Bangladesh Tax Handbook 2013-2014
1
Index
Index
Page
Page
Major Changes in Bangladesh Taxation Laws 2013-2014
1. Tax Exemption Limit
9
2. Personal Tax Rate Structure
9
3.
Minimum Tax (Individual)
10
4.
Changes regarding Surcharge on individual
10
5. Minimum tax for firm subject to gross receipts
10
6.
Withdrawal of tax on share premium
10
7.
Changes in Company Tax Rates
10
8. Special tax treatment in respect of investment in residential building and
apartment
10
9. Amortization of license fees
11
10.
House Rent allowance receivable in cash
12
11.
Conveyance allowance receivable in cash with no conveyance facility
12
12.
Changes regarding the extent of admissible allowance
12
13.
Tax holiday of newly established industrial undertakings
12
14.
Amendments in Tax Holiday Scheme
13
15.
Extension of areas for TDS from certain services
13
16.
Changes of rate of Withholding Tax at source
14
17.
Return of income-in simplified return form
16
18.
Power of giving order for not removing property
16
19.
Reference to High Court Division
17
20.
Amendment in Sixth Schedule, Part-A
17
21.
Extension of time to avail reduced tax rate for certain industrial companies
17
22.
Tax exempted income as per different SROs
18
23.
Amendment of Alternative Dispute Resolution (ADR)
18
24. Procedure for spot assessment
18
25. Amendment of Tax-payers Identification Number
19
26.
20
Summary of VAT Changes in FY: 2012-2013
Various Tax Incentives allowed as per Tax Laws
2
Bangladesh Tax Handbook 2013-2014
1.
Tax incentives for Expatriate
23
2.
Tax Incentives on Jute Industry, RMG & Textile Industry
23
Bangladesh Tax Handbook 2013-2014
3
Index
Index
Page
3.
Tax Incentives on Fisheries, Poultry, Dairy Farming etc.
23
4.
Tax Incentives on Real Estate and Land development Industry
23
5.
Tax Incentives on Information & Technological Industry
23
6.
Tax Incentives on investment in Stock Exchange
24
7.
Tax Incentive on money borrowed from abroad
26
8.
Incentive for investment in residential building and apartment
26
Summary of Taxation Laws 2013-2014
Income Tax
Page
24.
Capital Gains
45
25.
Exemption of Capital Gains from tax
46
26.
Capital Gain Tax
47
27.
Income from Other Sources
47
28.
Set-Off of Losses
48
29.
Carry forward of loss
48
30.
Carry forward of Depreciation Allowance
48
31.
Income fully exempted from Tax subject to fulfillment of prescribed conditions
and limitations
48
32.
Tax Holiday for newly established industrial undertaking, Tourist Industry and
Physical Infrastructure facility set-up between the period of July 2011 to June 2015
etc. in certain cases
50
1.Definitions
29
2.
Charge of Income Tax
30
3.
Charge of Surcharge
31
4.
Charge of Additional Tax
31
33.
List of eligible sectors for Tax Holiday
53
5.
Charge of Excess Profit Tax
31
34.
Tax Holiday for Hospitals
54
6.
Charge of Minimum Tax
31
35.
Income Exemption Limit
32
Exemption from tax of newly established physical infrastructure facility set up
between the period July 2011 and June 2015, etc. in certain cases
54
7.
8.
Personal Tax Rate Structure
32
36.
Exemption of income of cooperative societies
56
9.
Minimum Tax (Individual)
33
37.
Investment Allowance for Tax Rebate
56
Rates of Corporate Tax
57
Normal Depreciation Allowance and Amortization
60
10
Incidence of Tax on Non-Resident
33
38.
11.
Scope of Total Income
33
39.
62
62
12.
Income Deemed to Accrue or Arise in Bangladesh
34
40. Amortization of License fees
13.
Deemed Income
34
41.
Initial depreciation
14.
Special tax treatment in respect of investment in residential building and apartment
36
42.
Accelerated Depreciation
62
43.
Withholding Tax / Tax Deducted at Source (TDS)
63
44.
Rates of tax at source
64
45.
Form of Return of Withholding Tax
70
15.
Special tax treatment in respect of investment in the purchase of bond under
Bangladesh Infrastructure Finance Fund (BIFF)
37
16.
Special tax treatment in respect of investment in the purchase of Bangladesh
Government Treasury Bond
37
17.
Voluntary disclosure of income
18.
46. Advance Payment of Tax
76
37
47.
Payment on the Basis of Return
76
Income from Salary
38
48.
Mode of payment of Tax by assessee
76
19. Income from Interest on Securities
40
49.
Return of statement of lifestyle
76
20.
Income from House Property
40
50.
Filing of Return of Income and Statement
77
21. Income from Business or Profession
41
51. Return of withholding tax
78
52. Obligation to furnish Annual Information Return
22.
Allowable Deductions on income from Business or Profession
41
23.
Deductions are not admissible in certain circumstances
44
4
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
78
5
Index
Income Tax
Page
53. Concurrent jurisdiction
78
54.Assessments
79
55. Some final settlement of tax liability
80
56.
81
Assessment on the basis of Report of a Chartered Accountant
57.
Assessment and computation of Income of Contractor of an Oil Company
81
58.
Assessments under other sections
82
59.
Transfer Pricing
82
60.
Determination of income from international transaction having regard to arm’s
length price
83
61.
Transfer Pricing Officer
83
62.
Maintenance and keeping of information, documents and records
83
63.
Report from an accountant to be furnished
83
64.
Provision of penalty on transfer pricing
84
65.
Determination of arm’s length price under section 107C
84
66.
Factors to be considered in judging comparability
84
67.
Most appropriate method
85
68.
Information and documents to be kept and maintained under section l07E
85
69.
Additional powers of enquiry and production of documents
85
70.
Power of giving order for not removing property
85
71.
Avoidance of Double Taxation
86
72.
Relief in respect of Foreign Income
86
Value Added Tax
73.
Who will deduct VAT
89
74.
Where to deposit the deducted VAT?
89
75.
Scope of VAT and its specified rates
89
Gift Tax
76.
Gift Tax
77.
Exemption from Gift Tax
78.
Provisions of the Gift Act shall NOT apply in certain cases
99
99
100
79.
Return of Gift Tax
100
80.
Rates of Gift Tax
100
6
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
7
Income Tax
Income Tax
1.
Tax Exemption Limit
The ceiling of tax exempted income for the individual assessee has been enhanced from Taka
200,000 to Taka 220,000, while this limit for the individual female, persons aged 65 years &
more has been enhanced from Taka 225,000 to Taka 250,000 and limit for physically challenged
assessee has also been enhanced from Taka 275,000 to 300,000 with effect from 01 July 2013.
2.
Personal Tax Rate Structure
The person defined under section 2(46) of Income Tax Ordinance (ITO) 1984, every individual
assessee (including Non-resident Bangladeshi), firm (partnership or single), association of
persons (AOP), Hindu undivided family (HUF), artificial juridical persons and Non-Government
Organization (NGO) shall have to pay income tax on their total income according to 5 tier
income slabs and tax rates for the Financial Year 2012-2013 and Assessment Year 2013-2014.
The following table entails comparable scenario of 5 tier income slabs and tax rates for the two
consecutive Financial Years 2012-2013 and 2011-2012:
Financial Year 2012-2013
(Assessment Year 2013-2014)
Income Slabs
Tax
Income Slabs
Rates
Tax
Rates
i.
On the first Taka 220,000 of
total income of assessee
Nil
On the first Taka 200,000 of
total income of assessee
Nil
On the first Taka 250,000
of total income for Female,
persons aged 65 years &
above assessee
Nil
On the first Taka 225,000
of total income for Female,
persons aged 65 years &
above assessee
Nil
On the first Taka 300,000 of
total income of physically
challenged assessee
Nil
On the first Taka 275,000 of
total income of physically
challenged assessee
Nil
On the next Taka 300,000 of
total income
10%
ii.
On the next Taka 300,000 of
total income
10%
iii. On the next Taka 400,000 of
total income
15%
iii.
On the next Taka 400,000 of
total income
15%
iv.
On the next Taka 300,000 of
total income
20%
iv.
On the next Taka 300,000 of
total income
20%
v.
On the balance of total
income
25%
v.
On the balance of total
income
25%
Non-resident (Foreign)
assessee
25%
Non-resident (Foreign)
assessee
25%
ii.
8
Bangladesh Tax Handbook 2013-2014
Financial Year 2011-2012
(Assessment Year 2012-2013)
Bangladesh Tax Handbook 2013-2014
i.
9
Income Tax
Income Tax
3.
Minimum Tax (Individual)
Minimum tax for individual assessee has been changed on the basis of location. If tax
payable becomes less than Taka 3,000 or Taka 2,000 or Taka 1,000 or negative after adjusting
Investment Tax Credit, individual assessee has to pay minimum tax as follows:
¾¾
Minimum tax is Taka 3,000 for resident of City Corporations
¾¾
Minimum tax is Taka 2,000 for resident of District Head Quarters and Paurashavas
¾¾
Minimum tax is Taka 1,000 for resident of Upazillas and others
Minimum tax exempted income for female, persons aged 65 years & more and physically
challenged assessee having only agricultural income are Taka 300,000 and 350,000
respectively while for other assessee, this limit is Taka 270,000.
4.
Changes regarding Surcharge on individual [sec: 16A]
Surcharge @ 10% will be levied on income tax payable in case of having net assets of more
than Tk. 2 crore to Tk. 10 crore in his statement of assets and liabilities, whereas the rate of
surcharge is 15% for assets more than value of Tk. 10 crore. Surcharge is applicable only for
individual assessee.
5.
Minimum tax for firm subject to gross receipts more than Tk. 50 Lac [Sec: 16CCC]
Every firm is liable to pay minimum tax @ 0.50% on gross receipts if gross receipts exceed Tk.
50 Lac. This will be applicable for the Assessment Year 2013-2014.
6.
Withdrawal of tax on share premium [Sec: 16E]
Tax @ 3% has been withdrawn on the sale of share premium over face value.
7.
Changes in Company Tax Rates
Types of Companies
SL. Areas of residential building or
NO. apartment
Tax Rates as per Tax Rates as per
AY 2013-2014
AY 2012-2013
Cigarettes Manufacturing Company (Publicly traded)
40%
35%
Cigarettes Manufacturing Company (Not-Publicly
traded)
45%
42.5%
Mobile phone operator company (Publicly traded)
40%
35%
8.
Special tax treatment in respect of investment in residential building and apartment
[section # 19BBBBB]
Source of any sum invested by any person in the construction or purchase of any residential
10
building or apartment for residential purpose and pays tax on the basis of measurement
before the assessment for the relevant assessment year in which the investment is completed,
then tax authority will not raise question on the source of investment. Area, measurement and
tax rates of such residential building or apartment are as follows:
Bangladesh Tax Handbook 2013-2014
Plinth area up to
200 square meters,
Tax amount per
square meter (Taka)
Plinth area more than
200 square meters,
Tax amount per
square meter (Taka)
1
Gulshan Model Town, Banani,
Baridhara, Motijheel Commercial
Area and Dilkusha Commercial Area
of Dhaka
5,000/-
7,000/-
2
Dhanmandi Residential Area, Defence Officers Housing Society
(DOHS), Mahakhali, Lalmatia Housing Society, Uttara Model Town,
Bashundhara Residential Area,
Dhaka Cantonment, Kawran Bazar,
Bijaynagar, Segunbagicha, Nikunja
of Dhaka, and Panchlaish, Khulshi,
Agrabad and Nasirabad Area of Chittagong
4,000/-
5,000/-
3
Other areas of City Corporations
except serial nos. 1 & 2 above
2,000/-
3,000/-
4
Areas of Paurasabhas of any district
headquarters
1,000/-
1,500/-
5
Upazilla and Others
700/-
1,000/-
6
If already owned a building or
apartment in any City Corporation
before such investment is
completed or the assessee invests
in two or more Buildings or
Apartments
As per above tax
Plus extra 20% of
above calculated tax
As per above tax Plus
extra 20% of above
calculated tax
9.
Amortization of license fees is allowable business expenditure [Section#29 (1) (viiia) &
Third Schedule, Para 10A]
License fees shall be amortized proportionately for two or more years. License fees mean
Spectrum Assignment Fee paid by a cellular mobile phone operator. It is applicable for the
license fee paid on or after 01 July 2012.
Bangladesh Tax Handbook 2013-2014
11
Income Tax
10.
Income Tax
House Rent allowance receivable in cash [Rule-33A]
Period of Exemption
Tax exempted house rent allowance has been increased from Tk. 180,000 to Tk. 240,000.
For the first and second years
100% of income
11.
Conveyance allowance receivable in cash with no conveyance facility [Rule-33C]
For the third year
70% of income
Tax exempted conveyance allowance has been increased from Tk. 24,000 to Tk. 30,000.
For the fourth year
55% of income
12.
Changes regarding the extent of admissible allowance [Section#44, sixth schedule part-B]
For the fifth year
40% of income
For the sixth year
25% of income
For the seventh year
10% of income
Sl.
