Conveyance provided for personal or private use: 5% of basic salary or

Tk. 60,000, whichever is higher [Rule 33D]
u Additional conveyance allowance along with conveyance facility: 5% of

basic salary or Tk. 60,000, whichever is higher + conveyance allowance
received [Rule 33E]
u 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
u Entertainment allowance: entire amount (nothing to be added for free

tea, coffee, beverages) [Rule 33H]
u 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
u Other benefits (such as servant allowance, children education allowance,

utility bills): entire amount
u Fees and commission
u Accrued salary
u Advance salary
u Leave encashment
u Profit in lieu of salary
Compensation for termination or modification of terms of

employment
Employers contribution to recognized provident fund
Interest on recognized provident fund: amount in excess of

1/3 of basic salary or at 14.5% rate whichever is lower (Sixth
Schedule, Part A, Para 25)
Unrecognized provident fund: accumulated employers

contribution + interest (at the time of retirement)
Employers contribution to recognized superannuation fund
Employers contribution to recognized gratuity fund etc.
Employers contribution to life insurance policy
Gratuity: amount in excess of Tk. 2 crore 50 lakh (Sixth

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

u Any income from a provident fund or workers participation fund
established under Provident Fund Act, 1925 or Companies Profits
(Workers Participation) Act, 1968 respectively [Para 4]
u Any special allowance, benefits or perquisite specifically granted to

meet official expenses [Para 5]
u Pension received [Para 8]
u Gratuity received if it does not exceed Tk. 2 crore 50 lakh [Para 20]
u Any receipt from a provident fund (under Provident Fund Act,

1925), recognized provident fund, superannuation fund or workers
participation fund (under Companies Profits (Workers Participation)
Act, 1968) [Para 21]
u Interest on recognized provident fund if it does not exceed 1/3 of basic

salary or interest amount calculated at 14.5% per annum [Para 25]
u 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
u Interest receivable on any Government security or any Government

approved security
u 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
u Commission or charges deducted from interest by a bank realizing the

interest on behalf of the assessee
u Interest payable on money borrowed for the purpose of investment in

the securities
u 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
u Land development tax or rent payable to Government
u Insurance premium paid
u Interest payable on mortgage or capital charge
u Annual charge except capital charge
u Ground rent
u Interest payable to bank or financial institution on borrowed capital for

acquisition, construction, reconstruction, repair or renovation of the
house property
u 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
u 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 under income from
other sources
u 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
u 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
u 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
u Agricultural income as defined in Section 2(1)
u Income from sale of machinery or plant used for agricultural purpose as

referred to in Section - 19(17) [Sale value (Original cost Written down
value)]
u 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 ((Original cost Written
down value) Scrap value]

u 60% of income derived from sale of tea grown and manufactured in
prescribed manner [Rule 31]
u Income from sale of rubber, tobacco, sugar or any other produce grown
and manufactured in prescribed manner [Rule 32]
However, agricultural income upto 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
u Land development tax or rent paid
u Tax, local rate or cess paid (not levied on income from agricultural
operation)
u 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
Adhi, barga, bhag, no deduction is allowed
u Insurance premium paid
u Repair and maintenance cost of capital assets
u Depreciation allowance on capital assets as per Third Schedule
u Interest paid on mortgage and capital charge
u Interest on borrowed capital
u Amount written off in books of accounts in respect of discarded,

demolished or destroyed machinery or plant, subject to certain
conditions
u Amount written off in books of accounts in respect of sale or transfer of

machinery or plant, subject to certain conditions
u 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

u Profits and gains of any business or profession
u Income from any trade or professional association or similar association
u Value of any benefit or perquisite arising from business or profession
u Receipt of any loss, bad debt, expenditure or trading liability as referred
to in Section - 19(15)
u Income from sale of building, machinery or plant used for business or
profession as referred to in Section - 19(16) [Sale value (Original cost
Written down value)]
u 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 ((Original
cost Written down value) Scrap value)]
u 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))
u Proportionate export value of exportable garments against transfer of
export quota as referred to in Section - 19(23) [Rule 30A]
u 40% of income derived from sale of tea grown and manufactured in
prescribed manner [Rule 31]
u Income from sale of rubber, tobacco, sugar or any other produce grown
and manufactured in prescribed manner [Rule 32]
11.1 Admissible deductions
The following deductions are permissible as per Section 29 and Section 30
in determination of income from business or profession
u Rent for the premises of business or profession [Section 29(1)(i)]
u Repair expense for hired premises of business or profession
[Section 29(1)(ii)]
u Interest paid or profit shared with a bank run on Islamic principles
in respect of capital borrowed Section 29(1)(iii)]
u Distribution of profit received from a bank run on Islamic principles
[Section 29(1)(iv)]
u Upto 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)]
u Repair expense for buildings, machinery, plants or furniture
[Section 29(1)(vi)]

u Insurance premium [Section 29(1)(vii)]
u Depreciation of building, machinery, plant or furniture as per Third

Schedule [Section 29(1)(viii)]
u Amortization of license fee as per Third Schedule [Section 29(1)

(viiia)]
u 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]
u Obsolescence allowance for building, machinery, plant or any

other fixed asset except imported software [Section 29(1)(xi);
Third Schedule, Para 10]
u 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)]
u Land development tax or rent, local rates or municipal taxes for

premises [Section 29(1)(xiii)]
u Employee bonus or commission, subject to certain conditions

[Section 29(1)(xiv)]
u A written off irrecoverable debt, subject to certain conditions

[Section 29(1)(xv)]
u A prior written off irrecoverable debt previously not allowed as

deduction, if established to have become irrecoverable [Section
29(1)(xvi)]
u 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)]
u Expenditure for scientific research except for capital expenditure

[Section 29(1)(xix)]
u Capital expenditure for scientific research, subject to certain

condition [Section 29(1)(xx)]
u 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)]

u 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)]
u 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)]
u Training expenditure on Bangladeshi Citizens for Board approved

schemes [Section 29(1)(xxiv)]
u Expenditure except for capital or personal expenditure, incurred

as a member of Government sponsored trade delegation for visits
abroad [Section 29(1)(xxv)]
u Annual membership subscription fee paid to a registered trade

organization or professional institution [Section 29(1)(xxvi)]
u Expenditure except for capital or personal expenditure, incurred

wholly and exclusively for the purpose of business or profession
[Section 29(1)(xxvii)]
u Expenditure of up to Tk. 475,000 on the provision of perquisites for

any employee [Section 30(e)]
u Entertainment expense allowance [Rule - 65]
Income, profits and gains Rate for allowance
On the first Tk. 10 lakh 4%
On the balance 2%
u Foreign travel expenditure of employees and their dependents for

holidaying and recreation, equivalent to lower of 3 months basic
salary or of actual expenditure, subject to certain conditions
[Rule 65A]
u Publicity and advertisement expenditure
u Allowance for expenditure on distribution of free samples [Rule 65C]

Industry Turnover Rate for
allowance
Pharmaceuticals Upto Tk. 5 crore 2%
industry
In excess of Tk. 5 crore upto 1%
Tk. 10 crore
In excess of Tk. 10 crore 0.5%
Food, cosmetics and Upto Tk. 5 crore 1%
toiletries industry
In excess of Tk. 5 crore upto 0.5%
Tk. 10 crore
In excess of Tk. 10 crore .25%
Other industries Upto Tk. 5 crore 0.5%
In excess of Tk. 5 crore upto 0.25%
Tk. 10 crore
In excess of Tk. 10 crore 0.1%
u 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)]
u Royalty, technical services fee, technical know-how fee, technical

assistance fee upto 8% of net profit disclosed in the statements of
accounts [Section - 30(h)]
u Incentive bonus upto 10% of net profit disclosed in the statements

of accounts [Section - 30(j)]
u Overseas travelling expenditure up to 1.25% of disclosed turnover

[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
u Payment of salaries without deduction of tax at source in

accordance with Section - 50 [Para - 30(a)]
u Payment without deduction and deposit of tax at source [Para - 30(aa)]
u Payment of salary to an employee who is required to but has not

obtained 12 digit TIN [Para - 30(aaa)]
u Payment of interest, salary, commission or remuneration by a firm

or an association of persons to any partner [Para - 30(b)]

u Brokerage or commission paid to a non-resident without deduction
of tax at source in accordance with Section 56 [Para - 30(c)]
u 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)]
u Perquisite for any employee exceeding Tk. 475,000 and Tk.

2,500,000 for any employee who is a person with disability, subject
to certain condition [Para - 30(e)]
u Expenditure in excess of allowable limit (stated in the section

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
u 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)]
u Royalty, technical services fee, technical know-how fee, technical

assistance fee in excess of 8% of net profit disclosed in the
statements of accounts [Para - 30(h)]
u Payment of salary or remuneration exceeding Tk. 15,000 otherwise

than by crossed cheque or bank transfer [Para - 30(i)]
u Incentive bonus exceeding 10% of net profit disclosed in the

statements of accounts [Para - 30(j)]
u Overseas travelling expenditure exceeding 1.25% of disclosed

turnover [Para - 30(k)]
u Payment of commission or discount to shareholder director

[Para - 30(l)]
u Payment exceeding Tk. 50,000 otherwise than by crossed cheque

or bank transfer, subject to certain conditions [Para - 30(m)]
u Payment of rent otherwise than by crossed cheque or bank transfer

[Para - 30(n)]

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 than 10 years 12%
at the time of purchase
(Calculated on original cost)
8 Ocean going ships (Second hand), age 10 years or more 24%
at the time of purchase
(Calculated on original cost)
9 Inland ships including steamers, motor vessels, iron 24%

or steel flats for cargo, wooden cargo boats, motor
launches and speed boats
10 Batteries, X-Ray and electronic therapeutic apparatus 20%

and accessories thereto
11 Machinery used in the production and exhibition of 20%
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%

Sl. Class of asset Rate
applicable
16 Imported computer software 10%
17 Professional & reference books 30%
18 Aircraft, aero-engine and aerial photographic apparatus 30%
19 Moulds used in the manufacture of glass or plastic goods 30%
or concrete pipe
20 Mineral oil concerns, below ground installation 100%
21 Mineral oil concerns, above ground installations (portable 30%
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 equipment 5%
11.4 Initial depreciation allowance

