Bangladesh: Tax

The Income Tax Ordinance 1984 (“the Ordinance”) governs the income-tax regime in Bangladesh and has been in effect since 1 July, 1984. The operation of the Ordinance involves annual amendment or addition to the law through the Finance Act promulgated every year.

Every person by whom tax or other sum of money is payable under the Ordinance must obtain a Taxpayer’s Identification Number (TIN).¹ An annual return of income must be submitted by a person to the Deputy Commissioner of Taxes (“DCT”) for every income year if, among others:²

1. The person’s total income during the income year exceeds the maximum amount that is not chargeable to tax, or
2. The person was assessed to tax for any one of the three years immediately preceding that income year, or
3. The person is a company, a non-government organization registered with the NGO Affairs Bureau, a co-operative society, a firm etc.

In this regard, “income year” is the financial year immediately preceding the assessment year and generally means the period from 01 July to 30 June of the relevant year.³ Companies which are subsidiaries, holding companies, branch or liaison offices of a parent company incorporated outside Bangladesh, may follow a difference financial year for consolidation of accounts.⁴ However, this must be approved by the DCT.

The annual returns are submitted in prescribed forms and must be accompanied with the following documents:⁵

1. in case of individuals, statements of assets, liabilities and life style, and
2. in case of companies, an audited statement of accounts (including profit and loss account and balance sheet in respect of the relevant income year)⁶ and a computation sheet explaining the difference between the profit or loss shown in the statement of accounts and the income shown in the return.

Footnotes
1. Section 184B(1) read with section 2(7) of the Income-Tax Ordinance 1984
2. Section 75(1) of the Income-Tax Ordinance 1984
3. Section 2(35) of the Income-Tax Ordinance 1984
4. Ibid
5. Section 75(3)(c) of the Income-Tax Ordinance 1984
6. Section 35(3) of the Income-Tax Ordinance 1984

The key regulatory authority is the National Board of Revenue (“NBR”). Generally, standard appeal is resolved within 150 days calculated from the end of month in which the appeal is filed.

A person aggrieved by an order of an income tax authority may appeal in the following order:

1. Appeal to the Commissioner of Taxes (Appeals) or the Appellate Joint Commissioner of Taxes.⁷ Generally, standard appeal is resolved within 150 days calculated from the end of month on which the appeal is filed.⁸
2. Appeal to Appellate Tribunal.⁹ Generally, standard appeal is resolved within 6 months calculated from the end of month on which the appeal is filed.¹⁰
3. Reference to the High Court Division of the Supreme Court of Bangladesh.¹¹ Resolution of tax issues before the High Court Division is a time consuming process and hence, it is difficult to predict any specified period.
4. Appeal to the Appellate Division of the Supreme Court of Bangladesh.¹² Resolution of tax issues before the Appellate Division is a time consuming process and hence, it is difficult to predict any specified period.

Footnotes
7. Section 153 of the Income-Tax Ordinance 1984
8. Section 156(6) of the Income-Tax Ordinance 1984
9. Section 158 of the Income-Tax Ordinance 1984
10. Section 159(6) of the Income-Tax Ordinance 1984
11. Section 160 of the Income-Tax Ordinance 1984
12. Section 162 of the Income-Tax Ordinance 1984

Every person who is required to file an annual return must pay the relevant amount of tax (as per the return or the sum of minimum tax) either on or before the day on which he files the return.¹³ In this regard, the return must be filed on or before the “Tax Day”¹⁴ which means:¹⁵

1. in case of an assessee other than a company, 30th November following end of the income year,
2. in the case of a company, 15th September or 15th day of the seventh month following end of the income year, whichever is later.
   For instance, if a company ends its income year on June 30, 2021, then the Tax Day will be the 15th day of the 7th month following end of the income year – which is January 15, 2022. On the other hand, if a company ends its income year on December 31, 2021, then the Tax Day will be the July 15, 2022. However, as July 15 is before September 15, thus, the Tax Day will be September 15, 2022 for that company.
3. in the case of an assessee, who is an individual and has not submitted return before, 30th June following the end of the income year.

When an assessee files a return of income, the DCT issues an acknowledgement of receipt, which is deemed to be an order of assessment.¹⁶ The DCT will then process the return and if such process results in a different amount of income, tax or other material figures than the amount mentioned in the return, then the DCT may issue a notice upon the assessee and give him an opportunity to explain his position.¹⁷ The assessee may file an amended return or a revised return and pay the tax or any amount that is payable as per the DCT’s process.