13.
Particulars
1
Maximum Allowable investment
2
% of Investment for tax rebate on
total income excluding employer’s
PF contribution
3
Actual investment
34
% of allowable tax rebate
Assessment Year
2013-2014
Assessment Year
2012-2013
1.5 Crore Taka
1 Crore Taka
30%
20%
Provided that an industry engaged in the production of bio-fertilizer and petro-chemicals shall
be entitled for exemption from tax under the provisions of this section even if it is set up in the
districts of Dhaka, Gazipur, Narayanganj or Chittagong.
14.
Amendments in Tax Holiday Scheme [Section#46C]
Subject to the provisions of this Ordinance, income, profits and gains under section 28 from
physical infrastructure facility, set up in Bangladesh between the first day of July, 2011 and
the thirtieth day of June, 2015 (both days inclusive) shall be exempted from the tax payable
under this Ordinance for ten years beginning with the month of commencement of commercial
operation at the rates, below:
Tk. 1.50 Crore or 30% of Tk. 1.00 Crore or 20%
of total income or
total income or actual
actual investment,
investment, whichever
whichever is less
is less
15%
10%
Period of Exemption
Tax holiday of newly established industrial undertakings [Section#46B]
Tax holiday of newly established industrial undertakings has been extended upto 30 June 2015
(previously it was 30 June 2013) with the following:-
Industry undertaking in Dhaka and Chittagong divisions, excluding Dhaka, Narayanganj, Gazipur,
Chittagong, Rangamati, Bandarban and Khagrachari Districts will avail tax holiday benefit for
a period of five years from the date of commercial production of the said undertaking:
Period of Exemption
100% of income
For the third year
60% of income
For the fourth year
40% of income
For the fifth year
12
Rate of Exemption
For the first and second years
20% of income
Industry undertaking in Rajshahi, Khulna, Sylhet and Barisal divisions and Rangamati,
Bandarban and Khagrachari districts will avail tax holiday benefit for a period of seven years
from the date of commercial production of the said undertaking:
Bangladesh Tax Handbook 2013-2014
Rate of Exemption
15.
Rate of Exemption
For the first and second years
100% of income
For the third year
80% of income
For the fourth year
70% of income
For the fifth year
60% of income
For the sixth year
50% of income
For the seventh year
40% of income
For the eighth year
30% of income
For the ninth year
20% of income
For the tenth year
10% of income
Extension of areas for TDS from certain services:
15.1 Deduction of tax from fees for professional and technical services [section # 52A (3)]
On account of fees for professional or technical services shall be deducted or collected
as per following way:
¾¾
¾¾
ten per cent (10%) of such fees where the person receiving such fees furnishes
his taxpayer’s Identification Number (TIN) to the payer; or
fifteen per cent (15%) of such fees where the person receiving such fees fails
to furnish his Taxpayer’s Identification Number (TIN) to the payer.
Bangladesh Tax Handbook 2013-2014
13
Income Tax
Income Tax
15.2 Deduction of tax from payment of stevedoring agency and private security service
[section# 52AA]
If National Board of Revenue issues certificate in writing that the person rendering
such services is not likely to have any assessable income during the year or the income
is otherwise exempted from tax under any provision of the Ordinance, payment shall
be made without any deduction or with deduction at a lesser rate for that income year
as per Certificate.
15.3 Withdrawal from deduction of tax on Bond transactions by a member of Stock
Exchange [Section # 53BBB]
Requirement of deduction of tax at source on Bond transactions made by a member
of Stock Exchange has been withdrawn. Since deduction of tax at source has been
withdrawn, income on Bond transactions will not be assessed u/s 82C.
15.4 Deduction of tax from Collection of tax from manufacturer of soft drinks [section # 52S]
Tax @ 3% of the value of soft drinks will be collected while banderols or stamps are
delivered to any manufacturer of soft drinks. The value of such soft drinks will be the
value as determined for the purpose of the Value Added Tax (VAT).
Sl.
No
2
Sections
Heads of
& Rules Withholding tax
53FF
Real estate
or land
development
business at
the time of
registering any
document for
transfer of any
land or building
or apartment
15.5 Collection of tax on sale prices of Tea sold by public auction [section # 53C, rule-17D]
The person responsible for auction of tea shall collect tax at the rate of 1% [Previously
it was 0.50%].
15.6 Deduction or collection of tax from commission, discount or fees [section# 53E (2)]
16.
Any company, as defined in clause (20) of section 2 of the Ordinance other than oil
marketing company, which sells goods to any distributor or to any other persons under
a written contract at a price lower than the retail price fixed by such company, shall
collect at the time of sale of such goods to such distributor or other persons at the
rate of five per cent (5%) of the difference between the sale price to the distributor or
other persons and the retail price fixed by such company.
Changes of rate of Withholding Tax at source
Sl.
No
1
Sections
Heads of
& Rules Withholding tax
52B
Rates of withholding
(AY: 2013-2014)
Collection of tax 10% of the value of the
banderols.
from cigarette
manufacturers
at the time of
selling banderols
Rates of withholding
(AY: 2012-2013)
6% of the value of the
banderols.
Continued
14
Bangladesh Tax Handbook 2013-2014
Rates of withholding
(AY: 2013-2014)
Rates of withholding
(AY: 2012-2013)
(i) Tk. 1,600 per square
meter for building or
apartment for residential
purpose situated at Model
Town, Banani, Baridhara,
Motijheel Commercial
Area and Dilkusha
Commercial Area of Dhaka
(i) Tk. 2,000 per square
meter for building or
apartment for residential
purpose situated at Model
Town, Banani, Baridhara,
Motijheel Commercial
Area and Dilkusha
Commercial Area of Dhaka
(ii) Tk. 6,500 per sq meter
building for commercial
purpose for the areas
mentioned in (i).
(ii) Tk. 8,000 per sq meter
building for commercial
purpose for the areas
mentioned in (i).
(iii) Tk. 1,500 per square
meter for building or
apartment situated at
Dhanmandi Residential
Area, Defence Officers
Housing Society (DOHS),
Mahakhali, Lalmatia
Housing Society, Uttara
Model Town, Bashundhara
Residential Area, Dhaka
Cantonment, Kawran
Bazar Commercial Area
of Dhaka, and Panchlaish
R/A, Khulshi R/A, Agrabad
and Nasirabad Area of
Chittagong;
( iii) Tk. 1,800 per square
meter for building or
apartment situated at
Dhanmandi Residential
Area, Defence Officers
Housing Society (DOHS),
Mahakhali, Lalmatia
Housing Society, Uttara
Model Town, Bashundhara
Residential Area, Dhaka
Cantonment, Kawran
Bazar, Commercial Area
of Dhaka, and Panchlaish
R/A, Khulshi R/A, Agrabad
and Nasirabad Area of
Chittagong;
(iv) Tk. 5,000 per sq
meter building used for
commercial purpose for
the areas mentioned
in (iii).
(iv) Tk. 6,000 per sq
meter building used for
commercial purpose for
the areas mentioned in
(iii).
Continued
Bangladesh Tax Handbook 2013-2014
15
Income Tax
Sl.
No
3
Income Tax
Sections
Heads of
& Rules Withholding tax
Sec-52,
rule-16
Supply of goods
and execution
of contracts,
sub-contracts &
local LC
Rates of withholding
(AY: 2013-2014)
Rates of withholding
(AY: 2012-2013)
(V)Tk. 600 per square
meter for residential
building or apartment is
situated in areas other
than areas mentioned
in (i) & (ii) above and Tk.
1,600 per sq meter for
commercial building for
the areas mentioned in
(i) & (iii) above.
(V)Tk. 800 per square
meter for residential
building or apartment is
situated in areas other
than areas mentioned
above and Tk. 2,000 per
sq meter for commercial
building for the areas
mentioned in (i) & (iii)
above.
In case of oil supplied
by oil marketing
companies: If payment
exceeds 2 lac-0.60%.
In case of oil supplied by
oil marketing companies:
If payment exceeds 2
lac-0.75%.
17.
Return of income-in simplified return form [Section# 75 (2) (di)]
An individual, not being a shareholder director of a company, having income from salary or
income not exceeding Tk. 3 Lac from business or profession may opt not to submit particulars
of life style statement or IT 10BB.
18.
Power of giving order for not removing property [section # 116 A]
In the course of performing functions under the Ordinance, the Director General, Central
Intelligence Cell or the Commissioner has definite information in his hands that any person
has concealed the particulars of income or investment, he may, by order in writing- require any
person who is in immediate possession or control of any money, bullion, jewellery, financial
instrument, financial asset, valuable article or any other property not to remove, part with,
or otherwise deal with it without obtaining previous permission of the concerned authority
passing such order:
¾¾
Every such order shall cease to have effect after the expiry of a period of one year
from the date of the order made.
¾¾
The income tax authority may extend such period or periods with the approval of the
Board. Provided that the total period of extension shall in no case exceed one year.
¾¾
In computing the period if any, for which the order has been stayed by any Court,
shall be excluded.
19.
Reference to High Court Division [section # 160]
For consideration of High Court Division, tax rate has been decreased from 25% to 15% where
tax demand does not exceed Tk. 1 million and the rate from 50% to 25% where tax demand
exceeds Tk. 1 million on the difference between the tax determined by taxes appellate tribunal
and tax payable under section 74.
20.
Amendment in Sixth Schedule, Part-A
Amendments are as follows:
21.
¾¾
Paragraph 11 A: Income from dividend amounting to Tk. 10,000 previously it was Tk. 5,000.
¾¾
Paragraph 35: Any income from the export of handicrafts for the period from 01 July
2011 to 30 June 2015, previously it was 2013.
¾¾
Paragraph 39: Income derived from any small and medium enterprise (SME) engaged
in production of any goods and having an annual turnover of not more than Tk. 30 Lac,
previously it was Tk. 24 Lac.
¾¾
Paragraph 42: Any income from poultry farming for the period from 01 July 2011 to 30
June 2015, previously it was 2013.
Extension of time to avail reduced tax rate for certain industrial companies
Sl.
Particulars
AY: 2013-2014
AY: 2012-2013
1
Income from production of jute industries
tax @ 15%. [As per SRO No.206 AIN/AIT/2013,
dated 01 July 2013]
Till 30 June 2015
Till 30 June
2013
2
Income from production of Textile and Yarn
manufacturing related companies registered under the Company Act 1994 @ 15%.
[As per SRO No. 207 AIN/AIT/2013, dated 01
July 2013]
Till 30 June 2015
Till 30 June
2013
3
Export oriented handicrafts an amount
equal to 50% of the income is tax exempted.
Till 30 June 2015
Till 30 June
2013
4
Income derived from fisheries, production of
seeds, marketing of locally produced seeds,
cattle farming, dairy farming, horticulture,
frog farming, mushroom farming, floriculture and sericulture. [As per SRO No.208 AIN/
AIT/2013, dated 01 July 2013]
3% till 30 June
2015
5% till 30
June 2013
Continued
16
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
17
Income Tax
22.
Income Tax
Tax exempted income as per different SROs
¾¾
¾¾
¾¾
Private power generation companies (except coal based power generation companies)
will get tax exemption for 15 years if its commercial production starts within 31
December 2014. [SRO No. 211/AIN/IT/2013, dated 01 July 2013].
23.
Rate of Exemption
For the first five years (1st, 2nd,3rd, 4th & 5th year)
100% of income
For the next three years (6th, 7th, & 8th year)
50% of income
For the last two years (9th and 10th year)
25% of income
¾¾
In the case of a dispute pending before Appellate Tribunal, Assessee has to file application
to the Register/Deputy Register/Assistant Register of the concerned Tribunal Bench.
After getting permission from High Court Division or Appeal Division of the Supreme Court
,the assessee has to file an application to the Second Secretary (Taxes Legal) of NBR.
Procedure for spot assessment [Rule-38B (2)]
(a)
1,000/-
For the assessee not located under
any city corporation or any paurashava of district Head quarters.
If the initial capital investment
up to Taka 7 lac
2,000/-
For the assessee located at
paurashava in district headquarters and other area excluding city
corporation.
For assessee of any area.
If the initial capital investment
up to Taka 10 lac
5,000/-
For assessee of any area.
If the initial capital investment
up to Taka 15 lac
10,000/-
For assessee of any area.
Where an assessee carrying on profession as a Lawyer or DoctorRate of
tax (Taka)
Applicable area
Upto 3 Years
1,000/-
For the assessee not located under any
city corporation or any paurashava of
district Head quarters.
Upto 4 Years
2,000/-
For the assessee located at paurashava
in district headquarters and other area
excluding city corporation.
Upto 5 Years
3,000/-
For assessee of any area.
Upto 10 Years
5,000/-
For assessee of any area.