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

applicable
Building constructed Later of 10% of cost
in Bangladesh after Year of construction
30 June, 2012 First year of use
Year of commencement of
commercial production
Machinery or Later of 25% of cost

plant installed in Year of installation
Bangladesh after 30 First year of use
June, 2012 Year of commencement of

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

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

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

allowed
Resident cellular mobile phone operator For the Proportionate
company paying Spectrum Assignment period of amount in
fees, GSM license fees, license permission each year of
acquisition fees or license renewal fees permission
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
u Stock-in-trade (except for stocks and shares), consumable stores or raw

materials held for business and profession
u 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
u Any expenditure incurred solely in connection with the transfer
u Cost of acquisition
u Any capital expenditure incurred for improvement of the capital asset
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 gain Condition Exemption Reference

Transfer of capital asset Acquisition of If capital gain Section
used for business or a new capital exceeds the cost 32(5)
profession immediately asset within of acquisition of
before the transfer a year before the new asset,
or after the exemption up to
transfer date 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 gain Condition Exemption Reference
Transfer of Government None Full Section
securities 32(7)
Transfer of building or Entire capital Full Section
lands to a new company gain is invested 32(10)
registered under in the new
Companies Act, 1913 company
/ 1994 set up for an
industry
Transfer of capital Entire capital Full Section
asset of a firm to a new gain is invested 32(11)
company registered in the new
under Companies Act, company
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
u Dividend
u Interest
u Royalties
u Fees for technical services
u Income from letting of machinery, plant or furniture and inseparable
building
u Deemed Income [Section 19 (1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13, 21,
21A, 21B, 24, 26, 27, 28, 29 & 31)]
u 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
u Interest paid on money borrowed for acquisition of shares
u Expenditure incurred for earning relevant income, except for capital
expenditure and personal expenditure
u 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 head of income. A summarized list of such
incomes are specified below
Sl. Deemed income Head of Reference

income
1 Unexplained cash credit in the books of Income from Section -
accounts Other Source 19(1)
2 Under recorded value of investment in / Income from Section -
possession of bullion, jewelry and other Other Source 19(2)
valuable article
3 Unexplained expenditure Income from Section -
Other Source 19(3)
4 Unrecorded investment Income from Section -
Other Source 19(4)
5 Unrecorded money, bullion, jewelry and Income from Section -
other valuable article Other Source 19(5)
6 Income from discontinued business Income from Section -
Business or 19(6)
Profession
7 Dividend received Income from Section -
Other Source 19(7)
8 Fair market value Purchase price of asset Income from Section -
(except stock-in-trade, stock, shares) Other Source 19(8)
9 Salami or Premia Income from Section -
Other Source 19(9)
10 Goodwill money, compensation or damages Income from Section -
for cancellation or termination of contracts Other Source 19(10)
and licenses

income
11 Monetary value of benefit for cancellation of Income from Section -
indebtedness Other Source 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 Section -
Other Source 19(12)
13 Winnings from lotteries, crossword puzzles, Income from Section -
card games and other games Other Source 19(13)
14 Profits and gains from insurance business Income from Section -
Business or 19(14)
Profession
15 Amount received in respect of any loss, Income from Section -
bad debt, expenditure or trading liability Business or 19(15)
previously allowed as deduction Profession
16 [Sale proceed (original cost written down Income from Section -
value)] of building, machinery, plant used Business or 19(16)
for business or profession Profession
17 [Sale proceed (original cost written down Agricultural Section -
value)] of machinery and plant used for income 19(17)
agriculture
18 [Insurance / salvage / compensation Income from Section -
received ((original cost written down Business or 19(18)
value) scrap value)] of building, machinery, Profession
plant used for business or profession
19 [Insurance / salvage / compensation Agricultural Section -
received ((original cost written down income 19(19)
value) scrap value)] of machinery and plant
used for agriculture
20 [Sale proceed allowed capital expenditure] Income from Section -
of asset used for scientific research Business or 19(20)
Profession

income
21 Unpaid loan of maximum Tk. 500,000 not Income from Section -
paid within 3 years, subject to certain Other Source 19(21)
conditions
22 Loan or gift received which is transfer of Income from Section -
initial capital of a business or profession, Other Source 19(21A)
subject to certain conditions
23 Initial capital partly or fully transferred from Income from Section -
business or profession, subject to certain Other Source 19(21B)
conditions
24 Amount received from tenant which is not Income Section -
adjustable with rent from House 19(22)
Property
25 Export value of exportable garments against Income from Section -
transferred export quota Business or 19(23)
Profession
26 Paid-up capital received by a non-listed Income from Section -
company otherwise than by crossed cheque Other Source 19(24)
or bank transfer
27 Loan received by a company otherwise than Income from Section -
by crossed cheque or bank transfer Other Source 19(26)
28 50% of [Value of motor car / jeep purchased Income from Section -
or hired 10% of (paid-up capital + reserve + Other Source 19(27)
accumulated profit)] of a company
29 Loan exceeding Tk. 500,000 received by an Income from Section -
individual otherwise than by crossed cheque Other Source 19(28)
or bank transfer
30 Unpaid liability for 2 years in respect of Income from Section -
credit purchase of building construction Other Source 19(29)
material, subject to certain condition
31 Unspent amount of deduction allowed for Income Section -
repair and maintenance of house property from House 19(30)
Property
32 [Income shown in revised return income Income from Section -
shown in original return], subject to certain Other Source 19(31)
condition

TAX RATE
STRUCTURE
15 Personal tax rate structure

[Finance Act, 2016]
Every individual assessee (including non-resident Bangladeshi), Hindu undivided

family, partnership firm, association of persons, and artificial juridical person will
have to pay income tax on their total income according to the 6 tier income slabs
and tax rates for the Income Year 2015 - 2016 and Assessment Year 2016 2017 as
stated below
Assessment Year: 2016-2017

(Income Year: 2015-2016)
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. 375,000 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]
Capital gain Applicable tax

Capital gain arising as result Tax at rate applicable on total income
of a disposal of capital asset including capital gain
within 5 years from the date
of acquisition
Capital gain arising as result Lower of
of a disposal of capital asset Tax at rate applicable on total income
after 5 years from the date of including capital gain
acquisition 15% tax on the capital gain
15.2 Other tax rates

[Finance Act, 2016]
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, 2016]
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.

15.4 Tax on non-resident assessee
[Section 17; Second Schedule; Finance Act, 2016]
A person who is a non-resident is liable to pay tax on the incomes received,

deemed to have been received, accrued, arising, deemed to have been
accrued or arising to him / her in Bangladesh during an income year.
A non-resident Bangladeshi (NRB) is subject to pay tax at 6 tier income and

tax rate 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 assessees) 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 assessee or non-resident
Bangladeshi.
16 Corporate tax rate structure

[Finance Act, 2016; Second Schedule]
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 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

Sl. Applicable for Rate of tax
9 Mobile phone operator company 45%
10 Mobile phone operator company converted into public 40%
limited 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 transfer of stocks and shares of any 10%
company registered under Companies Act, 1994
13 Capital gain arising from transfer of capital assets other 15%
than 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 any Higher of
individual who is not
a Bangladeshi citizen 50% of income tax
(expatriate) without prior payable
approval of BOI or any
competent authority of the Tk. 5 lakh
Government
17 Minimum tax
Minimum tax is determined from the following 2 perspectives
u Based on class of assessee
u 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. [Section 82C (5)]
An assessee will not get refund of any minimum tax paid or will not be able to
adjust 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, 2016]
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; female, persons aged 65 years & above: Tk. 300,000; person
with disability: Tk. 375,000; 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 area Tk. 4,000
Assessees residing in other than city corporation Tk. 3,000
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

Manufacturer of Irrespective of profit or 1% of gross
cigarette, biri, chewing loss in the assessment year receipts
tobacco, smokeless
tobacco or any other
tobacco products
Mobile phone operator Irrespective of profit or 0.75%
loss in the assessment year of gross
receipts
Any other cases Irrespective of profit or 0.60%
loss in the assessment year of gross
receipts

Industrial undertaking Irrespective of profit or 0.10%
engaged in loss in the assessment of gross
manufacturing of year receipts
goods
For the first 3
income years since
commencement of
Gross receipt for minimum tax purpose will constitute the following -
u All receipt derived from sale of goods
u All fees, charges, commissions, discounts received for

rendering services or giving benefits
u 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
Execution of Supply of Manufacturing, Printing,
contract goods processing, packaging,
[Section - 52] [Section - 52] conversion binding
[Section - 52] [Section - 52]
Royalty and Clearing and Manufacture of Compensation
others forwarding cigarettes against
[Section 52A] service [Section 52B] acquisition of
[Section property by
52AAA] Government
[Section 52C]
Interest Travel agency Rental power Salaries of foreign
on savings [Section [Section 52N] technician serving
instruments 52JJ] in diamond
[Section 52D] cutting industry
[Section 52O]
International Import Shipping business Export of
phone call [Section - 53] of a resident manpower
[Section 52R] [Section 53AA] [Section 53B]

Source of income
Export of Transaction Export of any Sale of goods or
certain items of shares, goods except for property in public
[Section 53BB] debentures, certain items auction
mutual funds
or securities [Section [Section 53C]
by a member 53BBBB]
of stock
exchange
[Section
53BBB]
Courier business Export cash Commission or Interest on saving
of a non-resident subsidy remuneration of deposits and fixed
[Section [Section an agent of any deposits
53CCC] 53DDD] foreign buyer [Section 53F]
[Section 53EE]
Real estate Insurance Remuneration Transfer of
or land commission or fees of property
development [Section surveyors of [Section 53H]
business 53G] general insurance
[Section 53FF] company
[Section 53GG]
Transfer of Transfer Winnings from
securities or of share of lotteries,
mutual fund shareholder crossword
units by sponsor of stock puzzles, card
shareholders of exchanges games and others
a company [Section [Section - 55]
[Section 53M] 53N]
Deduction or collection of tax from the following sources has been scoped
out from minimum tax
u Contractor / subcontractor of oil company
u Oil marketing company, dealer or agent of such company (excluding

petrol pump station)
u Company engaged in oil refinery
u Company engaged in gas transmission or gas distribution
u Import of raw materials by an industrial undertaking for its own

consumption
u 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 Ultimate tax Reference
regular tax liability