After hearing the assessee and considering all documents, the DCT shall pass an order assessing the total income and the sum payable by the assessee on the basis of such assessment.¹⁸ If the assessee is aggrieved with the order, then he may appeal against it.

Footnotes
13. Section 74(1) of the Income-Tax Ordinance 1984
14. Section 75(5) of the Income-Tax Ordinance 1984
15. Section 2(62A) of the Income-Tax Ordinance 1984
16. Section 82BB(1) of the Income-Tax Ordinance 1984
17. Section 82BB(2) and (3) of the Income-Tax Ordinance 1984
18. Section 83(2) of the Income-Tax Ordinance 1984

All particulars or information contained in the following documents are treated as confidential and cannot be disclosed:¹⁹

1. any statement made, return furnished or accounts or documents produced under the provisions of the Ordinance, and
2. any evidence given, or affidavit or deposition made, in the course of any proceedings under of the Ordinance, except proceedings relating to offences under the Ordinance, and
3. any record of any assessment proceedings or any proceeding relating to the recovery of demand under the Ordinance.

Accordingly, no Court or other authority is competent to require any public servant to produce before it or give evidence regarding any return, accounts or documents which relates to any proceeding under the Ordinance.²⁰ However, the prohibition on disclosure does not extend to certain documents including the following:²¹

1. any particulars in respect of any statement, return, accounts, documents, evidence, affidavit or deposition required for the purposes of prosecution of an offence under the Ordinance, the Penal Code 1860, or the Foreign Exchange Regulation Act 1947,²²
2. any particulars to a Civil Court in any suit which relates to any matter arising out of any proceeding under the Ordinance and to which the Government of Bangladesh is a party,²³
3. any particulars disclosed to any officer appointed by the Comptroller and Auditor-General of Bangladesh or the NBR for the purpose of auditing tax receipts or refunds,²⁴
4. any particulars relevant to any inquiry into a charge of misconduct in connection with income tax proceedings against a lawyer, a chartered accountant, or a cost and management accountant disclosed to any authority empowered to take disciplinary action against such lawyer, chartered accountant or cost and management accountant.²⁵

Bangladesh is not a signatory to the Common Reporting Standard²⁶ and there have been no public news about its proposal to become a signatory. There is no Register of Beneficial Ownership in Bangladesh. The only register for companies, partnerships etc. is the Register of Joint Stock Companies and Firms (“RJSC”). Although RJSC has an online database, it is not accessible by the general public.

Footnotes
19. Section 163(1) of the Income-Tax Ordinance 1984
20. Section 163(2) of the Income-Tax Ordinance 1984
21. Section 163(3) of the Income-Tax Ordinance 1984
22. Section 163(3)(a) of the Income-Tax Ordinance 1984
23. Section 163(3)(e) of the Income-Tax Ordinance 1984
24. Section 163(3)(g) of the Income-Tax Ordinance 1984
25. Section 163(3)(i) of the Income-Tax Ordinance 1984
26. https://www.oecd.org/tax/exchange-of-tax-information/crs-mcaa-signatories.pdf

The residential status of a company is determined with reference to two factors:²⁷

1. whether it is a Bangladeshi company (as defined in section 2(11) of the Ordinance) or any other company (as defined in section 2(20) of the Ordinance), and
2. whether the control and management of its affairs are wholly situated in Bangladesh in a year.

Other transparent entities, such as partnerships, firms or other association of persons will be treated as resident if the control and management of their affairs is situated wholly in Bangladesh in that year.²⁸ The term “year” means the financial year from June to July.²⁹

Footnotes
27. Section 2(55)(c) of the Income-Tax Ordinance 1984
28. Section 2(55)(b) of the Income-Tax Ordinance 1984
29. Section 2(69) of the Income-Tax Ordinance 1984 read with section 2(19) of the General Clauses Act 1897

There are no specific data on the policing of cross-border transaction by the tax authority. Generally, cross-border transactions are regulated as “international transactions” under Chapter XIA of the Ordinance titled Transfer Pricing. This chapter governs transactions between “associated enterprises”, either or both of whom are non-residents.³⁰ The amount of any income or expenditure arising from an “international transaction” is determined having regard to the “arm’s length price”³¹, which means the price in a transaction, the conditions (e.g. price, margin or profit split) of which do not differ from the conditions that would have prevailed in a comparable uncontrolled transaction between independent entities carried out under comparable circumstances.