Amendment of Tax-payers Identification Number [Rule-64B]
Every person shall, for the purpose of obtaining Tax-payers Identification Number (TIN)
referred to in section 184B of the Ordinance, submit an application¾¾
Electronically through the website hosted by the Board for this purpose by following
the procedure mentioned in the website. (web address: www.incometax.gov.bd)
¾¾
Manually in the form prescribed below to the Deputy Commissioner of Taxes with
whom his Jurisdiction lies to any other authority or agency as may be authorized by
the Board in this respect.
¾¾
All income taxpayers will have to get new TINs by December 31 next through e-TIN
registration. The existing TIN will be invalid from 01 January 2014.
Rate of
Applicability
tax (Taka)
If the initial capital investment
up to Taka 6 lac
3,000/-
25.
Where an assessee carrying on businessInitial capital Investment
If the initial capital investment
up to Taka 8 lac
Length of profession
Amendment of Alternative Dispute Resolution (ADR) [SRO NO. 68-AIN/IT/2011, dated 05
March 2012 & SRO No. 205-AIN/IT/2012, dated 01 July 2013]
¾¾
24.
(b)
Private power generation companies (except coal based power generation companies)
which will start commercial production from 01 January 2015 will enjoy tax exemption
facility if it starts commercial production on or after 01 January 2015 as per following
Schedule: [SRO No. 212/AIN/IT/2013, dated 01 July 2013]:
Period of Exemption
Rate of
Applicability
tax (Taka)
Initial capital Investment
Any income of Federation of Chamber of Commerce and Industries approved by
Ministry of Commerce (except income from Bank interest, profit of organization and
income from Business) as per SRO No. 210 AIN/AIT/2013, dated 01 July, 2013. It will be
effective from Assessment Year 2014-2015.
Continued
18
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
19
VAT
26.
Tax Incentives
Summary of VAT Changes in FY: 2012-2013
¾¾
Enhancement of Annual Turnover amount for turnover tax: Turnover tax @ 3% if
annual turnover of taxable goods or services is less than Taka 8,000,000 (Previous
Taka 7,000,000)
¾¾
Condition for tax rebate: 80% rebate will be allowed on Telephone, Tele printer, Fax,
Internet, Freight Forwarders, C&F agent, WASA, Audit & Accounting Firm, Procurement
Provider, Security Service, Legal Consultant, Transport Contractor, Banking Service.
[earlier it was 60%]
¾¾
Withholding VAT:
Areas of withholding VAT extended by the following:
ƒƒ
ƒƒ
ƒƒ
ƒƒ
IT enabled service 4.5%
Other Miscellaneous Services 15%
Sponsorship Services 7.5%
Meditation Services 7.5%
¾¾
Package Value Added Tax for small businessmen-[SRO No.173-AIN/2013/677-Mushak,
dated 06 June, 2013]
Minimum value added tax shall be payable by small businessmen and shop owner who
got registration voluntarily as per following table:
Sl
No.
¾¾
20
Applicable Area
Annual Maximum
VAT Rate
Value Addition (Taka)
Minimum payable VAT (Taka)
1
Dhaka & Chittagong
City Corporations
80,000/-
15%
12,000/-
2
Other City
Corporations
60,000/-
15%
9,000/-
3
Paurashava
of District
headquarters
40,000/-
15%
6,000/-
4
Other areas
20,000/-
15%
3,000/-
Declaration of Taxable Goods by NBR--[SRO No.176-AIN/2013/680-Mushak, dated 06
June, 2013]
Activity Code
Activity Name
CO 17.28
Sweet & Sweet related goods
CO 38.30
Furniture
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
21
Tax Incentives
22
Tax Incentives
Bangladesh Tax Handbook 2013-2014
1.
Tax incentives for Expatriate
Salaries and allowances of expatriate personnel, employed in a foreign aided project established
under an agreement between the Bangladesh Government and foreign Government, are tax
exempted subject to respective agreement. SRO # 227-L/82 dated 20 June 1982.
2. Tax Incentives on Jute Industry, RMG & Textile Industry
Income tax rate for Jute Goods [SRO # 206-Ain/Income Tax/2013, dated 01 July 2013]: Any
industry manufactures or produces jute goods shall have to pay tax @ 15% and this incentive
will be applicable upto 30 June 2015.
Reduced rate of tax @ 10% of companies engaged in ready-made garments industries on
export sale and this incentive will be applicable upto 30 June 2014. [SRO # 265-Ain/Income
Tax/2010 later modified by SRO No. 217-AIN/IT/2012, dated 27 June 2012]
Reduced rate of tax @ 15% of companies engaged in textile industries from 01.07.2008 to
30.06.2015 [SRO # 207- Ain/Income Tax/2013, dated 01 July 2013]
3.
Tax Incentives on Fisheries, Poultry, Dairy Farming etc.
Any income from fisheries, poultry, production of pelleted poultry feed, production seeds,
marketing of locally produced seeds, cattle farming, dairy farming, horticulture, frog farming,
mushroom farming, floriculture, sericulture etc. irrespective of individual or company
assessee shall have to pay tax @ 3% (earlier which was tax exempted through para # 34 of
sixth schedule). Ref. Income tax rate for fisheries, poultry, dairy farming etc. [SRO # 208-Ain/
Income Tax/2013, dated 01 July 2013].
4.
Tax Incentives on Real Estate and Land development Industry
According to Section 38, Sixth Schedule, Part A
Any income derived from any building situated in any area of Bangladesh, not less than
five storied having at least ten flats, constructed at any time between the first day of July,
2009 and the thirtieth day of June, 2014 (both days inclusive), for ten years from the date of
completion of construction of the building, except the buildings situated in any areas of City
Corporation, Cantonment Board, Tongi Upazila, Narayanganj Paurashava, Gazipur Paurashava
and any Paurashava under Dhaka district.
5.
Tax Incentives on Information & Technological Industry
According to serial number 33, Sixth Schedule, Part A
Any income derived from the business of software development and Information Technology
Enabled Services (ITES) for the period from the first day of July, 2008 to the thirtieth day of
June, 2015:
Bangladesh Tax Handbook 2013-2014
23
Tax Incentives
Tax Incentives
Provided that the person shall file income tax return in accordance with the provisions of
section 75(2)(c) of the Ordinance.
Explanation: Information Technology Enabled Services (ITES) means- Digital Content
Development and Management, Animation (both 2D and 3D), Geographic Information Services
(GIS), IT Support and Software Maintenance Services, Web Site Services, Medical Transcription,
Business Process Outsourcing, Data entry, Data Processing, Call Centre, Graphics Design, Search
Engine Optimization, Web Listing, E-commerce and Online Shopping, Document conversion,
imaging and archiving.
6.
Tax Incentives on investment in Stock Exchange
Income tax will be imposed on capital gain arising from the transfer of capital assets being
stocks and shares of public limited companies listed with stock exchange in Bangladesh and
bonus shares of the company but income from transfer of government securities is exempted
[section: 32(7)]
nvestment in shares in the Stock Exchanges [SRO # 237-Ain/Income Tax/2011, dated 06 July 2011]
No explanation regarding sources of income will be searched by the tax authority if investment
of un-taxed income is made on primary or secondary shares of any company listed with stock
exchanges in Bangladesh and paid income tax @ 10% on invested amount subject to fulfilling
following conditions:
Person (individual, firm, private limited company etc.) other than public limited company can
take this opportunities;
Investment must be made within 01 July 2011 to 30 June 2012 and declaration of such
investment in prescribed form must be submitted to Deputy Commissioner of Taxes (DCT)
within 15 July 2012 or any time when investment will be made;
Copy of pay order for tax @ 10% on invested amount, portfolio statement and Beneficiary
Owner’s (BO) account ledger should be submitted along with declaration form;
Invested amount should not be withdrawn from capital market before 30 June 2013 and if the
amount or any part of amount is withdrawn, the amount withdrawn shall be treated as income
from other source. But whole invested amount may be mobilized with purchasing and selling
of listed company shares and any gain from transactions is allowed for withdrawal;
Any tax concealment is noticed to tax authority within 30 June 2011 and then action taken as
per section # 93, no such benefit will be availed by the assessee;
Investment shall be shown with assets and liabilities in income tax return and no investment
allowance shall be exercised.
As per SRO # 269-Ain/Income Tax/2010, dated 01 July 2010, assessee has to pay tax on the
income of transfer of stocks and shares as per following schemes:
24
Bangladesh Tax Handbook 2013-2014
a. Company and Firm assessee: all companies [u/s-2(20)] and partnership firms [u/s2(32)] shall pay tax @ 10% on income for transfer of stocks and shares public limited
companies listed with stock exchange. This clause is only applicable for all listed
companies and firms including banks and insurance entity. The tax shall be paid as
advance & besides this all other income will be taxed as prescribed manner and it will
be effective for any transfer of shares from 01 July 2010.
b. Sponsored shareholder assessee: any transfer of shares and stocks of bank, financial
institution, merchant bank, insurance, leasing company, portfolio Management
Company, stock dealer or stock broker company by individual sponsored shareholders
or directors, the assessee has to pay tax @ 5%. On the other hand company assessee
has to pay tax @ 10%. The payment of tax will be treated as advance tax and it will be
effective for any transfer of shares from 01 July 2010.
c. More than 10% securities owned assessee: other than sponsored shareholders or
directors, if any person owned more than 10% securities of listed companies i.e. bank,
financial institution, merchant bank, insurance, leasing company, portfolio management
company, stock dealer or stock broker company has to pay tax @ 5% on income from
transfer of those securities. This will be applicable if any assessee holds more than 10%
securities of listed companies any time within the income year. The tax shall be paid as
advance and it will be effective for any transfer of shares from 01 July 2010.
Assessee has to pay ‘Advance Income Tax’ as per prescribed manner, if any income and/or gain
from transfer of stocks and shares of a company listed with stock exchange [section: 64(2)]
Here securities means all stocks, shares, mutual fund unit, bond, debenture & other of listed
companies and transacted in stock exchange but not government securities. Capital gain on
transfer of listed shares by all individual assessee will be tax exempted.
Collection of tax from transfer of securities or mutual fund unit by sponsored shareholders of
a company etc.
The Securities and Exchange Commission (SEC) or Stock Exchange (SE), as the case may be, at
the time of transfer or declaration of transfer or according consent to transfer of securities
or mutual fund unit of a sponsored shareholder or director or placement holder of a company
or sponsor or placement holder of a mutual fund listed with a stock exchange shall collect tax
@ 5% on the difference between transfer value and cost of acquisition of securities or mutual
fund units.
Here ‘transfer’ includes transfer under a gift, bequest, will or an irrevocable trust and ‘transfer
value’ means closing price prevailing on the day of consent accorded by SEC or SE or when last
traded as the case may be.
Bangladesh Tax Handbook 2013-2014
25
Tax Incentives
Income Tax
7.
Tax Incentive on money borrowed from abroad
SRO # 417-L/76 dated 29 November 1976
Under certain conditions, tax is fully exempted on the Interest on money borrowed from
abroad by:
ƒƒ
Government
ƒƒ
Statutory bodies
ƒƒ
Industrial undertakings
8.
Incentive for investment in residential building and apartment. [Sec: 19BBBBB]
No question as to the source of any sum invested by any person in the residential building or
apartment, if such person pays tax @ 10% on sum invested before the relevant assessment
year.
26
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
27
Income Tax
Income Tax
1.Definitions
a.
Assessee [Section: 2(7)]: Assessee means a person by whom any tax or other sum of
money is payable under Income Tax Ordinance 1984.
b.
Person [Section: 2(46)]: Person includes an individual, a firm, an association of
persons, a Hindu undivided family, a local authority, a company and every other
artificial juridical person.
c.
Income [Section: 2(34)]: Income means any sum of income or gain from whatsoever
source derived, or accruing or arising or received or deemed to be accrue or arise or
to be received under any provision of IT Ordinance 1984.
d.
Tax [Section: 2(62)]: Tax means the income tax payable under the Income Tax Ordinance
1984 and include any additional tax, excess profit tax, penalty, interest, fee or other
charge leviable or payable under the IT Ordinance 1984.
e.
Income Year [Section: 2(35)]: Income Year means the financial year immediately
preceding the assessment year or when accounts are closed on a date within the
financial year, the twelve months ending on the date on which accounts are closed.
f.
Assessment Year [Section: 2(9)]: Assessment Year means the period of twelve months
beginning from first day of July of every year. This is the immediate following financial
year of Income Year. Examples of Accounting Year, Income Year and Assessment year:
Accounting Period/Year
1
2
3
4
5
Bangladesh Tax Handbook 2013-2014
2012-13
2012-13
2013-14
2013-14
2011-12
2012-13
2012-13
2013-14
2012-13
2013-14
g.
Annual Value [Section: 2(3)]: Annual value means the sum arising from letting out any
property and related furniture, fixture and fittings or any sum received as Annual Rent,
whichever is higher.
h.
Basis of Residence [Section: 2(55)]:
i.
28
Accounting Year: July 2012 to June 2013
Accounting Year: January 2012 to
December 2012
Accounting Year: April 2011 to March 2012
Accounting Year: October 2011 to
September 2012
Accounting Year: August 2011 to July 2012
Income Year Assessment Year
Individual: An individual will be Resident: - if he/she stays in Bangladesh for a
period of or for the periods all together at least 182 days or more in the income
year or - if he/she stays in Bangladesh for a period of or for the periods all
together at least 90 days or more in the income year and 365 days or more
during the immediate four preceding years of income year.