Determination of
Determination of
Determination of
liability
minimum tax
liability
income
Regular source Regular At Gross Higher Section

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

Source of income Ultimate tax Reference
regular tax liability

Determination of
Determination of
Determination of
liability
minimum tax
liability
income
- Compensation Amount Amount Not Amount of tax Section
against on which of tax applicable deducted or 82C
acquisition of tax is deducted collected at (2)(d)
property by deducted or (Amount source is the
Government
[Section 52C]
or collected of tax ultimate tax
- Interest collected at source deducted liability
on savings at source or
instruments collected Income /
[Section 52D] at source loss from
- Export cash is the final such sources
subsidy [Section discharge cannot be set
53DDD] of tax off against
- Interest on liability) loss / income
savings deposit (respectively)
or fixed deposit
from regular
received by
certain entities sources
[Section
53F(1)(c),
53F(2)]
- Transfer of
property
[Section 53H]
Sources Regular As per Gross Higher Section
subject to manner exemption receipt of (a) 82C
exemption of provision from such minimum (4)(b)
tax or reduced / at sources tax liability (ii)
rate of tax applicable x Rate of and (b)
minimum
reduced
tax based regular tax
tax rate on class of liability
assessee
x [(1 -
Exemption
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 payment

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 tax Applicable Reference

zone
1 Salaries including salaries Average rate RZ Sec - 50
of Government employee applicable to
assessee based on
personal tax rate
structure
2 Discount on real value of Higher of maximum LTU Sec 50A
Bangladesh Bank bills rate or applicable
rate
3 Remuneration to Member Average rate RZ Sec 50B
of Parliament applicable to assessee
based on personal tax
rate structure
4 Interest on securities 5% LTU Sec 51
Subject to certain
conditions
5 Payment for execution As specified in Rule Dhk 2 Sec 52;
of contracts or sub- - 16 Ctg 2 Rule - 16
contract, supply of goods, Other - RZ
manufacturing, processing,
conversion, printing,
packaging, binding
Subject to certain condition
6 Payment for royalties, Base amount up to Dhk 8 Sec 52A
franchise, fee for using Tk. 25 lakh: 10% of Ctg 2
license, brand name, base amount Other -
patent, invention, formula, RZ76
process, method, design, Base amount
pattern, know-how,
copyright, trademark, trade exceeding Tk. 25
name, literary / musical / lakh: 12% of base
artistic composition, survey, amount
study, forecast, estimate,
customer list or any other
intangibles
Subject to certain condition

zone
7 Payment for following Base Base Dhk 8 Sec -
services amount amount Ctg 2 52AA
up to exceeding Other - RZ
Tk. 25 Tk. 25
lakh lakh
8 Advisory or consultancy 10% 12%
service
9 Professional service, 10% 12%

technical services fee,
technical assistance fee
10 Professional service by Base amount up to Dhk - 10 Sec -
doctors Tk. 25 lakh: 10% of Ctg 2 52AA
base amount Other - RZ
Base amount
exceeding Tk. 25
lakh: 12% of base
amount
11 Payment for following Base Base Dhk - 14 Sec -
services amount amount Ctg 2 52AA
up to exceeding Other - RZ
Tk. 25 Tk. 25
lakh lakh
12 Catering service
a) On commission 10% 12%
b) On gross amount 1.5% 2%
13 Cleaning service
14 Collection and recovery
agency
15 Management of events,
training, workshops etc.
16 Private security

zone
17 Supply of manpower
18 Indenting commission 6% 8%
19 Meeting fees, training 10% 12%
fees or honorarium
20 Credit rating agency 10% 12%
21 Motor garage workshop 6% 8%
22 Private container port or 6% 8%
dockyard service
23 Shipping agency 6% 8%
commission
24 Stevedoring / berth 10% 12%
operation commission
25 Transport service, car 3% 4%
rental
26 Any service not 10% 12%
mentioned in Chapter
VII, except for services
provided by bank,
insurance or financial
institutions
27 Mobile network operator, Base amount up to LTU Sec -
technical support service Tk. 25 lakh: 10% of 52AA
provider, service delivery base amount
agents engaged in mobile
banking operations Base amount
exceeding Tk. 25
lakh: 12% of base
amount
28 Clearing & forwarding 10% Dhk - 15 Sec -
agency commission Ctg 3 52AAA
Other - RZ
29 Manual cigarette 10% Dhk - 10 Sec 52B
manufacturer (Biri) Ctg 4
Other - RZ

zone
30 Compensation against 2% Dhk - 15 Sec 52C
acquisition of immovable Ctg 2
property situated in city Other - RZ
corporation, paurashava
or cantonment board area
31 Compensation against 1% Dhk - 15 Sec 52C
acquisition of immovable Ctg 2
property situated Other - RZ
outside city corporation,
paurashava or
cantonment board area
32 Interest on saving 5% Dhk - 10 Sec 52D
instruments Ctg 4
Subject to certain Other - RZ
conditions
33 Payment of workers 5% Ctg 2 Sec 52DD
participation fund Other - 3
34 Brick manufacturer Dhk - 7 Sec 52F
Ctg 4
One section brick field Tk. 45,000
Other - RZ
One and half section brick Tk. 70,000
field
Two section brick field Tk. 90,000
Automatic brick field Tk. 150,000
35 Commission of letter of 5% Dhk - LTU Sec 52I
credit Ctg 2
36 Travel agent 0.30% of airfare or Dhk - 4 Sec
Subject to certain cargo charge Ctg 2 52JJ
conditions
37 Renewal of trade license Dhk - 3 Sec 52K
Ctg 2
Dhaka North and Tk. 500
Other - RZ
South City Corporation
or Chittagong City
Corporation
Other City Corporation Tk. 300
Paurashava at any district Tk. 300
headquarter
Other paurashava Tk. 100

zone
38 Freight forward agency 15% Dhk - 6 Sec 52M
commission Ctg 3
Other - RZ
39 Rental power company 6% Dhk - 13 Sec 52N
Ctg 3
Other - RZ
40 Foreign technician serving 5% Dhk - 9 Sec 52O
in a diamond cutting
industry
41 Services from convention 5% Dhk - 4 Sec 52P
hall, conference center, Ctg 2
etc. Other - RZ
42 Services provided to 10% Dhk - 11 Sec 52Q
any foreign person by a
resident
43 International Gateway 1.5% Dhk 15 Sec 52R
(IGW) service operator
44 Interconnection Exchange 7.5%
(ICX), Access Network
Services (ANS), any other
person having agreement
with BTRC
45 Manufacturer of soft drink 4% Gazipur Sec 52S
and mineral or bottled Zone
water
46 Payment in excess of 5% LTU Sec 52T
premium paid on life
insurance policy
47 Local letter of credit (on 3% Ctg 2 Sec 52U
proceeds exceeding Tk. Coxs
500,000 Bazar 2
Subject to certain Other
conditions LTU
48 Payment to regulatory 10% LTU Sec 52V
authority by cellular
mobile phone operator
49 Importer 5% Dhk - 14 Sec 53;
(The rate may vary Ctg 1 Rule
subject to certain Other - RZ 17A
conditions)

zone
50 Rent payment for house 5% Dhk - 7 Sec 53A
property Ctg 2
Other - RZ
51 Shipping business of a Dhk - 10 Sec
resident Ctg 4 53AA
Other - RZ
Freight received or 5%
receivable in or out of
Bangladesh
Freight received or 3%
receivable from service
rendered between two or
more foreign countries
52 Export of manpower 10% Dhk - 4 Sec 53B;
Rule
17C
53 Export of knit wear, 1% Dhk - 4 Sec
woven garments, terry 0.70% for all goods 53BB;
towel, carton, garments (except for jute SRO - 257
accessories, jute goods, goods) till 30 June / AIN / IT
frozen foods, vegetables, 2017 / 2016;
leather goods, and packed 0.60% for jute SRO - 207
food goods till 30 June / AIN / IT
Subject to certain 2019 / 2016
conditions
54 Member of Stock 0.05% Dhk - 7 Sec
Exchanges Ctg 3 53BBB;
SRO 334
AIN / IT /
2011
55 Export of goods except 1% Dhk 4 Sec
for items specified in 0.7% till June 2017 53BBBB;
Section 53BB SRO - 257
Subject to certain / AIN / IT
conditions / 2016
56 Goods or property sold by 5% Dhk - 9 Sec 53C;
public auction 1% for auction of Ctg 4 Rule
tea Other - RZ 17D
57 Courier business of a non- 15% Dhk - 11 Sec
resident 53CCC

zone
58 Purchase of film, drama, 10% Dhk 12 Sec
TV or radio program 53D(1)
59 Performance in film, 10% Dhk 12 Sec
drama, advertisement, TV 53D(2)
or radio program
Subject to certain
condition
60 Export cash subsidy 3% Dhk 4 Sec
53DDD
61 Commission, discount, 10% Dhk - 12 Sec
fees Ctg 4 53E(1)
Other - RZ
62 Distributor or other 5% Dhk - 12 Sec
person purchasing goods Ctg 4 53E(2)
at a price lower than Other - RZ
fixed retail price
Subject to certain
condition
63 Commission or 10% Dhk - 6 Sec
remuneration paid to Ctg 3 53EE
agent of foreign buyer Other - RZ
64 Interest on savings Dhk - 1 Sec 53F
deposit, fixed deposit,
term deposit
If TIN is furnished 10%
If TIN is not furnished and 10%
deposit amount is up to
Tk. 100,000
If TIN is not furnished and 15%
deposit amount exceeds
Tk. 100,000
Public university, 10%
educational institutions,
ICAB, ICMAB and ICSB
Fund 5%
65 Real estate or land As specified in Dhk - 5 Sec
development business Section 53FF Ctg 4 53FF
Other - RZ
66 Insurance commission 5% LTU Sec 53G