Footnotes
30. Section 107A of the Income-Tax Ordinance 1984
31. Section 107B of the Income-Tax Ordinance 1984

There is no CFC or Thin Cap regime under the Ordinance. The transfer pricing regime appears under Chapter XIA of the Ordinance, as discussed above. However, there is no avenue of executing an advance pricing agreement with the NBR. There are different methods whereby the “arm’s length price” of an “international transaction” is determined by applying the most appropriate method(s).³² They are as follows:

1. comparable uncontrolled price method;
2. resale price method;
3. cost plus method;
4. profit split method;
5. transactional net margin method;
6. any other method where it can be demonstrated that-
   1. none of the methods mentioned in clause (a) to (e) can be reasonably applied to determine the arm’s length price for the international transaction, and
   2. such other method yields a result consistent with the arm’s length price.

Footnotes
32. Section 107C of the Income-Tax Ordinance 1984

There is no general anti-avoidance rule (GAAR) under the Ordinance.

There is no separate rate of tax for digital service under the Ordinance. However, income arising directly or indirectly through the sale of any goods or services by any electronic means to purchasers in Bangladesh is deemed to accrue or arise in Bangladesh, and thus, chargeable to tax in Bangladesh.³³

Footnotes
33. Section 18(2)(d) read with section 17(1) of the Income-tax Ordinance 1984

By incorporating section 18(2)(d) through the Finance Act 2018, Bangladesh tax regime introduced tools to tax e-commerce activities which were posing challenges to cross-border and international taxation methods. In this regard, the OECD BEPS Project noted that the “spread of the digital economy” posed “challenges for international taxation”. It appears that section 18(2)(d) of the Ordinance has captured the concept of “significant economic presence” for the digital economy as encapsulated in the 2015 Final Report on Action 1 of the OECD BEPS Project.³⁴

Footnotes
34. See Junayed A. Chowdhury, Corporate Tax Law & Practice, University Press Limited, 2nd ed, 2021, p. 67

Please see our answer to question number 12.

The Income Tax Ordinance 1984 is the progeny of the Income Tax Act 1922 that existed during the period before the independence of Bangladesh and sometime thereafter.

Tax regime and rate of taxation

a) Business profits: The Ordinance prescribes different heads of income for the purpose of charge of income-tax and computation of total income.³⁵ One of the heads of income is “income from business or profession” which is taxable under section 28 of the Ordinance.

The rate of income-tax of different businesses is amended every financial year through promulgation of a Finance Act. The Finance Act 2022 prescribes the following, among others, rates of tax on all types of income of companies (except income from dividend):³⁶

b) Employment income and pensions: Salaries is a head of income that is taxable under the Ordinance³⁷ and it includes pension.³⁸ It is subject to deduction at source, which means the person responsible for paying salaries must, at the time of payment, deduct tax at a rate representing the average of the rates applicable to the estimated total income of the payee under that head.³⁹

The rate of tax on salaries will depend on which of the following income brackets an individual falls on:⁴⁰

The sum of exempted income for women, persons of the third gender, and persons who are 65 years old or above is BDT 3,50,000.⁴¹

c) VAT (or other indirect tax): The Value Added Tax and Supplementary Duty Act 2012 (“VAT Act 2012”) governs the imposition of VAT and supplementary duty on taxable imports and supplies. The general rate of VAT is 15% unless a reduced rate is provided under the Third Schedule of the VAT Act 2012.⁴² On the other hand, supplementary duty is chargeable at the rate prescribed in the Second Schedule of the VAT Act 2012.⁴³

d) Savings income and royalties: Royalty falls under the head of income titled “income from other sources”.⁴⁴ There is no specific rate of tax payable in respect of royalty. Any sum earned as royalty will be added to a person’s total income and taxable as per the rate provided in the Finance Act 2022. However, when making payment of royalty to a non-resident person which constitutes their income, tax must be deducted at the rate of 20%.⁴⁵