Bangladesh Tax Handbook 2013-2014
29
Income Tax
Income Tax
ii.
Company: The company will be resident if the management of its affairs is
situated wholly in Bangladesh in the income year.
iii.
Hindu Undivided Family, Firm, Other Association of Persons: They will be
resident if its control and management of affairs is situated wholly or partly in
Bangladesh in the income year.
i.
Non-resident [Section: 2(42)]: Non-resident means a person who is not a resident.
j.
Salary [2(58) and 18] and Perquisites [2(45) and 30(e)]: Salary includes the following:
yy Basic Salary
yy Contribution to PF
yy Festival Bonus
yy Pension Fund
yy Incentive Bonus, allowable upto 10% of dis- Gratuity Fund
closed net profit [Section # 30(j)]
yy Arrear Salary
yy Superannuation Fund
yy Advance Salary
yy Project pay
yy Leave Encashment
yy Compensation pay
yy Leave Fare Assistance
yy Wages or any other payment
yy Overtime
Income tax shall be deducted and collected at source and paid accordingly. Non-resident not
being a company, capital gain and winnings shall be taxed as per second Schedule of this
Ordinance.
3.
Charge of Surcharge [Section 16A]
Surcharge on income shall be charged for any assessment year at any rate or rates as the case
may be. Again, if any individual assessee whose total net worth more than Tk. 2 crore to 10
crore as per statement of assets, liabilities and expenses, shall have to pay tax @ 10% on tax
payable, whereas the rate of surcharge is 15% for assets more than value of Taka 10 crore.
4.
Charge of Additional Tax [Section 16B]
If a publicly traded company (other than banking or insurance company) does not issue,
declare or distribute dividend or bonus share equivalent to at least 15% of its paid up capital
within 6 months immediately following its income year, it will be charged 5% additional tax
on undistributed profit in addition to tax payable under IT Ordinance 1984. Here undistributed
profit means accumulated profit including free reserve.
5.
Charge of Excess Profit Tax [Section 16C]
If a banking company operating under Bank Company Act 1991 shows profit exceeding 50% of
the aggregate sum of capital and reserve, the bank shall pay @ 15% tax of such excess amount.
Such tax is payable in addition to tax payable under IT Ordinance 1984.
6.
Charge of Minimum Tax [Section 16CCC]
Minimum tax for every firm shall, subject to having more than gross receipts of Taka 50 Lacs
and every company irrespective of its profits or loss liable to pay minimum tax @ 0.50% on
total receipt from business in the income year. Total receipt from business for minimum tax
purpose will be calculated as follows:
Perquisites include the following:
Any benefits other than the items included under salary shall be considered as
perquisites - Examples of perquisites are:
¾¾
Dearness Allowance
¾¾
House Rent allowed up to BDT 2,40,000
¾¾
Conveyance allowed up to BDT 30,000
¾¾
Sum of received or receivable from sale of products;
¾¾
Medical allowed up to actual expenditure
¾¾
Sum of received or receivable from rendering of services;
¾¾
Maximum perquisites allowed BDT 250,000
¾¾
Interests, Commissions, Discounts, Fees or Charges; and
¾¾
Excess of perquisites (over Tk. 250,000) will be taxed as per Organization’s
tax rate.
¾¾
Income received or receivable from any other sources.
¾¾
Any other allowance
2.
Charge of Income Tax [Section 16]
Income tax shall be charged for any assessment year at any rate or rates in accordance with
the provisions of this Ordinance in respect of the total income of the income year or years.
30
Bangladesh Tax Handbook 2013-2014
Minimum tax of the company assessee will be determined on total received or receivable from
all sources of income. Minimum tax will not be applicable, if any company has no received
or receivable from sales or any other sources and if company’s income already taxed under
section # 82C. But minimum tax will be applicable irrespective of net loss or adjustable
accumulated loss from previous years. This minimum tax has to be paid by the company at the
time of filling income tax return and in accordance with section # 74.
Bangladesh Tax Handbook 2013-2014
31
Income Tax
Income Tax
7.
Income Exemption Limit
9.
Minimum Tax (Individual)
Tax exempted minimum income limit of individual assessee has been enhanced from Taka
200,000 to Taka 220,000 for male, while this limit for female, persons aged 65 years &
above has been enhanced from Taka 225,000 to Taka 250,000 and for disabled assessee this
limit enhanced from Taka 275,000 to Taka 300,000 with effect from Income Year 2012-2013
(Assessment Year 2013-2014).
Minimum tax for individual assessee has been changed on the basis of location. Whose taxable
income exceeding exemption limit of Taka 220,000 or Taka 250,000 or Taka 300,000 (as the
case may be) has to pay tax on the basis of following location:
8.
Personal Tax Rate Structure
The person defined under section 2(46) of Income Tax Ordinance (ITO) 1984, every individual
assessee (including Non-resident Bangladeshi), firm (partnership or single), association of
persons, Hindu undivided family, artificial juridical person and Non-Government Organization
(NGO) shall have to pay income tax on their total income according to 5 tier income slabs and
tax rates for the Financial Year 2012-2013 and Assessment Year 2013-2014.
The following table entails comparable scenario of 5 tier income slabs and tax rates for the two
consecutive financial years:
Financial Year 2012-2013
(Assessment Year 2013-2014)
Income Slabs
i. On the first Taka 220,000 of
total income of assesses
On the first Taka 250,000
of total income for Female,
persons aged 65 years & above
assessee
On the first Taka 300,000 of
total income of physically
challanged assessee
ii. On the next Taka 300,000 of
total income
iii. On the next Taka 400,000 of
total income
iv. On the next Taka 300,000 of
total income
v. On the balance of total income
Non-resident (Foreign)
assessee
32
Financial Year 2011-2012
(Assessment Year 2012-2013)
Tax
Rates
Nil
Nil
Nil
10%
15%
20%
25%
25%
Income Slabs
i. On the first Taka 200,000
of total income of assessee
On the first Taka 225,000
of total income for Female,
persons aged 65 years &
above assessee
On the first Taka 275,000 of
total income of physically
challanged assessee
ii. On the next Taka 300,000
of total income
iii. On the next Taka 400,000
of total income
iv. On the next Taka 300,000
of total income
v. On the balance of total
income
Non-resident (Foreign)
assessee
Tax
Rates
Nil
10%
15%
20%
25%
25%
Bangladesh Tax Handbook 2013-2014
Minimum tax is Taka 3,000 for resident of City Corporations.
¾¾
Minimum tax is Taka 2,000 for resident of District Head Quarters and Paurashavas
¾¾
Minimum tax is Taka 1,000 for resident of Upazillas and others
If minimum tax becomes less than Taka 3,000 or Taka 2,000 or Taka 1,000 (as the case may be)
or negative after adjusting Investment Tax Credit, individual assessee has to pay Taka 3,000 or
Taka 2,000 or Taka 1,000 respectively as minimum tax.
Minimum tax exempted income for female, persons aged 65 years & more and disabled
assessee having only agricultural income is Taka 300,000 and 350,000 respectively while for
other assessee, this limit is Taka 270,000.
10.
Incidence of Tax on Non-Resident

A person who is a non-resident is liable to pay tax on the incomes, profits and gains which
are received or deemed to have been received or are deemed to accrue or arise to him in
Bangladesh.

A non-resident assessee is not entitled to any sort of allowance and relief as are admissible
to a resident assessee for the purpose of tax rebate;

A non-resident assessee (other than Bangladeshi non-resident) is liable to pay tax on his total
income @ 25% [Second Schedule]

A Non-resident Bangladeshi (NRB) is subject to pay tax at normal rate, as applicable for a
resident assessee.
11.
Scope of Total Income [Section 17]
Nil
Nil
¾¾
The total income of any income year of any person includes:
Resident
Non-Resident
All income from whatever sources including
received or deemed to be received in
Bangladesh; accrue or arises or deemed to
accrue or arises in Bangladesh; or accrue or
arises outside Bangladesh. All income from whatever sources including
received or deemed to be received in
Bangladesh; accrue or arises or deemed to
accrue or arises in Bangladesh.
Bangladesh Tax Handbook 2013-2014
33
Income Tax
Income Tax
12.
Income Deemed to Accrue or Arise in Bangladesh [Section 18]:
The following income shall be deemed to accrue or arise in Bangladesh, namely:
a.
Any income which falls under the head Salaries, wherever paid, if [Section 18(1)]:
ƒƒ it is earned in Bangladesh; or
ƒƒ it is paid by Bangladesh Government or local authority in the service of such
government or authority;
b.
Any income accruing or arising, whether directly or indirectly, through or from
[Section 18(2)]:
ƒƒ any business connection in Bangladesh;
ƒƒ any property, asset, right, other source of income in Bangladesh;
ƒƒ transfer of capital assets in Bangladesh;
c.
Any dividend paid outside Bangladesh by a Bangladeshi company [Section 18(3)]
d.
Any income by way of interest payable [Section 18(4)]:
ƒƒ by the government; or
ƒƒ by a person who is resident / non-resident in Bangladesh;
e.
Any income by way of fees for technical services payable [Section 18(5)]:
by the government; or
by a person who is resident / non-resident in Bangladesh;
ƒƒ
ƒƒ
f.
Any income by way of royalty payable [Section 18(6)]:
by the government; or
by a person who is resident / non-resident in Bangladesh;
ƒƒ
ƒƒ
13.
Deemed Income [Section 19]
Unexplained cash credits, investments, possession of bullion, unpaid trading liabilities/ loan
etc. will be treated as deemed income, which are mentioned below in brief with relevant heads
of income and respective sub-section:
34
VIII
Difference between the purchase price and fair market value - Income from Other
Sources [Section 19(8)]
IX
Salami or Premium - Income from Other Sources [Section 19(9)]
X
Goodwill, compensation or damages, etc. - Income from Other Sources [Section 19(10)]
XI
Cancellation of indebtedness - Income from Other Sources [Section 19(11)]
XII
Managing Agency Commission - Income from Other Sources [Section 19(12)]
XIII
Lotteries, crossword puzzles etc. - Income from Other Sources [Section 19(13)]
XIV
Income from Insurance Business - Income from Business or Profession [Section
19(14)]
XV
Receipt back of loss, bad debt or expenditure and unpaid trading liability etc.
-Income from Business or Profession [Section 19(15)]
XVI
Income from sale of depreciated assets having been used for the purpose of any
business or profession - Income from Business or Profession [Section 19(16)]
XVII
Income from sale of depreciated assets having been used for agricultural purpose
- Income from Agriculture [Section 19(17)]
XVIII
Income from receipt of insurance, salvage or compensation moneys in respect of
assets having been used for the purpose of any business or profession - Income
from Business or Profession [Section 19(18)]
XIX
Income from receipt of insurance, salvage or compensation moneys in respect of
assets having been used in agriculture - Income from Agriculture [Section 19(19)]
XX
Income from sale of assets of capital nature - Income from Business or Profession
[Section 19(20)]
XXI
Unpaid loan Taka 500,000 is to be recognized as income immediately after expiry
of 3 years of loan taken. Income from Other Source [Section 19(21)]
XXII
Loan or gift received by the assessee shall be deemed to be his income of the year
in which the same is received- Income from Other Source [Section 19(21A)]
XXIII
Initial Capital of Business or Profession is shown in return of income under section
# 82BB transferred fully or partly shall be deemed income of the year in which
transferred being made- Income from Other Source [Section 19(21B)]
XXIV
Un-adjustable security money taken from tenant - Income from House Property
[Section 19(22)]
I
Unexplained Cash credit - Income from Other Source [Section 19(1)]
II
Unrecorded investment or possession of bullion, jewellery etc. - Income from
Other Source [Section 19(2)]
III
Unexplained expenditure - Income from Other Sources [Section 19(3)]
IV
Unrecorded investment - Income from Other Sources [Section 19(4)]
V
Ownership of any money, bullion etc. - Income from Other Sources [Section 19(5)]
XXV
VI
Income received from discontinued business - Income from Business or Profession
[Section 19(6)]
Income from transfer of export quota by Garments Industry - Income from
Business or Profession [Section 19(23)]v
XXVI
VII
Receipt of Dividend - Income from Other Sources [Section 19(7)]
Investment by a company, not listed with any stock exchange, received paid up
capital from any share holder not being received by cross cheque or bank transfer
- Income from Other Source [Section 19(24)]
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
35
Income Tax
Income Tax
XXVII
XXVIII
XXIX
Company assessee receives loan from any other person other than crossed
cheque or bank transfer shall be deemed income for that year of loan receivedIncome from Other Source [Section 19(26)]
Company assessee purchases directly or on hire motor car or jeep and value of
any motor car or jeep exceeds 10% of its paid up capital, then 50% of that exceeds
amount shall be deemed to be income of the year- Income from Other Source
[Section 19(27)]
Individual assessee receives any sum exceeding Taka 500,000 as loan or gift
otherwise than by a crossed cheque or bank transfer-Income from Other source
[Section 19(28)]
14. Special tax treatment in respect of investment in residential building and apartment
[Section: 19BBBBB]
Source of any sum invested by any person in the construction or purchase of any residential
building or apartment for residential purpose and pays tax on the basis of measurement
before the assessment for the relevant assessment year in which the investment is completed,
then tax authority will not raise question on the source of investment.