zone
67 Fees etc. of surveyor 15% LTU Sec
of general insurance 53GG
company
68 Transfer of property As specified in Dhk Sec
Section 53H and Central 53H; Rule
Rule 17II survey 17II
zone
Ctg 4
Other - RZ
69 Lease of property 4% Dhk Sec
Subject to certain Central 53HH
conditions survey zone
Ctg 4
Other - RZ
70 Interest on deposit of 10% Dhk - 9 Sec 53I
Post Office Savings Bank Ctg 4
Account Other - RZ
71 Rental value of vacant 5% Dhk - 15 Sec 53J
land, plant or machinery Ctg 4
Other - RZ
72 Advertisement or airtime 4% Dhk - 5 Sec 53K
bill of newspaper, Ctg 3
magazine, private TV Other - RZ
channel, private radio
station, website
73 Transfer of securities 5% Dhk - 3 Sec 53M
or mutual fund units by Ctg 3
sponsor shareholder,
director, placement
holder of listed companies
74 Transfer of share of 15% Dhk - 3 Sec 53N
shareholder of Stock Ctg 3
Exchange
75 Signing money, 15% Dhk - 5 Sec 53P
subsistence money, house Ctg 2
rent etc. paid to land Other - RZ
owner by real estate
developer

zone
76 Dividend Dhk - 13 Sec 54;
Ctg 4 Rule - 19
Company 20%
Other - RZ
Assessee other than 10%
company, if TIN is
furnished
Assessee other than 15%
company, if TIN is not
furnished
77 Lottery 20% Dhk - 9 Sec 55
Ctg 3
Other - RZ
78 Payment to non 20% Dhk - 11 Sec 56
resident for advisory or
consultancy service
79 Payment to nonresident 20%

for pre-shipment
inspection service
for professional service,
technical services,
technical know-how or
technical assistance

for architecture, interior
design, landscape design
fashion design, process
design
82 Payment to nonresident for 20%

certification, rating etc.

for charge or rent for
satellite, airtime or
frequency , rent for
channel broadcast
for legal service

zone
for management
service including event
management
for commission
for royalty, license fee
or payments related to
intangibles
for interest
for advertisement
broadcasting
for advertisement making
91 Payment to nonresident 7.5%
for air transport or water
transport
92 Payment to non 7.5%
resident contractor
or sub-contractor for
manufacturing, processing
or conversion, civil work,
construction, engineering
or works of similar nature
supplier
for capital gain
for insurance premium
for rental of machinery,
equipment etc.
company for dividend

zone
98 Payment to any non 30%
resident person (except
for company) for dividend

artist, singer or player

for salary or remuneration

for exploration or drilling
in petroleum operation

for survey for oil or gas
exploration

for any service for making
connectivity between oil
or gas field and its export
point
104 Any other payments made 20%

to nonresident for any
other services
105 Any other payments to 30%

nonresident
106 Advance tax for As specified in Central Sec 68B

ownership of private Section 68B survey
motor car zone
107 Motor vehicle presumptive As specified in SRO Central SRO 160

tax 160 AIN / 2014 survey AIN /
zone 2014
108 Cargo or launch As specified in SRO Dhk - 5 SRO 162

presumptive tax 162 AIN / 2014 Ctg 3 AIN /
Other - RZ 2014

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 Set-off Carry forward to Limitations for

income set off against carry forward
following years
income
Income from N/A N/A N/A
salary
Interest on Against income from Cannot be carried N/A
securities any other head forward
Income Against income from Cannot be carried N/A
from house any other head forward
property
Agricultural Against income from Set off against Time limit: 6
income any other head except agricultural successive years
for income from income
capital gain Amount Limit:
None
Income from Against income from Set off against Time limit: 6
business or any other head except income from successive years
profession for income from same business or
House property profession Amount Limit:
Capital Gain None
Income from Against any other Set off against Time limit: 6
speculation income from income from successive years
business speculation business speculation
business Amount Limit:
Cannot be set off None
against any other head
of income
Capital gains Against any other Set off against Time limit: 6
income from capital capital gain successive years
gain
Amount limit:
Cannot be set off Amount exceeding
against any other head Tk. 5,000
of income
Income from Against income from Cannot be carried N/A
other sources any other head forward

Head of Set-off Carry forward to Limitations for
income set off against carry forward
following years
income
Income from Cannot be set off Cannot be carried N/A
any source against any other head forward
which is of income
exempted
from 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, 80]
The following persons are required file return of income -
u Whose total income during an income year exceeds the exemption limit
(i.e. the maximum amount which is not chargeable to tax)
u Who has been assessed to tax for any of the preceding three years
u Company
u Non-government organization registered with NGO Affairs Bureau
u Firm
u Association of person
u Shareholder director or a shareholder employee of a company
u Partner of a firm
u 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
u 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
u Owns a motor car
u Owns a membership of a club registered under VAT Act, 1991
u Runs any business or profession having trade license from a city
corporation, a paurashava or a union parishad;
u 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
u Registered with the Board as an income tax practitioner
u Has membership of a chamber of commerce and industries or a trade
association or body
u Runs for an office of any paurashava, city corporation, or is a Member of
Parliament
u Participant in a tender floated by the Government, semi-government,
autonomous body or local authority
u 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.
u Educational institution receiving Government benefits under Monthly
Payment Order (MPO)
u Public university
u Fund
u Any class of persons which the Board, by order in official gazette,
exempts 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
u Statement of assets, liabilities and expenses (including those of spouse,
minor children and dependents if they are not assessee), subject to
certain conditions
u Statement of expenses relating to lifestyle
Companies are required to furnish the following documents accompanying the
return of income
u Audited statement of accounts
u A reconciliation between the profit or loss shown in the accounts and the
income 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
the income year. The last date of filing return for a company is 15th day of the 7th
month following the end of income year.

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

[Section 75A]
The following persons are required to file return of withholding tax
u Company
u NGO registered with NGO Affairs Bureau
Such return has to be filed half yearly as stated below
Period of deduction Withholding Last date of filing

or collection at tax return
source
1 July to 31 First return 31 January of the relevant financial
December year
01 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]
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.
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.
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 car or a jeep, exceeding 3500cc Tk. 125,000
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
u Government and local Government
u Project, program or activity under the Government and the local

Government

u Foreign diplomat, diplomatic mission in Bangladesh, United Nations
and its offices
u Development partner of Bangladesh and its affiliated office or

offices
u Educational institution under the Monthly Payment Order of the

Government
u Public university
u Entity that is not a person as defined under Section - 2(46)
u Gazetted war-wounded freedom fighter
u 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
u Return, accounts and documents, if filed
u 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 (manually or electronically) fulfilling
certain conditions, and pays tax on the basis of such return, the DCT or other
authorized official will issue an acknowledgement receipt. Such acknowledgement
receipt will be deemed as assessment order.
After processing the return, the DCT will send the assessee a demand notice along
with an intimation specifying computed income, tax liability, tax credit allowed,
net tax payable or refundable and other particulars, within 30 days of computation.
Provided that no such intimation will be sent after 12 months from the end of the
financial year in which the return is furnished.
No demand notice requiring the assessee to pay more tax will be made unless he/
she has been given an opportunity of being heard.

The Board may select a number of returns filed under universal self-assessment
for the purpose of audit. However such a return would not be selected for audit
if it shows at least 20% higher income than the income assessed or shown in the
immediately preceding assessment year and fulfils the following conditions
u The return is accompanied by corroborative evidences in support of tax

exempted income
u It is accompanied by a copy of bank statement or account statement

supporting any sum or aggregate of sums of loan exceeding Tk. 5,00,000
taken from any person during the income year
u It does not show receipt of gift during the year
u It does not show any income chargeable to tax at a rate reduced under
Section 44
u It does not show or result any refund
If a new assessee deriving income from business or profession shows income at

least not less than 25% of the capital invested in such business or profession and
files return and pays tax accordingly, no question regarding the source of income
will be raised. However, the initial capital investment or any fraction of it cannot
be transferred within the income year in which the investment was made or within
5 years from the end of such 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 evidence, 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
u Where a person fails to file a return required by a notice under Section 77
u Where a person has not filed a return or revised return under Section 78
u 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 Source of income Rate of Period of

No. for exemption exemption
1 Industrial All income, profits 100% First 2 years
undertakings set and gains except
up in Dhaka and capital gain and
Chittagong divisions disallowance under
(excluding Dhaka, Section 30
Narayangonj,
Gazipur,
Chittagong,
Bandarban,
Rangamati and
Khagrachari)
between 1 July,
2011 and 30 June,
2019
Engaged in
production of active
pharmaceutical
ingredient industry

and radio 60% 3rd year
pharmaceutical
industry;
automobile
manufacturing
industry; barrier
contraceptive and
rubber latex; basic
chemicals or dyes
and chemicals;
basic ingredients of
electronic industry 40% 4th year
(e.g. resistance,
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
vegetables; radio-
active (diffusion)
application industry
(e.g. developing
quality or decaying
polymer or
preservation of
food or disinfecting
medicinal
equipment);

textile machinery; 20% 5th year
tissue grafting;
tyre manufacturing
industry or
other industrial
undertakings
specified by the
Government
- Subject to fulfilling
certain conditions
[Section 46B]
2 - Industrial All income, profits 100% First 2 years
undertakings set and gains except
up in Rajshashi, capital gain and
Khulna, Sylhet, disallowance under
Barisal and Section 30
Rangpur divisions
(excluding City
Corporation area)
and Bandarban, 70% 3rd year
Rangamati and
Khagrachari
between 1 July,
2011 and 30 June,
2019
- Engaged in 55% 4th year

production of active
pharmaceutical
ingredient
industry and radio
pharmaceutical
industry;
automobile
manufacturing 40% 5th year
industry; barrier
contraceptive and
rubber latex; basic
chemicals or dyes
and chemicals;
basic ingredients of
electronic industry
(e.g. resistance,

capacitor, 25% 6th year
transistor,
integrator
circuit); bi-cycle
manufacturing
industry; bio-
fertilizer; bio-
technology; 20% 7th to 10th year
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
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
manufacturing
industry or
other industrial
undertakings
specified by the
Government
certain conditions
[Section 46B]