With regard to savings, any person responsible for making any interest payment on any savings instruments shall, at the time of such payment, deduct income tax at the rate of 10% on such interest.⁴⁶ However, this rate may vary depending on the payee of the interest and/or the type of saving deposits.⁴⁷

e) Income from land: One of the heads of taxable income is “income from house property”.⁴⁸ In this regard, a tenant of a house property must deduct tax from the rent of such house property at the rate of 5% at the time of payment of such rent.⁴⁹ Furthermore, when any person engaged in real estate or land development business pays any sum to the land owner on account of signing money, subsistence money, house rent or any other form for the purpose of development of the land of such owner in accordance with any power of attorney or any agreement or any written contract, such person shall deduct tax at the rate of 15% on the sum so paid to the owner at the time of such payment.⁵⁰

f) Capital gain: Capital gain is also one of the heads of taxable income in the Ordinance.⁵¹ It is payable in respect of any profits and gains arising from the transfer of a capital asset.⁵² Capital gain is computed as per the method prescribed in sections 32 and 32A of the Ordinance and the rate of capital gains tax is prescribed under the Second Schedule of the Ordinance.⁵³

g) Stamp and/or capital duties: Stamp duty is payable on such instruments and at such rates as prescribed in Schedule I of the Stamp Act 1899.

Footnotes
35. Section 20 of the Income-Tax Ordinance 1984
36. Schedule 2, First Part, Section-Kha, Para 1, Finance Act 2022
37. Section 20(a) of the Income-Tax Ordinance 1984
38. Section 2(58) of the Income-Tax Ordinance 1984
39. Section 50(1) of the Income-Tax Ordinance 1984
40. Schedule 2, First Part, Section-Ka, Finance Act 2022
41. Ibid
42. Section 15(3) of the Value Added Tax and Supplementary Duty Act 2012
43. Section 55(4) of the Value Added Tax and Supplementary Duty Act 2012
44. Section 33(b) of the Income-Tax Ordinance 1984
45. Section 56(1) of the Income-Tax Ordinance 1984
46. Section 52D of the Income-Tax Ordinance 1984
47. Section 53F of the Income-Tax Ordinance 1984
48. Section 20(c) of the Income-Tax Ordinance 1984
49. Section 53A(1) of the Income-Tax Ordinance 1984
50. Section 53P of the Income-Tax Ordinance 1984
51. Section 20(f) of the Income-Tax Ordinance 1984
52. Section 31 of the Income-Tax Ordinance 1984
53. Section 16(3) of the Income-Tax Ordinance 1984

All income classifiable under the head “income from business or profession” must be computed in accordance with the method of accounting regularly employed by the assessee.⁵⁴ However, the NBR may direct any business or profession to maintain accounts and other documents in a specified manner.⁵⁵

When filing its return for an income year, every company must furnish a copy of its trading account, profit and loss account and balance sheet which are:⁵⁶

1. certified by a chartered accountant to the effect that the accounts are-
   1. maintained and the statements are prepared and reported in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) or in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted in Bangladesh, and
   2. audited in accordance with the Bangladesh Standards on Auditing (BSA),
2. signed by as many directors as stipulated in the Companies Act 1994.

Notwithstanding the accounting method employed by an assessee, the DCT may compute the income of the assessee in such manner as he thinks fit for any of the following reasons:⁵⁷

1. there is no regular method of accounting, or
2. the DCT is of the opinion that the income of the assessee cannot be properly deduced from the method of accounting that has been employed,
3. the assessee failed to maintain accounts in the manner specified by the NBR (if any),
4. a company has not complied with the accounting requirements discussed above, or
5. the certification of a company’s accounts is not verifiable.

Footnotes
54. Section 35(1) of the Income-Tax Ordinance 1984
55. Section 35(2) of the Income-Tax Ordinance 1984
56. Section 35(3) of the Income-Tax Ordinance 1984
57. Section 35(4) of the Income-Tax Ordinance 1984

There are different vehicles for carrying out business but their tax treatment is different. For instance, a company is a separate legal entity which is taxed separately from its shareholders. But a partnership firm (whether registered or unregistered) is a transparent entity which is not taxed since it is not a separate legal entity. Rather, the partners of a partnership firm are taxed for any salary, interest, commission or other remuneration paid to them by the firm.⁵⁸ Both companies and partnership firms are used as vehicles for commercial business activities. A trust is also a transparent entity but it is most often used by non-government organizations (NGO’s) undertaking philanthropic activities. On the other hand, a person may run a commercial business under a sole proprietorship whereby the income of the person is taxed as an individual.