Area, measurement and tax rates of such residential building or apartment are as follows:
SL.
#
Areas of residential building or
apartment
Plinth area up
to 200 square
meters, Tax
amount per square
meter (Taka)
Plinth area more
than 200 square
meters, Tax amount
per square meter
(Taka)
1
Gulshan Model Town, Banani,
Baridhara, Motijheel Commercial
Area and Dilkusha Commercial Area
of Dhaka
5,000/-
7,000/-
2
Dhanmandi Residential Area,
Defence Officers Housing Society
(DOHS), Mahakhali, Lalmatia Housing Society, Uttara Model Town,
Bashundhara Residential Area,
Dhaka Cantonment, Kawran Bazar,
Bijaynagar, Segunbagicha, Nikunja
of Dhaka, and Panchlaish, Khulshi,
Agrabad and Nasirabad Area of
Chittagong
4,000/-
5,000/-
Other areas of City Corporations
except serial nos. 1 & 2 above
2,000/-
3
SL.
#
3,000/-
Areas of residential building or
apartment
4
Areas of Paurasabhas of any
district headquarters
5
Upazilla and Others
6
It already owned a building or
apartment in any City Corporation
before such investment is completed
or the assessee invests in two or
more Buildings or Apartments
Plinth area up
to 200 square
meters, Tax
amount per square
meter (Taka)
Plinth area more
than 200 square
meters, Tax amount
per square meter
(Taka)
1,000/-
1,500/-
700/-
1,000/-
As per above tax
Plus extra 20% of
above calculated
tax
As per above tax
Plus extra 20% of
above calculated tax
15. Special tax treatment in respect of investment in the purchase of bond under Bangladesh
Infrastructure Finance Fund (BIFF) [Section: 19C]
No question shall be raised as to the source of any investment by any person in the purchase
of bond issued under Bangladesh Infrastructure Finance Fund (BIFF) during the period
between 01 July 2010 and 30 June 2012 (both days inclusive), if assessee pays tax @ 10% on
such investment before filling return of income for the relevant income year. Any person may
invest under this scheme.
16. Special tax treatment in respect of investment in the purchase of Bangladesh Government
Treasury Bond [section # 19D]
Notwithstanding anything contained in any other provision of the Ordinance, no question as
to the source of any sum invested by any person, being an individual, in the purchase of
Bangladesh Government Treasury Bond shall be raised if such person pays, before the filling
of return of income for that income year as per provisions laid down in section # 75(2), tax @
10% on sum invested.
17.
Voluntary disclosure of income [section # 19E]
Any person, who has not been assessed tax for previous assessment year or years or who has
been assessed for tax lower than actual tax those year or years may disclose such income in
the respective heads of income in the return of income along with the income for the current
assessment year.
Return of income under this provision shall be treated as valid, if:
¾¾
The return of income is submitted within the time as specified u/s 75 (2)
¾¾
Tax payable at applicable rate on total income inculding such income and penalty
@310% proportionate to such income are paid before submission of Return
Continued
36
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
37
Income Tax
¾¾
Income Tax
A declaration is enclosed with the return of income including
¾¾
any salary paid or allowed to him in the income year by or on behalf of an
employer, though not due or before it became due to him;
¾¾
any arrears of salary paid or allowed to him in the income year by or on behalf
of an employer, if not charged to income tax for any earlier income year;
ƒƒ Name of the person declaring
ƒƒ Head of the declared income and amount thereof; and
ƒƒ Amount of tax and penalty paid thereof.
¾¾
¾¾
ii.
A notice under clause (b) of sub-section (3) of section 93 has been issued before
submission of such return of income
House rent allowance receivable in cash [Rule # 33A]: House rent allowance in Taka
20,000 per month or 50% of basic salary or, whichever is less, shall be included in
income.
iii.
A notice on a banking company under clause (f) of section 113 has been issued before
submission of such return of income;
Rent free accommodation [Rule # 33B]: The rental value of the accommodation or 25%
of basic salary, whichever is less, shall be included in income.
iv.
Conveyance allowance receivable in cash with no conveyance facility [Rule # 33C]:
Allowable amount is Taka 30,000 per annum. The allowance so receivable in excess of
Taka 30,000 per annum shall be included in income.
v.
Conveyance provided partly or exclusively for personal or private use [Rule # 33D]: An
amount equal to 7.5% of basic salary shall be included in income.
vi.
Additional conveyance allowance [Rule # 33E]: The whole amount shall be included in
income.
vii.
Free or concessional passage for travel abroad or within Bangladesh [Rule # 33G]:
The provision of this section shall not apply, where -
¾¾
Any proceeding under section 164,165,166 has been initiated before submission of such
return of income ;or
¾¾
Any income declared under this section is –
ƒƒ
Not derived from any legitimate source of income or
ƒƒ
Derived from any criminal activities under any other law for the time being in force.
The income shown under this section may be invested in income generating activities or any
section including the following:
¾¾
Where free or concessional passage for travel abroad or within Bangladesh
is provided by the employer to an employee (including the members of his
household and dependents) shall be included in the income of the employee:
Building or apartment or land;

Where the passage is provided in accordance with the terms of employment:
¾¾
Securities listed with a stock exchange in Bangladesh; or
¾¾
Any trade, commercial, or industrial venture engaged in production of goods or services.
An amount equal to the sum by which the cash payments, if any, made by
employer exceeds the actual expenditure incurred by the employee;
¾¾
Where the passage is not in accordance with the terms of employment:
The whole of the amount paid in cash and if not paid in cash, the amount which
would have been expended by the employee if not provided by the employer;
¾¾
Where free concessional passage for travel abroad is availed more than once
in two years:
The whole of the amount paid in cash, if any, for such additional passage or if
no cash payment is made, the amount which would have been expended for
this passage if not provided by the employer shall be included in his income.
¾¾
Where the transport is provided free of cost or at a concessional rate:
By an undertaking engaged in the transport of passengers or the carriage
¾¾
Industrial undertaking including its expansion;
¾¾
Balancing ,moderating, renovation and extension of an existing industry;
¾¾
18.
Income from Salary [Section 21]
Any income classifiable as salaries irrespective of its place of payment shall be deemed to be
income accruing or arising income in Bangladesh if it is earned in Bangladesh or it is paid by
the government or local authority in Bangladesh to a citizen in Bangladesh.
Salary once included in any year on due basis or advance payment basis is not includible in the
income of any other year.
i.
Income classified under the head Salaries: Salaries include the following-
¾¾
38
any salary due from an employer to the assessee in the income year whether
paid or not;
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
39
Income Tax
Income Tax
of goods of an employee of the undertaking in any conveyance owned or
charted by the undertaking for the purpose of the transport of passengers,
nothing shall be added in his income;
viii. Entertainment allowance [Rule # 33H]: The whole amount shall be included in income
except for free tea, coffee, beverages or the like thereof provided at the office premises
during the course of work.
ix. Medical expenses [Rule # 33I]: Receipts / receivable from employer in excess of actual
expenditure shall be included in the income of the assessee.
x. Other benefits [Rule # 33J]: Equivalent amount shall be included in income.
xi. Allowable exemptions on the income of Sponsor / Shareholder Directors [Rule # 33(2)(b)]:
As per SRO 207-Ain/2005 dated 06.07.2005, a shareholder, being director of more than one
company, shall be entitled to the benefits under rule # 33 from one company only.
19.
Income from Interest on Securities [Section 22 & 23]
Incomes classifiable under the head Interest on Securities are:
20.
a.
Interest receivable by the assessee on any security of the government or any security
approved by the government;
b.
Interest receivable by him on debenture or other securities of money issued by or on
behalf of a local authority or company;
c.
Deductions permissible in the determination of income from interest on securities are:
Commission or charges deducted from interest by a bank realizing the interest
on behalf of the assessee;
ii.
Interest payable on money borrowed for the purpose of investment in the
securities;
Provided that allowance or deduction on account of interest or commission
in respect of or allocable to the tax-free government securities shall not be
allowed. Deduction will also not be allowed in respect of interest payable
outside Bangladesh on which tax has not been paid or deducted.
ii.
iii.
iv.
v.
vi.
vii.
viii
ix.
b.
Maintenance allowances: (25% of annual value in case it is used for residential
purposes, and 30% of annual value in case it is used for commercial purpose)
Insurance premium
Interest on mortgage or other capital charges
Any tax not being a charge leviable on annual basis
Ground rent
Land development tax
Interest payable on capital borrowed for the purpose of acquisition, construction,
reconstruction, repair or renovation of the house property; subject to owner’s
self occupied portion for which interest on borrowed capital not exceeding Taka
2,000,000.
Proportionate vacancy allowances
Interest payable during construction period to be allowed in 3 subsequent equal
installments.
Interest or annual charge payable outside Bangladesh shall not be allowed as deduction on
which tax has not been paid or deducted at source.
21.
Income from Business or Profession [Section 28]
Income from business or profession includes the following:
i.
profits and gains of any business or profession;
ii.
income of trade or professional association derived on account of specific services
performed for its members;
iii.
value of any benefit or perquisite arising from business or exercise of profession;
iv.
receipt back of loss, bad debt or expenditure and unpaid trading liability as referred
to section 19 (15);
v.
income from sale of asset of depreciated asset as referred to section 19 (16);
vi.
income from receipt of insurance, salvage or compensation money as referred to
section 19 (18);
vii. income from sale of asset of capital nature as referred to section 19 (20);
viii income from transfer of export quota as referred to section 19 (23).
Income from House Property [Section 24 & 25]
a.
40
i.
i.
Income from house property whether used for commercial or residential purposes
is taxable on the basis of its annual value. The value determined by the tax authority
u/s- 2(3) will be treated as annual value.
Deductions allowable in the determination of income from house property: The
following deductions are allowable in determining the net income:
Bangladesh Tax Handbook 2013-2014
22.
Allowable Deductions on income from Business or Profession [Section 29(1)]
The allowable deductions which have been specifically mentioned are the following:
i.
Rent for the business premises [Para # 1(i)]
ii.
Repairs to hired business premises [Para # 1(ii)]
Bangladesh Tax Handbook 2013-2014
41
Income Tax
iii.
Bank interest paid or any profit shared with a bank run on Islamic principles in
respect of capital borrowed for the purpose of business or profession [Para #1(iii)]
iv.
Share of profit paid by a bank run on Islamic principles [Para # 1(iv)]
v.
An amount not exceeding 5% of the profit transferred to Special Reserve by
financial institutions approved by the Government [Para # 1(v)]
vi
Repairs to own buildings, plants, machinery, furniture etc. [Para # 1(vi)
vii.
Insurance premium for insurance against risk of damage etc. of buildings plant etc.
used in business or profession [Para # 1(vii)]
viii
Depreciation of building, machinery, plant or furniture being owned by the assessee
or bridge or road or fly over owned by a physical infrastructure undertaking
and used for business or profession; the allowances are admissible under Third
Schedule [Para # 1(viii)]
In respect of amortization of license fees as admissible under the third schedule
[Para # 1(viiia)]
ix
42
Income Tax
Investment allowance for a passenger vessel or a fishing trawler, which is entitled
to special depreciation at 20% of the original cost subject to stipulated conditions
(Third Schedule, Para # 8) [Para # 1(ix)]
xvii
Provision for bad and doubtful debt and interest thereon made by a commercial
bank including the Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank and
Karmosangsthan Bank for a sum equal to 1% of the outstanding loan including
interest thereon or the amount of actual provision, whichever is less, subject to
the specified conditions, allowable during the assessment years 2001-2002,20022003,2003-2004 and 2004-2005, 2005-06 and 2006-07;
If any amount out of the provision for bad and doubtful debt and interest thereon,
which has been allowed, is ultimately recovered, the amount so recovered shall be
deemed to be profit of the year in which it is recovered [Para # 1(xviiiaa)]
xviii
Any expenditure, not being capital expenditure, laid out or expected on scientific
research related to the business [Para # 1(xix)]
xix
Any expenditure of a capital nature laid out or expended on scientific research
related to the business subject to the stipulated conditions [Para # 1(xx)]
xx
Any sum paid to scientific research institute etc. subject to the stipulated
conditions [Para # 1(xxi)]
xxi
Any sum, not being of capital nature laid out or expended on any educational
institute or hospital established for the benefit of employees subject to the
stipulated condition [Para # 1(xxii)]
xxii
Expenditure (including capital expenditure) incurred on any educational institution
or hospital established for benefit of employees and their dependents is
deductible provided no charge is made for the services rendered by such hospital
or institution. Expenditure incurred on the construction, maintenance or running
of any institute for the training of industrial workers will be similarly deductible
[Para # 1(xxiii)]
x
Obsolescence allowance for building, machinery or plant, which has been
discarded, demolished or destroyed, under the stated circumstances and to the
prescribed extent (Third Schedule, Para # 10) [Para # 1(xi)]
xi
Obsolescence allowance and allowance on account of death or useless animals;
[Para # 1(xii)]
xxiii
Any expenditure laid out or expended on the training of citizens of Bangladesh
in connection with a scheme approved by the National Board of Revenue [Para #
1(xxiv)]
xii
Land development tax or rent, local rates, etc. [Para # 1(xiii)]
xxiv
Expenses incurred in connection with visits abroad in a Trade Delegation
sponsored by Government [Para # 1(xxv)]
xiii
Bonus paid to employees including festival bonus [Para # 1(xiv)]
xxv.
xiv
The amount of bad debt, which is established to have become irrecoverable, under
the stated circumstances [Para # 1(xv)]
Subscription paid to a registered trade organization or to a recognized professional
institution is allowable expenditure for the purpose of computation of income
from business [Para # 1(xxvi)]
xv
The amount of bad debt written off as irrecoverable but deduction not allowed on
the ground that it was not then irrecoverable, the amount which was established
to be irrecoverable [Para # 1(xvi)]
xxvi.