3 - Physical All income, profits 100% First 2 years
infrastructure and gains except
facilities set up capital gain and
between 1 July, disallowance under 80% 3rd year
2011 and 30 June, Section 30
2019
- Includes deep sea 70% 4th year
port; elevated
expressway; flyover;
gas pipeline; hi-tech 60% 5th year
park; Information
and Communication
50% 6th year
Technology (ICT)
village or software
technology zone; 40% 7th year
Information
Technology (IT)
park; large water 30% 8th year
treatment plant
and supply through
pipeline; Liquefied 20% 9th year
Natural Gas (LNG)
terminal and
transmission line; 10% 10th year
mono-rail; rapid
transit; renewable
energy (e.g. energy
saving bulb, solar
energy plant,
windmill); sea or
river port; toll
road or bridge;
underground
rail; waste
treatment plant
or other physical
infrastructure
facilities specified
by the Government
certain conditions
[Section 46C]

4 - Industries Income from such 100% First 2 years
established on or industry
after 1 January,
2012 in the
Export Processing 50% Next 2 years
Zones of Dhaka
and Chittagong
divisions (except
in Bandarban,
25% Next 1 year
Rangamati &
Khagrachhari);
as mentioned in
the Bangladesh
Export Processing
Zones Act, 1980
(Section - 10) or the
Bangladesh Private
Export Processing
Zones Act, 1996
[SRO 219 AIN /

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

IT / 2012]

6 - Private power - Income Full 15 years from
generation from power the date
companies generation of starting
(except coal business operation
based electricity - Interest payable for income
generation on foreign loan from power
companies) starting - Royalties, generation
operation within 31 technical business
December, 2014 know-how
and technical No time limit
[SRO 211 AIN / assistance fees for other
IT / 2013] - Capital gain incomes
form transfer of
companys share
7 - Private coal - Income Full 15 years from
based electricity from power the date
generation generation of starting
companies signing business operation
contract within - Interest payable for income
30 June, 2020 and on foreign loan from power
starting commercial - Royalties, generation
production within technical business
30 June, 2023 know-how
and technical No time limit
[SRO 213-AIN / IT assistance fees for other
/ 2013] - Capital gain incomes
form transfer of
companys share
8 - Private power Income from power 100% First 5 years
generation generation business
50% Next 3 years
companies
(except coal 25% Nest 2 years
based electricity
generation
companies) starting
operation on or
after 1 January,
2015
[SRO 212 AIN /

IT / 2013]

9 - Bangladesh Import of goods, Full Period of the
Atomic Energy machineries, exemption project
Commission (BAEC); services and of tax
sub-contractors documents by BAEC to be
appointed by deducted
Russian company Bills for supply at source
Atomstroyexport of goods and
- Related to Ruppur execution of
Nuclear Power Plant contracts by
Construction project sub-contractors
[SRO 241 AIN / IT appointed by
/ 2016] Atomstroyexport
10 - Russian company Income from Full Period of the
Atomstroyexport execution of project
- Related to Ruppur contracts
Nuclear Power Plant
Construction project
[SRO 242 AIN /
IT / 2016]
11 - Renewable energy Income from such Full 5 years from
projects projects the date of
[SRO 228 AIN / commercialpro-
IT / 2009] duction
12 - Industrial Income from such 100% First 2 years
undertaking business
engaged in
production of rice
bran oil 50% Next 2 years
- Commencing
production within
1 July, 2012 to 30
June, 2019 25% Next 1 year
- Set up in Dhaka
and Chittagong
divisions (excluding
city corporation
area, Bandarban,
Rangamati and
Khagrachari
districts)
[6th Schedule, Part
A, Para 45]

13 - Industrial Income from such 100% First 3 years
undertaking business
engaged in
production of rice
bran oil 50% Next 3 years
- Commencing
production within
1 July, 2012 to 30
June, 2019 25% Next 4 years
- Set up in Rajshashi,
Khulna, Sylhet,
Barisal and
Rangpur divisions
(excluding city
corporation area)
and Bandarban,
Rangamati and
Khagrachari
districts
[6th Schedule, Part

A, Para 45]
14 - Cinema hall or Income derived 100% First 2 years
Cineplex set from such cinema
up in Dhaka hall or Cineplex
and Chittagong
50% Next 2 years
divisions (excluding
Bandarban,
Rangamati and
Khagrachari 25% Next 1 year
districts)starting
commercial
exhibition between
1 July 2012 and 30
June 2019
[6th Schedule, Part

A, Para 44]

15 - Cinema hall or Income derived 100% First 3 years
Cineplex set up in from such cinema
Rajshashi, Khulna, hall or Cineplex
Sylhet, Barisal and 50% Next 3 years
Rangpur divisions
and Bandarban,
Rangamati and 25% Next 4 years
Khagrachari districts
starting commercial
exhibition between
1 July 2012 and 30
June 2019
[6th Schedule, Part

A, Para 44]
16 - Software Income from such Full 1 July, 2008 to
development business 30 June, 2024
or Nationwide
Telecommunication
Transmission
Network (NTTN)
or Information
Technology Enabled
Services (ITES)
business
[6th Schedule, Part

A, Para 33]
17 - Business of corn or Income from such 50% Not specified
maize or sugar beet business
production
[6th Schedule, Part

A, Para 46]
18 - Export business Income from 50% Not specified
- All except company business of export
not registered in
Bangladesh
- Not enjoying any
other exemption
or reduction in tax
rate
[6th Schedule, Part

A, Para 28]

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

A, Para 39]
21 - Companies investing Income from such Full Period specified
in Bangladesh under company in the treaty /
any bi-lateral treaty contract
/ contract between
Bangladesh
Government
and any foreign
Government
or investment
organization
established by any
foreign Government
[SRO 32 - AIN / IT
/ 1990]
22 - Company Income donated to Upto low- Not specified
funds established er of
[6th Schedule, Part under Trust of - 20% of
A, Para 47] Prime Ministers income
Education of the
Assistance Act, compa-
2012) ny
- 8 crore
23 - NGO registered with Operation of micro Full Not specified
NGO Affairs Bureau credit
[6th Schedule, Part

A, Para 1A]

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

28 - Co-operative - Income from Full Not specified
society business of
agricultural or
rural credit;
[Section 47] cottage industry;
marketing of
agricultural
produce of
its members;
purchase of
agricultural
implements,
seeds, livestock
or other articles
intended for
agriculture for
the purpose of
supplying them
to its members;
such processing of
the agricultural
produce of its
members as
is ordinarily
employed by
a cultivator
to render the
agricultural
produce
marketable
- Income from
letting of godowns
or warehouse
for the purpose
of storage,
processing or
facilitating the
marketing of
commodities
belonging or
meant for sale to
its members
29 - Private agricultural Income from Full Not specified
college or private agricultural
agricultural educational
university activities
[6th Schedule, Part

A, Para 37]

30 - Educational All income except Full Not specified
institution interest and
- Enlisted for Monthly 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
[6th Schedule, Part

A, Para 52]
31 - Public university All income except Full Not specified
- Professional interest and
institute established dividend
under any law and
run by professional
body of Chartered
Accountants or Cost
and Management
Accountants
or Chartered
Secretaries
[6th Schedule, Part

A, Para 53]
32 - Local Government All income Full Not specified
[6th Schedule, Part

A, Para 3]
33 - Partner of a firm Share of capital Full Not specified
gain on which tax
[6th Schedule, Part has already been
A, Para 18] paid

34 - Individual earning Special allowance, Full Not specified
income from salary benefits or
perquisites granted
[6th Schedule, Part for official purpose
A] [Para 5]
35 Pension Full Not Specified
[Para 8]
36 Gratuity Upto Tk. Not specified
[Para 20] 2 crore 50
lakh
37 Interest credited Lower of Not specified
on accumulated - One
balance of third
recognized of the
provident fund basic
[Para 25] salary
- Interest
at max-
imum
14.5%
38 Payment form Full Not specified
provident fund
as per Provident
Funds Act, 1925
[Para 21]
39 Payment from Full Not specified
recognized
provident fund
[Para 21]
40 Payment from Full Not specified
approved
superannuation
fund
[Para 21]
41 Payment Up to Tk. Not specified
from workers 50,000
participation fund
established under
Bangladesh Labour
Act, 2006
[Para 21]

42 - Individual Foreign remittance Full Not specified
Bangladeshi Citizen brought in
[6th Schedule, Part Bangladesh as per
A, Para 48] existing laws
43 - Individual whose Agricultural income Up to Tk. Not specified
only source 2 lakh
of income is
agriculture
[6th Schedule, Part

A, Para 29]
44 - Indigenous Hillman Income from Full Not specified
of Rangamati, economic activities
Bandarban and undertaken in such
Khagrachari districts
districts
[6th Schedule, Part

A, Para 27]
45 - Foreign faculty Salaries and Full Not specified
members, teaching, allowances
research or library
staff members,
administrators,
officers, experts,
technicians, visiting
personnel of Asian
University for
Women
[SRO 17 - AIN / IT
/ 2009]
46 - Government All benefits and Full Not specified
employee allowances except
for basic salary,
[SRO 198 AIN / festival bonus and
IT / 2015] bonus
47 - Government Monetary award Full Not specified
employee received for
outstanding
[SRO 245 ain / contribution
IT / 2001] towards
Government

48 - Employees of Amount received Full Not specified
Government on voluntary
organization, retirement
local authority,
autonomous or
semi-autonomous
body including the
units or enterprises
controlled by it
[6th Schedule, Part
A, Para 26]
49 - Chief justice, All benefits and Full Not specified
judges of Appellate allowances except
Division of for basic salary
Bangladesh supreme
court, judges of
High Court Division
[SRO 227 AIN /
IT / 2011]
50 - Prime minister, All benefits and Full Not specified
Speaker, Minister, allowances except
Deputy Speaker, for basic salary or
State Minister, remuneration
Deputy Minister
and Advisor having
Ministerial status
and Members of
Parliament
[SRO 226 AIN /
IT / 2011]
51 - Expatriates Income from Full 3 years from
working in private working in private the date of
power generation power generation arrival in
companies companies Bangladesh
(except coal (except coal
based electricity based electricity
generation generation
companies) starting companies)
commercial
production within
31 December, 2014
[SRO 211 AIN /
IT / 2013]

52 - Expatriates working Income from Full 3 years from
in private coal working in the date of
based electricity private coal arrival in
generation based electricity Bangladesh
companies signing generation
contract within 30 company
June, 2020
[SRO 213 AIN /