Footnotes
58. Section 43(3) of the Income-Tax Ordinance 1984

Both residents and non-residents are liable to pay tax on total income in a year that:⁵⁹

1. is received or deemed to be received in Bangladesh by or on behalf of such person, or
2. accrues or arises, or is deemed to accrue or arise to him in Bangladesh.

Residents are additionally liable to pay tax on income that accrues or arises to them outside Bangladesh during that year.⁶⁰ With regard to a business, the following income, among others, is deemed to accrue or arise in Bangladesh:⁶¹

1. any income accruing or arising, directly or indirectly, through or from:
   1. any permanent establishment in Bangladesh, or
   2. any property, asset, right or other source of income, including intangible property, in Bangladesh, or
   3. the transfer of any assets situated in Bangladesh, or
   4. the sale of any goods or services by any electronic means to purchasers in Bangladesh, or
   5. any intangible property used in Bangladesh,
2. any dividend paid outside Bangladesh by a Bangladeshi company.⁶²

In determining the existence of a “permanent establishment” in Bangladesh, one must consider any double taxation avoidance agreement between Bangladesh and the relevant foreign country.⁶³ If no such agreement exists, then the definition of “permanent establishment” provided in the Ordinance⁶⁴ will be employed.

Footnotes
59. Section 17(1)(a)(i), (a)(ii) and (b) of the Income-Tax Ordinance 1984
60. Section 17(1)(a)(iii) of the Income-Tax Ordinance 1984
61. Section 18(2) of the Income-Tax Ordinance 1984
62. Section 18(3) of the Income-Tax Ordinance 1984
63. Section 144 of the Income-Tax Ordinance 1984
64. Section 2(44A) of the Income-Tax Ordinance 1984

There are a number of special tax treatments under the Ordinance, such as:

1. Business income from an industrial undertaking set-up in Bangladesh between the 01 July 2011 and 30 June 2019, and between the 01 July 2019 and 30 June 2024 shall be tax exempted for specified periods and at specific rates,⁶⁵
2. Income, profits and gains from a physical infrastructure facility set up in Bangladesh between the 01 July 2011 and 30 June 2019, and between 01 July 2019 and 30 June 2024 shall be tax exempted for specified periods and at specific rates,⁶⁶
3. If any sum is invested in between 01 July 2021 and 30 June 2022 (both days inclusive) in a new industrial undertaking, no question as to the source of such sum shall be raised by any authority if an individual pays tax at the rate of 10% on the sum so invested on or before 30 June 2022,⁶⁷
4. If any sum is invested by a company in any economic zone⁶⁸ or in any hi-tech park⁶⁹ for setting up an industrial undertaking engaged in producing goods or services therein within the period from 01 July 2019 and 30 June 2024, then no question shall be raised as to the source of such sum if tax at the rate of 10% is paid on the sum so invested before filing of the return for the concerned income year.⁷⁰

Furthermore, the Government of Bangladesh has issued Statutory Regulatory Order (SRO) granting tax exemption to certain private power generation companies for specified periods and at specific rates.

Footnotes
65. Section 46B(1) and 46BB(1) of the Income-Tax Ordinance 1984
66. Section 46C(1) and 46CC(1) of the Income-Tax Ordinance 1984
67. Section 19AAAAAA(1) of the Income-Tax Ordinance 1984
68. Economic zone as declared under section 5 of the Bangladesh Economic Zones Act 2010
69. Hi-tech park as declared under section 22 of the Bangladesh Hi-Tech Park Authority Act 2010
70. Section 19DD of the Income-Tax Ordinance 1984

The term “royalty” is defined as including consideration for transfer of all or any rights, including the granting of a licence, in respect of a patent, invention, model, design, mark or similar property.⁷¹ If any payment is to be made by a specified person to a resident on account of royalties, patent, invention, know-how, copyright, trademark etc., then the person responsible for making payment shall, at the time of making payment, deduct income tax at the rate of 25% (where the amount does not exceed BDT 25,00,000) and 12% (where the base amount exceeds BDT 25,00,000).⁷²

However, the following companies are exempted from withholding tax on payment of royalties:

1. Any company engaged in manufacturing of goods or supply of services at any Economic Zone⁷³ is provided withholding tax exemption on royalties payable by such companies for a period of 10 years calculated from the date of start of commercial activities,⁷⁴
2. Any private power generation company (except coal based power generation companies) whose commercial production would begin on or before 31 December 2014⁷⁵ or between 01 January 2020 to 31 December 2022⁷⁶ (pursuant to the terms and conditions of Private Sector Power Generation Policy of Bangladesh), would enjoy withholding tax exemption on royalties payable by such company,
3. Any project company incorporated under section 22 of the Public private Partnership Act 2015 and engaged in specified projects⁷⁷ is provided with withholding tax exemption on royalties payable by such project company for 10 years from the date of commercial activities of the project company,⁷⁸
4. Any company engaged in manufacturing of goods or supply of services at any Hi-Tech Park⁷⁹ will be provided with withholding tax exemption of 50% on royalties payable by such company for 10 years from the start of commercial activities.⁸⁰

Footnotes
71. Section 2(56)(a) of the Income-Tax Ordinance 1984
72. Section 52A(1) of the Income-Tax Ordinance 1984
73. Economic Zone declared and established under sections 4 and 5 of the Bangladesh Economic Zones Act 2010
74. SRO No. 299-Ain/Ayekor/2015 dated 08.10.2015
75. SRO No. 211-Ain/Ayekor/2013 dated 01.07.2013
76. SRO No. 05-Ain/Ayekor/2020 dated 02.01.2020
77. The PPP Projects are National Highway or Expressway and related Service Roads, Flyovers, Elevated and At-Grade Expressways, River Bridges, Tunnels, River port, Sea port, Airport, Subway, Monorail, Railway, Bus Terminals, Bus Depots and Elderly care home
78. SRO No. 209-Ain/Ayekor/2017 dated 21.06.2017
79. Hi-Tech Park established under Bangladesh Hi-Tech Park Authority Act 2010
80. SRO No. 301-Ain/Ayekor/2015 dated 08.10.2015

In computing the income of an assessee under the head of “income from business or profession”, a number of allowances and deductions are admissible under the Ordinance.⁸¹ However, any expenditure exceeding 10% of the net profit disclosed in the statement of accounts of a company not incorporated in Bangladesh under the Companies Act 1994 by way of head office or intra-group expense (called by whatever name) is disallowed as deduction.⁸² The Ordinance puts an upper limit of expenses of branch-company or branch office operating in Bangladesh on account of head office, intra-group or any similar type of expenses. The words “head office expenses” or “intra-group expenses” are not defined in the Ordinance. If a branch office has its head office in New York and another associate office in London, then any expense on account of the New York Office will be head office expense and any expenditure on account of its London office (for example, management expenditure) will be intra-group expense.⁸³

This restriction will not apply if there is a Double Taxation Avoidance Agreement which will take precedence in determining both the expense and income of a foreign company which is a permanent establishment in a contracting state.⁸⁴

Footnotes
81. Section 29 of the Income-Tax Ordinance 1984
82. Section 30(g) of the Income-Tax Ordinance 1984
83. See Junayed A. Chowdhury, Corporate Tax Law & Practice, University Press Limited, 2nd ed, 2021, p. 301
84. Standard Chartered Bank v Commissioner of Taxes 2 CLR (HCD) (2014) 80

Chapter VII of the Ordinance deals with deduction or collection of tax at source. The following income are subject to tax deduction at source:⁸⁵