Any expenditure, not being in the nature of capital expenditure or personal
expenses of the assessee laid out or expended wholly and exclusively for the
purpose of the business or profession of the assessee [Para # 1(xxvii)]
xvi
The amount for bad debt having been irrecoverable in an earlier year, is allowable
for the earlier year under the stated circumstances and with the consent of the
assessee [Para # 1(xvii)]
xxvii.
Allowance in respect of expenditure on publicity and advertisement [Section 30,
Para # f(iii)]
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
43
Income Tax
xxviii.
xxvix.
xxx.
Income Tax
Any allowance in respect of expenditure on entertainment not in excess of the
amount prescribed in this behalf, Ceiling of admissible expenditure has been
prescribed in Rule 65 of Income Tax Rules, 1984 [Section 30, Para # f(i)]
üOn the first Taka 1,000,000 of income from business or profession : 4%
üOn the balance income
: 2%
iii.
Foreign travel expenses for holidaying and recreation incurred by business houses
on account of their employees and their dependants not exceeding the amount
prescribed in this behalf under Rules 65A of the Income Tax Rules, 1984 [Section
30, Para # f(ii)]
The amount has been restricted upto 3 months’ basic salary or three-fourth of
the actual expenditure whichever is less, not oftener than once in every 2 years;
subject to sum exceeding Taka 10,000 shall not be allowed as deduction unless
such payment is made through bank.
v.
iv.
vi.
vii.
Allowable expenditure on distribution of Free-Sample {(Rule: 65C), (Section
30,Para # f(iv)}
In respect of industry other than pharmaceutical industry:
Turnover upto Taka 5 crore : 1.50%
Turnover exceeding Taka 5 crore but not exceeding
Taka 10 crore : 0.75%
Turnover exceeding Taka 10 crore : 0.375%
viii.
In respect of pharmaceutical industry:
Turnover upto Taka 5 crore : 2.0%
Turnover exceeding Taka 5 crore but not exceeding
Taka 10 crore : 1.0%
Turnover exceeding Taka 10 crore : 0.50%
xxxi
Head Office Expenses for a Company not incorporated in Bangladesh, allowable
upto 10% of the net profitt (Section 30g)
xxxii
Technical Assistance Fee / Royalty allowable upto 5% of the profit (Section 30h)
xxxiii
Incentive Bonus allowable upto 10% of the disclosed net profit (Section 30j)
ix.
x.
xi.
xii.
23.
Deductions are not admissible in certain circumstances [Section 30]
xiii.
The following expenditures are not admissible deductions in the determination on income
from business or profession:
xiv.
i.
ii.
44
Payment of salaries if tax is not deducted at the time of payment and paid thereon
in accordance with section 50 [Para # 30(a)]
Any payment made by an assessee to any person if tax thereon has not been
deducted and credited in accordance with Chapter VII and VAT thereon has not been
collected or deducted and credited in accordance with VAT Act. 1991 [Para # 30(aa)]
Bangladesh Tax Handbook 2013-2014
Payment of interest, salary, commission or remuneration by a firm or an association
of persons to any partner of the firm or any member of the association as the case
may be [Para # 30(b)]
Brokerage or commission paid to a non-resident if tax has not been deducted there
from under section 56 [Para # 30(c)]
Payment to a provident or other fund unless effective arrangement has been made
for deduction of tax at source while making the payments from the fund which are
taxable under the head Salaries [Para # 30(d)]
Amount of perquisites or other benefits paid, as defined under Section 2(45), to any
employee in excess of Taka 250,000 [Para # 30(e)]
Provided that this ceiling shall not be applicable to an employer where perquisites
were paid to an employee in pursuance of any government decision to implement
the recommendation of a Wage Board constituted by the government;
The amount of expenditure in excess of the prescribed rates and as is not, in the
case of sales and services liable to excise duty, supported by excise stamp or seal in
respect of the following items [Para # 30(f)]
Entertainment (Rule # 65)
Foreign travels of employees and their dependants for holidaying and recreation
(Rule # 65A)
Distribution of free samples (Rule # 65C)
Any expenditure exceeding 10% of the profit under the head office expenses by a
company not incorporated in Bangladesh under Companies Act 1994 [Para # 30(g)]
Any payment by way of royalty, technical services fee, technical know how fee or
technical assistance fee exceeding 8% of the profit [Para # 30(h)]
Any payment by way of salary or remuneration made otherwise than by crossed
cheque or bank transfer by a person to any employee having gross monthly salary
of Taka 15,000 or more [Para # 30(i)]
Any expenditure by way of incentive bonus exceeding 10% of the disclosed net
profit [Para # 30(j)]
Any expenditure by way of overseas traveling exceeding 1% of the disclosed
turnover [Para # 30(k)]
Any payment by way of commission paid or discount made to its shareholder
director by a company [Para # 30(l)]
Any payment by a person exceeding Taka 50,000 or more, otherwise than by
a crossed cheque or bank transfer excluding payment for the purchase of raw
materials and payment for government obligation.
24.
Capital Gains [Section 31]
Any gains arising from transfer of a capital asset (both movable and immovable) as defined in
Section 2(15) of the Income Tax Ordinance is chargeable to income tax in accordance with the
Bangladesh Tax Handbook 2013-2014
45
Income Tax
Income Tax
Second Schedule, Para # 2 of the Income Tax Ordinance, 1984 which prescribes rates of income
tax in certain special cases;
Transfer of Capital Asset of a firm to a new company: Capital gain arising from transfer
of capital asset of a firm to a new company registered under companies Act 1994 and
the whole amount of capital gain is invested in the equity of the said company by the
partners of the firm, then the capital gain shall not be charged to tax as income of the
year of transfer [Section 32(11)]
v.
Transfer of Stocks and Shares of a public company by a non-resident: Capital
gain arising in the hand of a non-resident from transfer of stocks or shares of a
listed company is exempted from tax provided such assessee is entitled to similar
exemption in the country in which he is a resident [Section 31]
In determination of the gain on transfer of any expenditure incurred solely in connection with
transfer of the capital asset and the cost of acquisition including expenditure, if any, incurred
for the provement of asset are deductible from the sale value. In case of acquisition of asset:
Events
Value of cost capital assets
i.
By purchase the actual cost of the Actual cost of the previous owner as reduced by
asset;
depreciation allowance;
ii.
Property acquired by gift,
bequest or will or under a
transfer on a trust or distribution
of capital asset on liquidation of
company or solution of a firm or
association of persons;
Where actual cost of the previous owner as
reduced by depreciation allowance. Where
actual cost to the previous owner cannot be
ascertained, fair market value of assets on the
date on which it became the property of
previous owner, shall be taken to be the cost of
acquisition in the hand of present owner;
25.
Exemption of Capital Gains from tax [Section 32]
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.
Following are the cases of full or partial exemptions:
i.
26.
Tax in respect of Capital Gain:
In Case of Company: [Second Schedule,
Para # 2(a)]
Capital gain will be taxed as a block of
income separate from other income of the
assessee company at flat rate
In Case of a person other than Company:
[Second Schedule, Para # 2(b)]
Where the capital gain arises as result of a
disposal after not more than 5 years from
the date of acquisition
Where the capital gain arises as result of a
disposal after 5 years from the date of
acquisition;
Transfer of capital asset used in the business with following rules: [Section 32(5)]
yy a new capital asset for the purpose of business or profession has to be purchased
within 1 year before or after the date of transfer;
yy when capital gain is greater than the cost of new asset, capital gain upto the extent
of cost of acquisition of new asset shall be exempted and balance shall be charged
to tax;
ii.
iii.
yy when capital gain is equal or less than the cost of new asset, no tax shall be
charged on the capital gain;
Capital gain arising out of transfer of Government Securities is exempted from tax
[Section 32(7)]
Transfer of Buildings and Lands to a new company for setting up an industry and the
whole amount of capital gain arising out of such transfer is invested in the equity of
the said company, the capital gain shall not be charged to tax as income of the year
of transfer [Section 32(10)]
Bangladesh Tax Handbook 2013-2014
Capital Gain Tax [Second Schedule]
Assessee
A declaration shall have to be made before the assessment is made;
46
iv.
New Rate
AY 2013-14
Previous Rate
AY 2012-13
15%
15%
Applicable rate
on total income
including capital
gain
Tax payable at the
rate applicable
on total income
including said
income @ 15% on
the capital
Applicable rate on
total income including
capital gain
Tax payable at the rate
applicable on total
income including said
income @ 15% on the
capital
27.
Income from Other Sources: [Section 33]
Following income of an assessee is assessable under the Income from Other Sources:
a. Dividend;
b.Interest;
c.
Royalties and Technical Services;
d.
Income from letting of machinery, plant, furniture, building etc;
e.
Deemed Income [Section 19 (1, 2, 3, 4, 5, 7, 8, 9, 10, 11, 12, 13, 21 & 24)]
f.
Income of any kind which is not classifiable under any other heads specified in Section 20.
Bangladesh Tax Handbook 2013-2014
47
Income Tax
Income Tax
28.
Set-Off of Losses [Section 37]
Whenever an assessee sustains a loss in any year under any of the following heads of income,
such as, property, interest on securities, business or profession, agricultural income and other
sources, he is entitled to set-off the loss so sustained against his income, profits or gains under
any other head in that year. Any speculative transactions undertaken by an assessee should be
treated as a distinct and separate business and any loss incurred in those transactions should
be set-off only against the income, profits or gains of that business. Loss on Capital Gains
cannot be set-off against income from any other head. Such loss can be set-off only against
the Capital Gains. Any loss from Business or Profession shall not be set off against income from
House Property in the year such loss crop up.
Carry forward of loss [Section 38]
29.
30.
Whenever an assessee sustains any loss under the head of Business or Profession not being
loss from speculation business and the loss cannot wholly be set-off against income under any
other head i.e. salary, property, agricultural income, interest on securities and income from
other sources, such unadjusted loss shall be carried forward to the following year to be set-off
against the profits and gains of the same business or profession. The only exception in this
regard is that the loss sustained in speculative business shall be carried forward to be set-off
only against speculative profits, if any, of the following year. Loss cannot be carried forward
for more than six successive assessment years.
Carry forward of Depreciation Allowance [Section 42(6)]
Depreciation allowance which cannot be given full effect of, in any year, because of there
being no profits or of inadequate profits, unadjusted allowances or portion thereof as the case
may be, shall be carried forward to the next year or so on for succeeding years and be part of
allowance for that year.
While setting-off loss on account of depreciation allowance, effect shall first be given to
business loss (Section 38) including loss from speculation business (Section 39).
iii
Income of a religious or charitable institution derived from voluntary contributions.
[Para # 2]
iv
Income of Local Government. [Para # 3]
v
Income of Provident Fund and other Funds. [Para # 4]
vi
Traveling Allowances, etc. (to meet expenses wholly and necessarily incurred in
performance of the duties of an office or employment of profit) incurred. [Para # 5]
vii
Income of Trustees on behalf of any recognized fund. [Para # 6]
viii
Income of the personnel of the foreign missions, not being a citizen of Bangladesh.