IT / 2013]
53 - Expatriate Income from Full Period of the
employees and working in Ruppur project
consultants Nuclear Power
appointed by Plant Construction
Russian company project
Atomstroyexport
for Ruppur Nuclear
Power Plant
Construction project
[SRO 242 AIN / IT

/ 2016]
54 - Expatriates working Salary and Full 3 years from 13
in Dhaka Elevated allowances from August, 2012
Expressway PPP the project
project
[SRO 290 AIN /

IT / 2012]
55 - Expatriates working Salaries and Full Not specified
in International remuneration
Committee of Red provided by
Cross (ICRC) in International
Bangladesh Committee of Red
Cross (ICRC) from
[SRO 80 AIN / IT Bangladesh or
/ 2010] abroad

56 - Expatriate Salaries and Full Earlier of
technician working remunerations - 3 years from
in industrial the date of
undertakings having arrival in
approval from Bangladesh
BEPZA within 22 - 5 years from
March, 2009 and companys
starting commercial commercial
production within production
2012
[SRO 28 / AIN / IT
/ 2010]
57 - Expatriates working Income from salary Full Not specified
as technician,
professionals,
scientists, senior
administration
staff, advisor and
consultant in Local
Development
Network Institutions
under Aga Khan
Development
Network
[SRO 101 AIN /

IT / 2003]
58 - Expatriates working Salaries and Full Not specified
in foreign funded allowances
development received from
projects having the foreign
bi-lateral treaty Government or
between Bangladesh the foreign funded
Government development
and the foreign project
Government or
foreign funding
organization
[SRO 207 AIN /

IT / 1997]

59 - Ambassador, high Remuneration Full Not specified
commissioner, from such state
envoy, minister, for service in such
charge daffairs, capacity
commissioner,
counsellor,
consul de carrier,
secretary, advisor
or attache of an
embassy, high
commission,
legation or
commission of a
foreign State
[6th Schedule, Part

A, Para 7]
60 - Trade commissioner Official salary; Full Not specified
or other official Provided that
representative of corresponding
a foreign state in official of
Bangladesh Bangladesh in such
country enjoys
[6th Schedule, Part such exemption
A, Para 7]
61 - Non-resident Capital gain from Full Not specified

assessee transfer of stocks
or shares of listed
[6th Schedule, Part company subject
A, Para 43] to enjoying similar
exemption in
resident country

62 - All shareholders Income arising Full Not specified
except for from trading /
- Companies transaction of
defined in Section securities listed in
2(20) any SEC approved
- Firms defined in Stock Exchange
Section 2(32) (excluding
- Sponsor Government
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]

63 - All assessee - Income from any Full 10 years from
building situated the date of
[6th Schedule, Part in areas other completion of
A, Para 38] than in City construction
Corporation,
Cantonment
Board, Tongi
Upazila,
Narayanganj
Paurashava,
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
64 - All assessee Dividend from a Tk. 25,000 Not specified
company listed in
[6th Schedule, Part Bangladesh
A, Para 11A]
65 - All assessee Income from a Tk. 25,000 Not specified
mutual fund or unit
[6th Schedule, Part fund
A, Para 22A]
66 - All assessee Interest on tax- Full Not specified
free Government
[6th Schedule, Part security
A, Para 24]

67 - All assessee Income from Full Not specified
wage earners
[6th Schedule, Part development bond,
A, Para 24A] US dollar premium
bond, US dollar
investment bond,
Euro premium
bond, Euro
investment bond,
Pound sterling
investment bond,
or Pound sterling
premium bond
68 - All assessee Interest from Full Not specified
pensioners
[6th Schedule, Part savings certificate
A, Para 32A] provided that the
limit of investment
is upto Tk. 5 lakh
69 - All assessee except Income from Full Not specified
bank, insurance investment in
or any financial zero coupon bond
institutions issued by any
bank, insurance,
[6th Schedule, Part financial institution
A, Para 40] or other institution
approved by
Bangladesh Bank
and SEC
70 - All assessee Income from Upto Tk. Not specified
Bangladesh 25,000
[SRO 154 AIN / Industrial
IT / 1999] Development
Bond issued by
nationalized
commercial bank

71 - All assessee Income from Upto Tk. Not specified
bond issued by 25,000
[SRO 66 AIN / IT Government,
/ 2004] semi-government
or autonomous
body engaged
in electricity
production and
supply
72 - All assessee Interest on savings Full Not specified
pension scheme
[SRO 89 AIN/ IT of Government
/ 2003] approved
scheduled bank
73 - All assessee except Income donated to Upto low- Not specified
company funds established er of
under Trust of - 20% of
[6th Schedule, Part Prime Ministers income
A, Para 47] Education of the
Assistance Act, assessee
2012) - Tk. 1
crore
74 - All assessee Income donated Full Not specified
to any girls
[6th Schedule, Part school or girls
A, Para 49] college approved
by Ministry of
Education
75 - All assessee Income donated to Full Not specified
any Technical and
[6th Schedule, Part Vocational Training
A, Para 50] Institute approved
by Ministry of
Education
76 - All assessee Income donated Full Not specified
to any national
[6th Schedule, Part level research
A, Para - 51] and development
(R&D) institute
of agriculture,
science, technology
and industrial
development

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 Rate of Period appli-

No. for tax cable
1 - Companies regis- - Yarn manufacturing, 15% 1 July, 2015
tered under Compa- yarn dying, finish- to 30 June,
nies Act, 1994 ing, coning 2019
- Fabric manufactur-
[SRO 193 AIN / ing, fabric dying,
IT / 2015] finishing, printing
2 - Industrial under- Manufacturing of jute For Assessment
taking engaged in goods company: year 2016
manufacturing of 10% 2017, 2017
jute goods For other 2018, 2018
assessees: 2019 and
[SRO 258 AIN / Highest 2019 2020
IT / 2016] rate will
be 10%
3 - Industrial under- Export of manufac- For Assessment
taking engaged in tured jute goods company: year 2016
manufacturing of 10% 2017, 2017
jute goods For other 2018, 2018
assessees: 2019 and
[SRO 205 AIN / Highest 2019 2020
be 10%
4 - Exporter of jute Export of jute goods 0.60% 1 July 2016
goods under Section tax to be to 30 June
53BB deducted 2019
at source
[SRO 207 AIN /
IT / 2016]
5 - Exporter of knit Export of the specified 0.70% 1 July, 2016
wear, woven gar- items and goods tax to be to 30 June
ments, terry towel, deducted 2017
carton, accessories at source
of garments industry,
frozen foods, vegeta-
bles, leather goods,
packed food under
Section 53BB;

No. for tax cable
- Exporter of goods
(except for items
specified above)
under Section
53BBBB
[SRO 257 AIN /

IT / 2016]
6 - Manufacturer and Export of knit wear For Assessment
exporter of knit and woven garments company: year 2016
wear and woven 20% 2017
garments For other
assessees:
[SRO 208 AIN / Highest
be 20%
7 - Publicly traded ship Income from export 5% Not
building company business specified
registered under
Companies Act,
1994
[SRO 132 AIN /

IT / 2013]
8 - Non-publicly trad- Income from export 10% Not
ed ship building business specified
company registered
under Companies
Act, 1994
[SRO 132 AIN /

IT / 2013]
9 - Industries engaged Income from such 5% 12 years
in production of business from
freezer, refrigera- starting of
tor, motorcycle and commercial
air conditioner (in- production
cluding production
of small parts)
[SRO 186 AIN /

IT / 2009]
[SRO 78 AIN / IT
/ 2010]

No. for tax cable
10 - Companies defined Income arising from 10% Not
in Section 2(20) trading / transaction specified
of securities
[SRO 196 AIN / listed in any SEC
IT / 2015] approved Stock
Exchange (excluding
Government
securities)
11 - Private university, Income from such 15% Not
private medical col- institutions specified
lege, private dental
college, private en-
gineering college,
private college
providing educa-
tion on information
technology
[SRO 268 AIN /

IT / 2010]
12 - Autonomous public All income except for 25% Not
utility providers capital gain specified
[SRO 158 AIN /

IT / 2014]
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 from 10% Not
Section 2(32) trading / transaction specified
of securities
[SRO 196 AIN / listed in any SEC
IT / 2015] approved Stock
Exchange (excluding
Government
securities)

No. for tax cable
15 - Sponsor sharehold- Income arising from 5% Not
er or shareholder trading / transaction specified
director of bank, of securities
financial institu- listed in any SEC
tion, merchant approved Stock
bank, insurance
company, leasing Exchange (excluding
company, portfolio Government
management com- securities)
pany, stock dealer
or stock brokerage
company
[SRO 196 AIN /

IT / 2015]
16 - Shareholder (except Income arising from 5% Not
sponsor shareholder trading / transaction specified
or shareholder di- of securities
rector) having 10% listed in any SEC
or more of shares of approved Stock
total paid up capi- Exchange (excluding
tal of a company / Government
companies listed in securities)
any stock exchange
[SRO 196 AIN /

IT / 2015]
17 - All assessee Production of pelleted - 3% on Not
poultry feed, produc- first Tk. specified
[SRO 199 AIN / tion of pelleted feed 10 lakh
IT / 2015] for cattle, shrimp - 10% on
and fish, production next
of seeds, marketing
of locally produced Tk. 20
seeds, cattle firming, lakh
dairy firming, frog - 15% on
firming, horticulture, rest
floriculture, silk tree of the
plantation, bee keep- income
ing, silk worm firming,
mushroom firming

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, 2016 and SROs issued by the Government at
different times.
Sl. Assessee / Applicable for Conditions Rate of Period

