Taxes in Bangladesh

Income tax under the Income Tax Act 2023 covers seven heads of income: employment, rent, agriculture, business, capital gains, financial assets and other sources. Tax residents are generally taxed on their worldwide income. An individual is generally resident if they spend at least 182 days in the tax year, or at least 60 days in the tax year and at least 365 days during the four preceding years. Non-residents are taxed on income arising, accruing or received in Bangladesh, for example from a permanent establishment, Bangladeshi assets, rights or sales to buyers in Bangladesh. For assessment years 2026–27 and 2027–28, income up to 375,000 Bangladesh Taka (BDT) remains tax-free. The threshold is 425,000 BDT for women and persons aged 65 or over, 500,000 BDT for taxpayers with disabilities or third-gender persons, and 525,000 BDT for gazette-listed wounded Freedom Fighters or wounded members of the officially designated Warrior category. The rates then apply progressively: 10 percent on the next 300,000 BDT, 15 percent on the next 400,000 BDT, 20 percent on the next 500,000 BDT, 25 percent on the next 2,000,000 BDT and 30 percent on the remainder. Non-resident individuals who are not non-resident Bangladeshis are generally subject to a 30 percent rate. A minimum tax may also apply based on place of residence: 5,000 BDT in DNCC, DSCC and Chattogram City Corporation, 4,000 BDT in other City Corporations and 3,000 BDT outside a City Corporation. For companies, the income tax rate depends on legal form, listing status and industry. For assessment years 2026–27 through 2030–31, the stated rates range, for example, from 20 or 22.5 percent for certain listed companies conducting exclusively bank transactions to 45 percent for mobile network operators and tobacco manufacturers. Banks, insurance companies and financial institutions are subject to rates of 37.5 or 40 percent depending on listing status. Trusts, firms and AOPs are generally subject to 27.5 percent. Certain entities may be subject to minimum taxes on gross receipts, for example from 5,000,000 BDT for companies, trusts, firms and AOPs and from 30,000,000 BDT for individuals. Value-added tax (VAT/Mushak), locally also called Mushak, generally applies to taxable imports and domestic supplies. The standard rate is 15 percent, exports are taxed at 0 percent and statutory exemptions are listed in the First Schedule. VAT registration is required when taxable turnover exceeds 8,000,000 BDT in twelve months. Between 3,000,000 and 8,000,000 BDT, a 3 percent Turnover Tax generally applies instead of parallel VAT registration. Registration or enrolment must be applied for within 15 days; the NBR issues the certificate and Business Identification Number (BIN), generally a nine-digit number, according to the stated rule within three working days. VAT-registered businesses typically issue VAT-6.3 invoices and file VAT-9.1 by the 15th day of the following month; Turnover Tax businesses use VAT-6.9 and VAT-9.2. Public holidays move the deadline to the preceding working day. Records must be retained for at least five years. For imports, the HS code, type of goods, customs value, current Tariff Values and SROs determine the burden. The operative tariff may include Customs Duty, Supplementary Duty, VAT, Advance Income Tax, Regulatory Duty and Advance Tax; there is no uniform flat rate. Bangladesh Customs and the NBR use, among other systems, ASYCUDA and the Bangladesh Single Window for declarations and clearance. Import VAT is generally 15 percent on the statutory tax base, Advance Tax on taxable imports is generally 3 percent and Advance Income Tax is often 5 percent under the applicable rule. Administration uses the e-TIN portal, e-Return through etaxnbr.gov.bd, e-TDS through etds.gov.bd and VAT Online through vat.gov.bd. Individuals generally file their income tax return by 30 November after the end of the income year; first-time filers generally have until 30 June after the income year. Certain Bangladeshis living abroad have a deadline until the 90th day after their return. Payment is made upon filing or under the applicable advance-tax and withholding-tax rule through A-Chalan or eTaxPayment. A late income tax return may trigger a penalty of generally 10 percent of the last assessed tax, at least 1,000 BDT, plus 50 BDT for each additional day. An electronic revised return is generally permitted once within 180 days. Overpaid income tax may be refunded or set off under the law. Depending on the case, appeals against tax assessments, losses, penalties, interest, surcharges, refunds or tax credits may be filed with the Commissioner or Additional Commissioner (Appeals), the Appellate Tribunal and subsequently the High Court Division. An appeal to the Tribunal generally requires payment of 10 percent of the difference between the decision and the admitted tax liability; the filing fee is 1,000 BDT and a revision costs 200 BDT. A High Court reference is generally filed within 90 days. For payments to taxable non-residents, the payer may have to withhold or remit up to 30 percent. An NBR certificate may permit a lower or zero withholding rate under an applicable double tax treaty; Bangladesh has 43 double tax treaties administered by the NBR. Residence, permanent establishment, e-commerce connections, withholding tax, remittances and foreign-exchange rules may also be decisive. International transactions must generally be documented on an arm's-length basis; for international transactions exceeding 30,000,000 BDT, a report by a CA or CMA may be required on request. A claim for foreign tax credit must generally be made within two years.