1. income classifiable under the head “salaries”,
2. income from discount on the real value of Bangladesh Bank bills,
3. income classifiable under the head “interest on securities”,
4. income derived on account of supply of goods, execution of contracts or services rendered,
5. income derived by the importers on account of import of goods,
6. income derived on account of indenting commission,
7. income derived on account of winnings from lottery or crossword puzzles,
8. any income chargeable under the Ordinance which is paid or payable to a non-resident,
9. Income classifiable under the head “income from house property”,
10. income derived on account of export of manpower,
11. income derived on account of travel agency commission or incentive bonus,
12. income derived on account of purchase by public auction,
13. income derived on account of acting in films,
14. income derived on account of shipping agency commission,
15. income derived from commission, discount or fees payable to distributors for distribution or marketing of manufactured goods,
16. income derived on account of interest on saving deposits, fixed deposits or term deposits and share of profit on term deposits,
17. income dierived on account of payment from workers’ participation fund,
18. income derived on account of insurance commission,
19. income classifiable under the head “capital gains”,
20. income derived on account of fees for professional or technical services,
21. income derived on account of manufacture of cigarettes manually without any mechanical aid whatsoever,
22. income derived from compensation against acquisition of property,
23. income derived on account of running of brick field,
24. income derived on account of services rendered by the doctors,
25. income derived on account of commission of letter of credit,
26. income derived on account of survey by a surveyor of general insurance company,
27. income derived on account of commission, remuneration or charges as a foreign buyer’s agent,
28. income from dividends,
29. income derived on account of rendering certain services,
30. income derived on account of shipping business carried on both inside and outside Bangladesh by a resident assesse,
31. income derived on account of business of real estate and land developer,
32. income derived by an exporter on account of export of any commodity,
33. income derived by a member of a stock exchange on account of transaction of shares, debentures, mutual funds, bonds or securities,
34. income derived on account of courier business of a non-resident,
35. income derived on account of export cash subsidy,
36. on account of renewal of trade licence,
37. income derived on account of freight forward agency commission,
38. income derived on account of rental power,
39. income derived on account of interest of Post Office Savings Bank Account,
40. income derived on account of rental value of vacant land or plant or machinery,
41. income derived on account of advertisement,
42. income derived by foreign technician serving in a diamond cutting industry,
43. income derived from transfer of securities or mutual fund units by sponsor shareholders of a company etc,
44. deduction of tax for services from convention hall, conference centre, room or, as the case may be, hall etc.,
45. deduction of tax from residents for any income in connection with any service provided to any foreign person,
46. income derived on account of international gateway service in respect of phone call,
47. collection of tax from manufacturer of soft drink,
48. income derived from insurance policy,
49. deduction of tax from local letter of credit (L/C),
50. income derived from any fees, revenue sharing, etc. from cellular mobile phone operator,
51. income from transfer of share of any stock exchange,
52. income from transfer of share of company listed in any stock exchange,
53. income derived from lease of property,
54. deduction of tax from any sum paid by real estate developer to land owner,
55. income derived from the operation of inland ships,
56. income derived from the operation of commercial vehicles.

Footnotes
85. Section 49(1) of the Income-Tax Ordinance 1984

There are no recognized environmental taxes payable by businesses under the Ordinance. However, the Environment, Forest and Climate Change Ministry is considering investment tax exemption for environment-friendly equipment and resources and income tax exemption for green service providers to minimise environmental pollution.⁸⁶

Footnotes
86. https://www.dhakatribune.com/bangladesh/2022/01/11/minister-green-tax-under-consideration-to-control-pollution (accessed on 30 September 2022)

Dividend income is not tax exempt under the Ordinance. As per section 54 of the Ordinance, when paying dividend to a resident or non-resident shareholder, a company must deduct tax at the following rate:

1. if the shareholder is a company, at the rate applicable to a company,
2. if the shareholder is a person other than a company, at the rate of 10% where the person receiving such dividend furnishes his 12-digit TIN to the payer or 15% where the person receiving such dividend fails to furnish his 12-digit TIN to the payer.

However, distribution of taxed dividend to a company will be exempt from tax if the company distributing such taxed dividend has maintained separate account for such taxed dividend.⁸⁷ Further, a specified person or any other person responsible for making payment of dividend to a non-resident, which constitutes the income of such non-resident chargeable to tax under the Ordinance, must deduct tax at source at the following rates:⁸⁸

1. 20% in case of a company, fund and trust, and
2. 20% in case of any other person not being a company, fund and trust.

Footnotes
87. Para 60, Part A, Sixth Schedule of the Income-tax Ordinance 1984
88. Section 56(1) of the Income-tax Ordinance 1984

Bangladesh presents one of the most liberal foreign direct investment regimes in the South Asia region. Given the size of the economy (Bangladesh is the 41st largest in the world in nominal terms or at current prices⁸⁹), a young population and the geographical proximity to the Bay of Bengal, the country poses exciting opportunities for new entrants to the market. The Bangladesh Government has been extremely forthcoming about its plans to open up the market for international investor in areas such a real estate, telecommunication (including satellite), power and infrastructure and technology. The only problem in Bangladesh, like any other emerging economy, is the tension between bureaucratic contraction and political will for liberalization.

Footnotes
89. https://www.dhakatribune.com/business/2022/07/16/bangladesh-41st-largest-economy-in-the-world-now, accessed on 30 September 2022