[Para # 7]
ix
Pension. [Para # 8]
x
Income from dividend amounting to Taka 10,000.
xi
Share of Capital Gains of a Partner of a Firm. [Para # 18]
xii
Income of a member of Hindu Undivided Family. [Para # 19]
xiii
Gratuity. [Para # 20]
xiv
Any payment received from Provident Fund and other Funds (PF, WPPF and approved
superannuation fund). [Para # 21]
xv
Income from dividend of a mutual fund or a unit fund upto Taka 25,000. [Para # 22A]
xvi
Interest on tax-free Government Securities. [Para # 24]
xvii
Interest on the balance in a Recognized Provident Fund. [Para # 25]
xviii
Payment received on voluntary retirement. [Para # 26]
xix
Income of indigenous Hillman. [Para # 27]
xx
Income from export business. [Para # 28]
xxi
Income from agriculture upto Taka 50,000. [Para # 29]
xxii
Capital Gains from Machinery or Plant used in business or profession. [Para # 31A]
31. Income fully exempted from Tax subject to fulfillment of prescribed conditions and
limitations [Section 44(1) and Part A of Sixth Schedule]
xxiii
Income from the business of Software Development and Information Technology
Enabled Services (ITES) upto 30 June 2015. [Para # 33]
Certain incomes are totally exempted from tax and they are not includable with other income
even for rate purpose. Income specified in Part-A of the Sixth Schedule (Exclusions from Total
Income) of the Income Tax Ordinance 1984 are exempt and excluded from the computation of
total income subject to fulfillment of limits, conditions and qualifications laid down therein:
xxiv
Income from fisheries (not applicable to a company), poultry, production &
marketing of seeds, farming (cattle, dairy, frog & mushroom), horticulture,
floriculture and sericulture; if such income exceeds Taka 150,000 and at least 10%
of income invested in bond & govt. Securities. [Para # 34]
48
xxv
Income from the export of handicrafts upto 30 June 2015. [Para # 35]
i
Income from property held under Trust but shall not apply to NGOs registered with
NGO Affairs Bureau. [Para # 1]
xxvi
Any amount paid by govt. as tax on behalf of Petroleum Exploration Company under
Production Sharing Contract (PSC). [Para # 36]
ii
Any income derived from micro credit operations by NGOs registered with NGOAB.
[Para # 1A]
xxvii
Income from educational activities of private Agricultural College and University.
[Para # 37]
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
49
Income Tax
Income Tax
xxviii Any income derived from any building situated in any area of Bangladesh (other
than areas of city corporation, Cantonment board, Tongi Upazila, Naryangonj
Paurashava, Gazipur , Paurashava and any Paurashava under Dhaka district), not
less than five storied having at least ten flats, constructed at any time between
01 July 2009 and 30 June 2014 for ten years from the date of completion of
construction of the building has been declared tax free.
ii.
The undertaking is managed either by (i) a body corporate established by or
under an act of Parliament having head office in Bangladesh or (ii) a company
defined under Companies Act 1913 or 1994 having subscribed & paid up capital
of not less than Taka 1,000,000 on the date of commencement of commercial
production;
Income from any Small and Medium Enterprise (SME) having annual turnover not
more than Taka 3,000,000. [Para # 39]
iii.
The undertaking is engaged in: [Section 46(B), Para # 2]
xxx
Income from Zero Coupon Bond. [Para # 40]

xxxi
Income from poultry farming for the period from July 2011 to June 2015. [Para # 42]
xxxii
Any profits and gains under the head “Capital Gains” arising from the transfer of
stocks or Shares of a public company in listed in any stock exchange in Bangladesh
of an assessee being a non-resident subject to the condition that such assessee is
entitled to similar exemption in the country in which he is a resident . [Para # 43]
The Industrial Undertaking in the production of textile, jute, high value garments
(overcoats, jackets & suits), pharmaceuticals, melamine, plastic, ceramics,
sanitary, steel, fertilizer, computer and agriculture machinery, energy saving
bulbs, solar energy panel, barrier contraceptive or rubber latex etc;

Providing on commercial basis, physical infrastructure facilities;

Tourist industry as defined in the explanation to Section 46;
iv. 30% of the tax exempted income to be invested in the same undertaking
or for a new industry during the period of exemption or within one year of
expiring tax holiday period. An additional 10% profit has to be invested each
year within 3 months of closing the income year by purchasing shares of listed
companies in Bangladesh;
xxxvi Income of an assessee donated in an income year to any fund established by or
under the provisions of Trust of Prime Minister’s Education Assistance Act 2012
subject to a maximum of :
twenty percent (20%) of income of a company or Taka eight crore, whichever is
less. [Para # 47 (a)]
Provided that the purchase of shares of a listed company except
readymade garments industry and if 40% of income re-invested between 01
July 2008 and 30 June 2013 in the said or new industrial undertaking during
the period or within one year from end of the period.
v.
The undertaking is not formed by splitting up or by reconstruction or
reconstitution of an existing business or by transfer to a new business of any
machinery or plant used in Bangladesh at any time before commencement of
the new business;
Twenty percent (20%) of income of an assessee other than a company or one crore
Taka, whichever is less. [Para # 47 (b)]
vi.
An application shall be filed with the Board for approval of the undertaking
within 6 months from the end of the month of commencement of commercial
production or operation, and the undertaking must be approved by the Board;
vii.
A clearance certificate from the Directorate of Environment shall be obtained
for the relevant income year.
xxxiv An amount of income derived by an industrial undertaking engaged in the
production of rice bran oil and commencing commercial production by thirtieth
day of June 2015 at the specified rates. [Para # 45]
xxxv
50
The undertaking is set up in Bangladesh between 01 July 2011 and 30 June 2015;
xxix
xxxiii An amount of income derived from cinema hall or Cineplex which starts commercial
exhibition between the first day of July 2012 and thirtieth day of June 2015. [Para
# 44]
32.
i.
An amount equal to fifty percent of the income of an assessee derived from the
production of corn/maize or sugar beet. [Para # 46]
Tax Holiday for newly established industrial undertaking, Tourist Industry and Physical
Infrastructure facility set-up between the period of July 2011 to June 2015 etc. in certain
cases [Section 46B]
A.
Condition for Tax Holiday
Period of tax holiday has been further extended for 3 years beyond 30 June 2011 in
respect of industrial undertaking, tourist industry and physical infrastructure facility
subject to following conditions:
Bangladesh Tax Handbook 2013-2014
B.
Period of Exemption [Section 46(B), Para # 1]
Dhaka and Chittagong divisions, excluding Dhaka, Narayanganj, Gazipur,Chittagong,
Rangamati, Bandarban and Khagrachari districts, for a period of five years beginning
with the month of commencement of commercial production of the said undertaking:
Bangladesh Tax Handbook 2013-2014
51
Income Tax
Income Tax
Period of Exemption
For the first two years ( 1st and 2nd year)
For the third year
60% of income
For the fourth year
40% of income
For the fifth year
20% of income
For the first and second year
c.
52
33.
List of eligible sectors for Tax Holiday [Section 46B]
i.
If the said undertaking is set-up in Rajshahi, Khulna and Barisal divisions, and hill
districts of Rangamati, Bandarban, and Khagrachari; for a period of 7 years beginning
with the month of commencement of commercial production or operation;
Period of Exemption
Rate of Exemption
100% of income
Rate of Exemption
100% of income
For the third year
70% of income
For the fourth year
55% of income
For the fifth year
40% of income
For the sixth year
25% of income
For the seventh year
10% of income
ii.
Provided that an industry engaged in the production of bio-fertilizer or petrochemicals shall be entitled for exemption from tax even if it is set up in the districts of
Dhaka, Gazipur, Narayanganj or Chittagong.
Computation of Tax Holiday Income
¾¾
The profit and gain shall be computed under the head income from business
or profession (section 28)
¾¾
Loss sustained in a tax holiday undertaking shall not be set off against profits
of taxable units. Loss shall be carried forward to be set off against income from
same undertaking in the following years, but not beyond tax holiday period;
¾¾
Only normal depreciation allowance, if any, shall be allowed;
¾¾
Any dividend distributed by a tax-holiday company to its shareholders out of
its exempted profit shall not be exempt from tax;
¾¾
Capital gains earned by tax holiday undertaking shall not be exempt from tax;
¾¾
Income of the said undertaking resulting from disallowance made under
section 30 shall not be exempted from tax;
Bangladesh Tax Handbook 2013-2014
Industrial Undertaking
yy Textile;
yy Insecticide & pesticide;
yy Jute goods;
yy Computer hardware;
yy High Value Readymade Garments
(overcoat, jackets, suits);
yy Residential hotel having facility of
three star or more;
yy Pharmaceuticals;
yy Petro chemicals;
yy Barrier contraceptive or rubber
latex.
yy Basic raw materials of drugs,
chemicals & Pharmaceuticals;
yy Plastic products;
yy Agricultural machine;
yy Ceramics & sanitary ware;
yy Boilers & compressors;
yy Steel from iron ore;
yy Textile machinery;
yy Sanitary ware;
yy Energy saving bulb;
yy MS Rod & CI Sheet;
yy Solar energy panel;
yy Fertilizer;
yy Melamine;
Physical Infrastructure Facility:
yy Sea or river port;
yy Mono-rail & underground rail;
yy Container terminals, internal
container depot (ICD) & container
freight station (CFS);
yy Telecommunication other than
mobile phone
yy LNG terminal and transmission line;
yy Large water treatment plant &
supply through pipe line;
yy CNG terminal and transmission line; yy Waste treatment plant;
yy Gas pipe line;
yy Solar energy plant;
yy Flyover;
yy Export processing zone;
And any other category of industrial including as the government may be notification
in to official Gazette specify.
iii.
Tourism Industry:
Residential hotel having facility of three star or more and any other category of tourist
industry facility as the Government may by notification in the official Gazette specify.
Bangladesh Tax Handbook 2013-2014
53
Income Tax
34.
Income Tax
Tax Holiday for Hospitals [SRO 204-Ain/IT/2005 dated 6th July 2005]
yy gas pipe line,
a.
A newly established private hospital will be eligible for exemption of income for
another 5 years subject to the following conditions:
yy Information and Communication Technology yy Liquefied Natural Gas (LNG)
b.
The hospital is owned by a company registered under the Companies Act 1913 or 1994;
yy Information Technology (IT) park;
c.
The hospital is established between the period 1st July 1999 to 1st July 2008 in the
private sector;
yy large water treatment plant and supply
d.
The hospital is housed in a building constructed on the company’s own land;
yy any other category of physical infrastructure yy renewable energy (e.g. energy
e.
The hospital has number of beds (i) 200 beds in case of general hospital (ii) 50 beds
in case of specialized hospital for heart, kidney and cancer patients;
f.
10% of the beds must be kept reserved for treatment of poor free of charge;
35. Exemption from tax of newly established physical infrastructure facility set up between the
period of July 2011 and June 2015, etc. in certain cases [section # 46C]

Subject to the provisions of this Ordinance, income, profits and gains under section 28 from
physical infrastructure facility (hereinafter referred to as the said facility) set up in Bangladesh
between the first day of July 2011 and the thirtieth day of June 2015 (both days inclusive) shall
be exempted from the tax payable under this Ordinance for the 10 years beginning with the
month of commencement of commercial operation, and at the rate, specified below:
Period of Exemption
For the first and second year
For the third year
F or the fourth year
For the fifth year
For the sixth year
For the seventh year
For the eighth year
For the ninth year
For the tenth year
For the purpose of this section, “physical infrastructure facility” means,-
yy
yy
yy
yy
54
Rate of Exemption
100% of income
80% of income
70% of income
60% of income
50% of income
40% of income
30% of income
20% of income
10% of income
deep sea port;
elevated expressway;
export processing zone;
flyover
yy
yy
yy
yy
underground rail;
(ICT) village or software technology zone;
through pipe line;
sea or river port;
Bangladesh Tax Handbook 2013-2014
terminal and transmission line;
yy waste treatment plant; or
yy toll road and toll bridge;
facility as the Government may, by notification
in the official Gazette, specify.
saving bulb, solar energy plant,
windmill);
The exemption shall apply to the said facility if it fulfills the following conditions, namely:-
√√
that the said facility is owned and managed by(i) a body corporate established by or under any law for the time being in force
with its head office in Bangladesh; or
(ii) a company as defined in company law, 1994 with registered office in Bangladesh
and having a subscribed and paid up capital of not less than two million taka
on the date of commencement of commercial operation;
√√
that thirty percent of the exempted income is invested in the said facility or in any new
physical infrastructure facility during the period of exemption or within one year from
the end of the period to which the exemption relates and in addition to that, another
ten percent of the exempted income is invested in each year before the expiry of three
months from the end of the income year in the purchase of shares of a company listed
with any stock exchange, notwithstanding the provisions of this Ordinance, be subject
to tax in the assessment year for which the exemption was allowed.
√√
Provided that the quantum of investment referred to in this clause shall be reduced
by the amount of dividend, if any, declared by the company enjoying tax exemption
under this section.
√√
that the said facility is approved, and during the relevant income year, stands approved
by the Board for the purposes of this section;
√√
that application in the prescribed from for approval for the purposes of this section,
as verified in the prescribed manner, is made to the Board within six months from the
end of the month of commencement of commercial operation;
√√
that the said facility maintains books of accounts on a regular basis and submits
return of its income as per provisions of section 75 of this Ordinance.
mono-rail;
rapid transit;
yy Hi-tech park;
Bangladesh Tax Handbook 2013-2014
55
Income Tax
Income Tax
36.