No. rebate applicable
1 - Non-publicly traded Transfer of 10% on tax In the year
company minimum 20% of transfer
share of paid up
[Finance Act, 2016] capital through
IPO
2 - Non-publicly traded Transfer of 20% 10% on tax In the year
mobile phone operator share of paid up of transfer
capital through
[Finance Act, 2016] IPO
3 - New manufacturing If commercial 20% on tax 10 years
industries established operation starts
in any area of within 1 July,
Bangladesh except for 2014 30 June,
the areas within the 2019
jurisdiction of any City
If any 20% on tax 10 Years
Corporation
organization
- Registered under
with existing
Companies Act, 1994
commercial
- Not enjoying tax
operation within
holiday, tax exemption
the jurisdiction
or reduced tax rate
of any city
- Not publicly traded
corporation
company
area shifts the
entire operation
certain conditions
outside city
corporation area
[SRO 185 AIN / IT /
within 1 July,
2014]
2014 30 June,
2019
If commercial 10% on tax Upto 30
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
- Subject to fulfilling in the relevant limit of
certain conditions SROs expenditure:
Lower of
[SRO 229 AIN / IT / - 20% of
2011] total
[SRO 223 AIN / IT / income
2012] - Tk. 12
[SRO 186 AIN / IT / crore
2014]
5 - Partner of a firm Partnership Average Not
income rate on specified
[6th Schedule, Part partnership
B, Para 16] income
6 - Individual assessee If production 5% on Not
owning cottage volume exceeds income specified
industry in less 15% but does not
developed or least exceed 25% as
developed area compared with
preceding year
[Finance Act, 2016]
If production 10% on Not
volume exceeds income specified
25% as compared
with preceding
year

7 - Individual assessee Investments to Total Not
be made in areas income up specified
[Section 44(2)(b), specified in Sixth to Tk. 10
44(2)(c)] Schedule Part lakh: 15% of
B, ITO, 1984 the eligible
amount
Eligible amount
is the lowest of:
- The sum of
investments
made as
per Sixth
Schedule, Part
B (excluding
paragraph 15
and 16) Total
income
- 25% of total
exceeds
income
Tk. 10 lakh,
excluding
up to Tk.
(i) income 30 lakh:
subject to tax 15% on first
exemption or Tk.2.5 lakh
reduced rate and 12% on
of tax, the rest of
the eligible
(ii) income amount
from sources
subject to
minimum tax
as per Section
82C(a), Total
income
(iii) employers exceeds
contribution Tk. 30 lakh:
to recognized 15% on the
provident fund first Tk. 2.5
(RPF), lakh, 12%
on the next
(iv) interest on Tk. 5 lakh
accumulated and 10% on
balance of RPF the rest of
the eligible
- Tk. 1 crore 50 amount
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
Chapter 36 Tax Exemption table) offered
u 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 the
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 commercial production
u 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
u 10% of the exempted income has to be invested each year in the purchase
of shares of a listed company
u The industrial undertaking or physical facility cannot be 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
u 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
u 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
u 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 for Para - 2
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 (up
to one-fifth of salary)
4 Contribution to provident fund under Provident Fund Act, Para - 4
1925
5 Employers and employees 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 upto Tk. 60,000 Para - 11
9 Donation to a charitable hospital, subject to certain Para
conditions 11A
10 Donation to a charitable organization set up for welfare of Para
retarded people, subject to certain conditions 11B
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 computer Para 23
or one laptop
16 Donation to a national level institution set-up in memory of Para 24
liberation war

Sl. Particulars Reference
17 Donation to a national level institution set-up in memory of Para 25
the Father of the Nation
18 Sum invested by an individual in acquisition of any stocks or Para 27
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 listed
below
u Donation made to natural disaster affected people through Government

organization
u Donations made to institution engaged in establishment and maintenance
of old home
u Donations made to social institution engaged in the welfare of mentally
or physically disabled people
u Donations to organizations engaged in educating rootless children
u Donations to organizations engaged in projects on accommodation for
the slum dwellers
u Donations to social institutions engaged in campaign for women rights
and against dowry system
u Donations made to institution engaged in maintenance and rehabilitation
of orphan / rootless children
u Donations made to institutions engaged in research on liberation war,
expansion of the consciousness of independence war and the act of
honorable living of the freedom fighters
u Donations made to institutions engaged in sanitation and sewerage work
at Chittagong Hill Districts, char areas and areas surrounding breaking up
of banks of river
u Donation made to institution engaged in medicating cleft leap, cataract,
cancer and leprosy
u Donation made to person or institution engaged in treatment of acid
affected people

u Donation to specialized hospital [like cancer hospital, lever hospital,
kidney hospital, thalassemia hospital, eye hospital and cardiology
hospital] for free treatment to poor patient
u Donation to public universities
u Donation to Government approved educational institution for giving
stipend to insolvent meritorious freedom fighters children with a view
to providing technical or vocational education to them
u Any assistance made to schools and colleges under MPO for improving
computer and English education
u Donations to organizations engaged in providing technical and vocational
training to unskilled or semi-skilled labor for export of human resources
u Donations made to national sports institutions engaged in the
development of infrastructure and training at national level
u Any contribution to museum made for freedom fighter at national level
u Any contribution to organization engaged in the preservation of the
memories of the Father of the Nation
u Any donation to any social welfare organization, NGO or not for profit
organization engaged with awareness, treatment or rehabilitation for
HIV, AIDS and the drug addicted
u Any donation to any social welfare organization, NGO or not for profit
organization engaged with rehabilitation for children or women rescued
from overseas trafficking
u Any donation to any Government approved fund for national disaster or
tournament or national carnival
A company cannot charge such CSR expenditure as expense in the profit or loss
account. Moreover such a company has to fulfil the following conditions to claim
rebate against the above mentioned CSR activities
u Must pay salaries and allowances to its workers regularly and must have
waste treatment plant if it is involved with the production of industrial
goods
u Must pay income tax, VAT and duty timely and must repay institutional
loans
u Can only donate money to the institutions recognized by the Government
for the purpose of CSR
u Must fulfil all rules as per Bangladesh Labour Act, 2006

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 invests in the following areas and pays tax at
certain rates before the assessment of the relevant year, the source of invested
amount would be deemed explained.
u Investment in residential building and apartment [Section 19BBBBB]
u 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 32 countries
Belarus Belgium Canada China

Denmark France Germany India
Indonesia Italy Japan Malaysia
Mauritius Myanmar Netherlands Norway
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 arms 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 arms length
principle, tax authorities raise the concerns of the possibility of profit shifting.
In Bangladesh, regulations of transfer pricing enacted from the Fiscal Year 2012-
2013.
44.1 Computation of arms length price

[Section - 107C; Rule - 70]
The arms length price in relation to international transactions will be
determined by applying any of the following method
u 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 arms
length price.
u 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 arms length price.

u 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 arms
length price.
u 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 arms length price.
u 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 arms length price.
u 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 arms length price.
44.2 Maintenance and keeping of information, documents and records

[Section - 107E; Rule - 73]
Every person who enters into international transactions with aggregate value
of Tk. 3 crore in the income year has to keep and maintain the following
information, documents and records
u Ownership profile of the group; business profile of the group, each

member of the group, assessee enterprise and each associated
enterprise operating in Bangladesh
u Information on the business relationship among the members of

the group

u Relevant information regarding the assessee and associated
enterprises such as functions performed, risks assumed, assets
employed, economic and market analysis, forecasts, budgets etc.
u 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
u Details of all transaction with the associated enterprises
u Manner of choosing tested party, rationale for such choice; details

of comparables, manner of comparisons, details of comparability
analysis; list of database utilized
u 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 transactions are No

at arms length basis
Calculates adjustments for the transfer price

with regard to the arms 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 arms length price
- Information, documents or records have been maintained as

prescribed
- Information / data used in calculation is reliable or correct
Such transactions are at

arms length basis
Yes No
No adjustment required DCT determines the

to the transfer price arms length price
in accordance with
the provisions of the
Ordinance; or
DCT refers the

determination of
DCT computes the total arms length price to
income of the assessee the Transfer Pricing
considering the arms Officer (TPO)
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 / 2% per month of the amount of Sec - 57
collect tax at source tax required to be deducted or
collected
Maximum period of penalty: 24
months
2 Deduction or collection 2% per month of the amount of Sec - 57
of tax at source at a shortfall
lesser rate or in lesser
amount Maximum period of penalty: 24
months
3 Failure to pay 2% per month of the amount or Sec - 57

deducted or collected part of it which has not been paid
amount of tax at to the credit of the Government
source or part of it
to the credit of the Maximum period of penalty: 24
Government months
4 Issuance of certificate The required amount of deduction Sec-57A

of tax deduction or or collection
collection without
actual deduction or
collection or payment
to the Government
5 Sum of advance tax 10% simple interest on the such Sec 73
paid and tax deducted shortfall
or collected at source
is less than 75% of tax 15% simple interest on the such
determined on regular shortfall, if return is submitted
assessment after the tax day
Maximum period of penalty: 24
months

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

13 Failure to maintain Higher of (a) 50% of taxes payable Sec 123
accounts in the on house property income or (b)
prescribed manner Tk. 5,000
as per Section 35(2)
(assessee has income
from house property)
14 Failure to file return Higher of (a) 10% of last assessed Sec 124
under Section - 75, 77, tax or (b) Tk. 1,000
89(2), 91(3), 93(1), 75A
For continuing default: Tk. 50 for
every 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 Tk. 500 Sec 124

certificate, statement,
accounts, information For continuing default: Tk. 250 per
or TIN certificate month
required under 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 Maximum: Tk. 20,000 Sec

of another person 124A
18 Failure to verify the Maximum: Tk. 50,000 Sec

authenticity of TIN 124AA
19 Failure to pay advance Maximum: the amount of shortfall Sec 125

tax

20 Non-compliance with Maximum: the amount of tax Sec 126
any notice under liability
Section 79, 80, 83(1)
and 83(2)
21 Failure to pay tax on Maximum: 25% of amount of unpaid Sec 127
the basis of return tax
under Section 74
22 Concealment of income 15% of the tax evasion Sec 128
If concealment detected after

1 year: Additional 15% for each
preceding year
23 Audit report not Minimum: Tk. 50,000 Sec
certified by a Maximum: Tk. 200,000 129A
Chartered Accountant
that accounts are
prepared and reported
in accordance with
BFRS and BAS
Incorrect or false audit

report by Chartered
Accountant
24 Furnishing fake audit Tk. 100,000 Sec

report 129B
25 Default in payment of Maximum: amount of arrear tax Sec 137
tax
26 Non-compliance of Imprisonment up to 1 year or fine Sec 164
certain obligations or both
under Section - 164
27 False statement in Imprisonment of 3 months to 3 Sec 165
verification years or fine or both
28 Use of fake TIN or TIN Imprisonment up to 3 year or fine Sec
of another person up to Tk. 50,000 or both 165A
29 Furnishing fake audit Imprisonment of 3 months to 3 Sec

report years or fine up to Tk. 100,000 or 165AA
both
30 Obstruction of income Imprisonment up to 1 year or fine Sec

tax authority or both 165B

31 Unauthorized Imprisonment of 3 months to 3 Sec
employment of a non- years or fine up to Tk. 500,000 or 165C
Bangladeshi citizen both
32 Concealment of income Imprisonment of 3 months to 5 Sec 166

years or fine or both
33 Disposal of property to Imprisonment up to 5 years or fine Sec 167
prevent attachment or both
34 Disclosure of protected Imprisonment up to 6 months or Sec 168
information fine

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.
u Value Added Tax at 15% on value addition, to be paid by importers,

manufacturers, and service providers having minimum turnover of Tk.
80 lakh. [Section 3]
u 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]
u 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
u All goods imported or supplied in Bangladesh, except for those stated in

the First Schedule of the VAT Act, 1991
u 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
u Any goods or services exported or deemed to have been exported from

Bangladesh
u 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
u Any goods and services intended to be re-imported into Bangladesh
u 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
u In the case of imported goods, the importer of the goods at import stage
u In the case of goods manufactured or produced in Bangladesh, the

supplier at production or manufacturing stage
u In the case of services, the provider of services
u In the case of service provided from outside the territory of Bangladesh,

service receiver
u 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
u Government organization
u Semi-government organization
u Autonomous organization
u NGO
u Bank
u Insurance
u Financial Institutions
u Limited company
u Educational Institutions
u 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 Areas Treasury Challan Financial Code
Large Tax-payer Unit (LTU) 1/1133/0006/0311
Dhaka (North) 1/1133/0015/0311
Dhaka (South) 1/1133/0010/0311
Dhaka (East) 1/1133/0030/0311
Dhaka (West) 1/1133/0035/0311
Chittagong 1/1133/0025/0311
Comilla 1/1133/0040/0311
Sylhet 1/1133/0018/0311
Rajshahi 1/1133/0020/0311
Rangpur 1/1133/0045/0311
Jessore 1/1133/0005/0311
Khulna 1/1133/0001/0311
51 Scope of VAT and specified rates

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

no. code of VAT VDS
1 S 001 S 001.10 Hotels including club 15% N/A
2 S 001.20 Restaurant (including 15% N/A

club) with air condition
3 Restaurant (including 7.5% N/A
club) without air
condition
4 S 002 S 002.00 Decorators and 15% VDS Applicable
caterers
5 S 003 S 003.10 Motor car garage & 10% VDS Applicable
workshop
6 S 003.20 Dockyard 10% VDS Applicable
7 S 004 S 004.00 Construction works / 6% VDS Applicable
firms (Builders)

no. code of VAT VDS
8 S 005 S 005.10 Warehouse 15% N/A
9 S 005.20 Port for import or 15% N/A
export
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. 2.5%
feet
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 15% N/A
shop
18 S 011.40 Video and audio CD 15% N/A
rent provider shop
19 S 012 S 012.10 Telephone service 15% N/A
provider
20 S 012.11 Tele-printer service 15% N/A
provider
21 S 012.12 Telex service provider 15% N/A
22 S 012.13 Fax service provider 15% N/A
23 S 012.14 Internet service 15% N/A
provider
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 15% N/A
forwarding agent

no. code of VAT VDS
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 15% N/A
distributor
35 S 023.20 Film producer 15% N/A
36 S 024 S 024.00 Sales center of 6% VDS Applicable
furniture - At the time
of production
37 Sales center of 4% VDS Applicable
furniture - 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 5% N/A
and gold & silver
trader
40 S 027 S 027.00 Insurance company 15% N/A
41 S 028 S 028.00 Courier & express mail 15% VDS Applicable
service
42 S 030 S 030.00 Beauty parlor 15% N/A
43 S 031 S 031.00 Repairing or servicing 15% VDS Applicable
of 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 15% VDS Applicable
firm
47 S 035 S 035.00 Shipping agent 15% N/A

no. code of VAT VDS
48 S 036 S 036.10 Air-conditioned bus 15% N/A
service
49 S 036.20 Air-conditioned launch 15% N/A
service
50 S 036.30 Air-conditioned railway 15% N/A
service
51 S 037 S 037.00 Procurement provider 5% VDS Applicable
52 S 038 S 038.00 Organizer of cultural 15% N/A
programs with foreign
performers
53 S 039 S 039.10 Satellite cable 15% N/A
operators
54 S 039.20 Satellite channel 15% N/A
distributors
55 S 040 S 040.00 Security service 15% VDS Applicable
provider
56 S 042 S 042.00 Automated saw- 15% N/A
machine
57 S 045 S 045.00 Legal advisors 15% VDS Applicable
58 S 046 S 046.00 Health club and fitness 15% N/A
center
59 S 047 S 047.00 Sports organizer 15% N/A
60 S 048 S 048.00 Transport contractor - 4.5% VDS Applicable
For carrying petrol and
related goods
61 Transport contractor - 10% VDS Applicable
Others goods
62 S 049 S 049.00 Transport fare or rent- 15% VDS Applicable
a-car
63 S 050 S 050.10 Architect, interior 15% VDS Applicable
designer 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

no. code of VAT VDS
67 S 053 S 053.00 Presence at board 15% VDS Applicable
meeting
68 S 054 S 054.00 Advertisement through 15% VDS Applicable
satellite channel
69 S 056 S 056.00 Banking and non- 15% N/A
banking 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 15% N/A
manufacturer
73 S 060 S 060.00 Buyer of auctioned 4% VDS Applicable
goods
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 15% N/A
tailoring shop
77 S 064 S 064.10 Amusement and theme 15% N/A
park
78 S 064.20 Picnic spot and 15% N/A
shooting spot
79 S 065 S 065.00 House, floor & 15% VDS Applicable
space cleaning
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 supply 15% VDS Applicable
or management

no. code of VAT VDS
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 15% N/A
related club
88 S 078 S 078.00 Sales center of RMG of 4% N/A
own brand
89 S 099 S 099.00 Any services not 15% N/A
specified under 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 4% N/A
/2015/730 Mushak (ATV)
dated 04 June, 2015

SUMMARY OF
GIFT TAX

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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 moneys 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 apply to gifts made
by following persons
u A body corporate established or constituted by or under any law
u 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
u Gift of property situated outside Bangladesh
u Gift to the Government or any local authority
u 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; 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;
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
u Gift to the dependent relative up to Tk. 20,000 on the occasion of his /
her marriage
u 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
u Gift under a will
u Gift under contemplation of death
u Gift to sons, daughters, father, mother, spouse, brothers and sisters
In addition to the above exemptions, gifts made in any financial year up to 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.

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Table of Contents

Bangladesh Tax Handbook 2016 2017 2 | Page

Bangladesh Tax Handbook 2016 2017 3 | Page

SUMMARY OF INCOME TAX.......................................................................21

TAX RATE STRUCTURE............................................................................46

Bangladesh Tax Handbook 2016 2017

FILING OF RETURN & PAYMENT OF TAX.......................................................68

Bangladesh Tax Handbook 2016 2017

TRANSFER PRICING.............................................................................. 113

OFFENCES, PENALTIES & PUNISHMENTS.................................................... 118

SUMMARY OF VALUE ADDED TAX............................................................. 123

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

Bangladesh Tax Handbook 2016 2017

Bangladesh Tax Handbook 2016 2017 1 | Page

Bangladesh Tax Handbook 2016 2017 2 | Page

Assessment Year: 2016-2017 Assessment Year: 2015-2016

Bangladesh Tax Handbook 2016 2017 3 | Page

1.2 Surcharge on individual assessee [Finance Act, 2016]

Assessment Year 2016-2017 Assessment Year 2015-2016

1.3 Corporate tax rate [Finance Act, 2016]

Sl. Applicable for Assessment Year Assessment Year

1 Non-publicly traded company 35% 35%

Bangladesh Tax Handbook 2016 2017 4 | Page

4 Non-publicly traded bank, 42.5% 42.5%

1.4 Definitions [Section 2]

u Income [Section 2(34)]: Section 2(34) has been replaced

u Person [Section 2(46)]: Section 2(46) has been replaced scoping

u Tax day [Section 2(62A)]: A new section has been inserted

The definitions have been elaborated in Chapter 3 Important definitions.

1.5 Charge of additional tax [Section 16B]

Bangladesh Tax Handbook 2016 2017 5 | Page

1.7 Charge of excess profit tax [Section 16C]

1.8 Un-explained investments, etc., deemed to be income [Section 19]

u Section - 19(11): A proviso regarding benefit or advantage of

u Section - 19(29): The time period for payment for purchase of

1.9 Collection, deduction and credit of VAT [Section 30 (aa)]

The requirement of collection or deduction and credit of applicable VAT

1.11 Allowable limit of perquisite [Section 30 (e)]

The limit of perquisite paid to an employee which is allowable as deduction

Bangladesh Tax Handbook 2016 2017 6 | Page

1.12 Allowable limit of overseas travelling expenditure [Section 30 (k)]

The limit of overseas travelling expenditure which is allowable as deduction

1.13 Credit of income from tax [Section 44 (2)]

u The sum of amounts specified in Sixth Schedule, Part B (excluding

u 25% of total income excluding

Any income eligible for tax exemption or a reduced rate

Any income under Section - 82C(2)(a)

The resident and non-resident Bangladeshi assessees will be entitled to tax

Total income Amount of credit

u If a person fails to submit return of income under Section 75, the

Bangladesh Tax Handbook 2016 2017 7 | Page

1.15 Deduction at source from interest or profit on securities [Section 51]

Section 51 has been replaced. The requirement of 5% tax to be deducted

1.16 Deduction at source from payment to contractors, payment of royalties

The provisions regarding deduction of tax at source from payment to

u Section 52 and Rule 16:

Any payment to any resident assessee regarding the following

Execution of a contract (except for providing or

Manufacture, process or conversion

Printing, packaging or binding

Any payment to any resident assessee regarding royalties,

Any payment to any resident assessee regarding certain services

Bangladesh Tax Handbook 2016 2017 8 | Page

The following persons have been specified to be responsible for deduction of