Exemption of income of cooperative societies (Section-47)
Any income derived from sale of goods, lending of money or lease of land and buildings which
is for personal use of the members of the co-operative societies will be exempted:
¾¾
¾¾
The entire income of the societies if it is carried on the following businesses:
√√
Agricultural or rural credit
√√
Cottage industry
√√
Marketing of agricultural produce of its members
XIII.
√√
Purchase of agricultural implements, seeds, livestock, etc. for supplying those
to the members for agriculture purpose
XIV.
√√
The processing which help agricultural produce turned into marketable goods
without any power generated manufacturing operation
XV.
Exception
√√
37.
XVI.
Co-operative society does not get any exemption, if it is engaged in any
insurance business carried on by a mutual insurance according to paragraph
8 of the Fourth Schedule.
Investment Allowance for Tax Rebate [Section 44 (2) & (3) and Part B of Sixth Schedule]
a.
Sl. #
VIII.
IX.
X.
XI.
XII.
Maximum ceiling of Investment Allowance: Maximum ceiling for Investment Allowance
is taka 15,000,000, subject to maximum of 30% of the total income excluding
employer’s contribution to recognized PF & Interest thereon and actual amount of
investment, whichever is lower.
b.
Tax Rebate: Tax Rebate @ 15% of the eligible investment shall be allowed as Rebate.
c.
Investments eligible for Tax Rebate:
Sl. #
I.
II.
III.
IV.
V.
VI.
VII.
Particulars
Donation to Zakat Fund [Para # 13]
Contribution to Benevolent Fund and Group Insurance Scheme [Para # 17]
Donation of Aga Khan Development Network [Para # 21]
Donation to philanthropic or educational institution [Para # 22]
Any sum invested in the purchase of one computer or one laptop by an
individual assessee subject to maximum Taka 100,000 for laptop and Taka
50,000 for desktop. [Para # 23]
Any sum paid by an assessee as donation to a national level institution
set up in memory of the liberation war [Para # 24]
Any sum paid by an assessee as donation to a national level institution
set up in memory of Father of the Nation [Para # 25]
Any sum invested by an assessee, being an individual, in the acquisition
of any stocks or shares of a company, mutual fund or debenture listed
with any stock exchange [Para # 27]
Any sum invested by an assessee, being an individual, in the purchase of
Bangladesh Government Treasury Bond [Para # 28]
38.
Rates of Corporate Tax
Irrespective of profit or loss all companies and every firm having gross receipts of more than
Tk. 50,00,000 have to pay tax @ 0.50% on gross receipts as minimum Tax. Tax rates applicable
for companies are as follows:
SL.
No.
i
Assessee
Publicly traded Companies (other than Banks,
Insurance & Financial Institutions):
New Rate
AY 2013-14
27.50%
Previous Rate
AY 2012-13
27.50%
Minimum Dividend is 10%
Particulars
Life insurance premium paid by an individual [Para # 1]
Life insurance premium paid by Hindu Undivided Family [Para # 2]
Contribution to Provident Fund and Other Funds [Para # 3, 4, 5 & 6]
Investment in Unit Certificate etc [Para # 10]
Contribution in any Deposit Pension Scheme (DPS) not exceeding Taka
60,000 [Para # 11]
Donation to a charitable Hospital [Para # 11A]
Donation to organization for the welfare of the retarded people [Para
# 11B]
Publicly traded companies and declare dividend 24.75%
more than 20%
-
Additional Tax, if declared dividend or bonus
share rate is less than 15% [section: 16B]
5% on
5% on
undistributed undistributed
porfit
porfit
Companies declaring dividend less than 10% or
dividend not paid within the time
37.50%
37.50%
Continued
56
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
57
Income Tax
SL.
No.
ii
Income Tax
New Rate
AY 2013-14
Assessee
Previous Rate
AY 2012-13
SL.
No.
xiii.
Banks, Insurance and Financial Institutions:
42.5%
42.5%
Excess Profit Tax (banks only): Profit in excess
50% of Capital+ Reserve
15% on excess profit
15% on excess
profit
Merchant bank
37.50%
42.50%
iii
Companies not publicly traded
37.50%
37.50%
iv
Mobile Operator Company:
Assessee
Previous Rate
AY 2012-13
Payment of Dividend: Payment of Dividend by
companies formed under Company Act. 1994 or
by foreign companies (FED/702/2006/5743 and
Finance Ordinance 2008) to:
Non Resident Assessee: Other than non-resident Bangladeshi:
Company shareholders of tax treaty country
with more than 10% total shareholdings
10%
10%
Company shareholders of tax treaty country
holding less than 10% of total shares of the
company
20%
20%
40%
If the company is converted into publicly
traded company through at least 10% share for
Initial Public Offering (IPO) Subject to not more
than 5% of pre IPO placement;
35%
If not converted into a publicly traded
company with 10% share for IPO
45%
45%
Company shareholders of non tax treaty
countries
20%
20%
Private University: Income accrued from private
universities approved by University Grant
Commission and other universities which are
not public universities shall pay tax
15%
15%
Remittance of Profit to/by a Foreign Company
20%
20%
Person or Individual
25%
25%
vi
Company engaged in Diamond cutting and
Polishing industry
15%
15%
Resident Assessee: Including non-resident
Bangladeshi:
Company Shareholders
20%
20%
vii
Readymade Export oriented Garments Industries
10%
10%
Individual
10%
10%
viii
Companies which manufacture of yarn related 15%
production of fabrics, dying, finishing and
covering of yarn
15%
15%
15%
ix.
Textile Industries
15%
15%
x.
Jute Industries
15%
15%
Tax in respect of Capital Gain:
In Case of Company: [Sectioned Schedule, Para
# 2(a)]
Capital gain will be taxed as a block of income
separate from other income of the assessee
company at flat rate
xi.
Cigarette Manufacturing Company:
In Case of a person other than Company: [Sectioned Schedule, Para # 2(b)]
At applicable rate on
total income
including
capital gain
At applicable rate on
total income
including
capital gain
v
xii.
xiv.
Publicly traded company
40%
35%
Non publicly traded company
45%
42.5%
Tax on Income Accrued from Research Institute 15%
under Trust Act
15%
Where the capital gain arises as result of a
disposal after not more than 5 years from the
date of acquisition
Continued
58
New Rate
AY 2013-14
Bangladesh Tax Handbook 2013-2014
Continued
Bangladesh Tax Handbook 2013-2014
59
Income Tax
SL.
No.
xv.
xvi.
xvii.
39.
Assessee
Income Tax
New Rate
AY 2013-14
Previous Rate
AY 2012-13
Where the capital gain arises as result of a dis- At the rate
posal after 5 years from the date of acquisition applicable on
total income
including said
income
OR
@ 15% on the
capital gain
whichever is
lower
At the rate
applicable on
total income
including said
income
OR
@ 15% on the
capital gain
whichever is
lower
Income accrued outside Bangladesh to any
of her citizen, if such income is brought into
Bangladesh
Nil (SRO-
Nil (SRO-
Ain/IT/2004,
Ain/IT/2004,
dated
13.09.04)
dated
13.09.04)
Nil
Income from business of software and IT
Enabled Services (ITES) including IT Support &
Software maintenance services, data entry, data
processing, call centre, BPO Services, etc.
Nil
Capital gain arising out of transfer of govt.
Securities [Section 32(7)]
Nil
Nil
Normal Depreciation Allowance and Amortization (Third Schedule, Para # 3): [section:
29(1) (viii) & (ix)]
SL
No.
Class of Assets
Rate of WDV
except as
otherwise
indicated
a) Building
10%
b) Factory building
20%
ii
Furniture & fittings
10%
iii
Machinery & plant
i
a) General rate
Remarks
SL
No.
Class of Assets
1) Ocean-going ships (new)
20%
Ships
* Less than 10 years
12%
* 10 years or more
24%
3) Inland ships including steamers,
motor vessels, iron or steel flats for
cargo, wooden cargo boats, motor
launches and speed boats
24%
ü 1) Batteries, X-Ray and electronic
therapeutic
apparatus
and
accessories thereto
20%
2) Machinery used in the production
and exhibition of cinematographic
films
20%
3) Motor vehicles, not plying for hire
20%
4) Motor vehicles, plying for hire
24%
5) Computer & computer equipments
30%
6) Bangladeshi
software
50%
computer
1) Professional & reference books
30%
2) Aircraft, aero-engine and aerial
photographic apparatus
30%
3) Moulds used in the manufacture of
glass or plastic goods or concrete pipe
30%
30%
1) Below ground installation
30%
2) Above ground installations, that is
to say, portable boilers, drilling tools,
well-head tanks and rigs
30%
Continued
Bangladesh Tax Handbook 2013-2014
The allowance is
to be calculated
on the original
cost
2) Ocean-going ships (Second hand)
age at the time of purschase
made
Remarks
12%
√√ Mineral of concerns
b) Special rates-
60
Rate of WDV
except as
otherwise
indicated
Continued
Bangladesh Tax Handbook 2013-2014
61
Income Tax
SL
No.
Class of Assets
Income Tax
Rate of WDV
except as
otherwise
indicated
Physical infrastructure undertaking
Remarks
1) Bridge
2%
2) Road
2%
3) Fly over
2%
In case of motor vehicles, being passenger vehicles or sedan cars, not plying for hire cost for
the purpose of depreciation is restricted to Taka 2,000,000.
40.
Amortization of License fees [Section 29 (1) (VIIIa)/Third schedule Para 10A]
Addition of new paragraph 10A after paragraph 10:
10A. (1) Amortization of license fees.- (1) Where an assessee, - being a resident company, paid
any sum as license fees on or after the first day of July, 2012 wholly and exclusively
for the purpose of obtaining a permission from any authority = authorised by the
government applicable for two or more years to run a business, the assessee shall be
allowed a deduction of an amount proportionate to such years and such deduction
shall continue till the last year of the period for which the license was granted.
- For the next following second year
30% of the actual cost of plant and
machinery to the assessee
- For the next following third year
20% of the actual cost of plant and
machinery to the assessee
The assets enjoying accelerated depreciation will not be eligible for any other depreciation
under the Income Tax Ordinance.
The undertaking must fulfill all the prescribed conditions and apply to Board in the prescribed
manner for approval for the purpose of deprecation of this category within six months from
the end of the month of commencement of commercial production. Board is to give decision
on the application within 45 days [Section 46A (3) or 46B (6)].
Accelerated depreciation is also allowable on machinery and plant other than office
appliances and road transport vehicles which having not being previously used in Bangladesh,
has been or is used in the expansion unit of any existing undertaking or in the treatment and
disposal of toxic and environmentally hazardous wastes or in the collection or processing of
biodegradable waste or in the research and development in any industrial undertaking owned
by a company. In this case accelerated depreciation is allowed at 80% for 1st year (starts
commercial production or operation) and 20% for the next following year [Para # 7A (1)].
43. Withholding Tax / Tax Deducted at Source (TDS) [Section # 50, 51, 52, 53, 54, 55 & 56]
All taxes deducted or collected in accordance with the section 48 to 74, shall be paid to the
credit of govt. by e-payment, challan or pay order within 3 weeks from the date of such
deduction or collection and all taxes deducted or collected shall be deposited to Bangladesh
Bank or Sonali Bank, except deduction from –
For the purpose of this paragraph, license fees means Spectrum Assignment fees paid
by a cellular mobile phone operator.”
41.
Initial depreciation: [Third Schedule, Para # 5A]
Where any building has been newly constructed or any machinery or plant has been in Bangladesh
after 30th June 2002, an amount by way of initial depreciation allowance in respect of the year
of construction or installation or the year in which such building, machinery or plant is used by
the assessee for the first time for the purpose of his business or profession or the year in which
commercial production is commenced, whichever is later, shall be allowed at the following rates:
In the case of building - 10% of the cost;
In the case of machinery or plant other than ships or motor vehicles not plying for hire 25% of
the cost;
42.
Accelerated Depreciation [Third Schedule, Para # 7 & 7A]
In the case of any machinery or plant (other than office appliance and road transport vehicles)
which not having been previously used in Bangladesh, has been or is used in an industrial
undertaking set up in Bangladesh between the first day of July, 1977 and the thirtieth day
of June 2012 (both days inclusive) accelerated depreciation allowance shall be allowed and
computed as follows:
62
50% of the actual cost of plant and
machinery to the assessee
30%
(2) - For the first year in which the undertaking
starts commercial production
Bangladesh Tax Handbook 2013-2014
√√
Supply of goods or execution of contracts (u/s-52)
√√
Professional or technical service fee (u/s-52A)
√√
House property (u/s-53A)
√√
Commission or fees (u/s-53E)
For the above four cases, cheque equivalent to deducted amount needs to be issued in
favor of concerned DCT and send to the person [u/s-2(46)] from whom tax has
been deducted subject to production of counter foil of treasury challan. Provided that if the
person is not resident in Bangladesh, exception will not be applicable.
Bangladesh Tax Handbook 2013-2014
63
Income Tax
44.
Income Tax
Rates of tax at source:
SL.
No.
1
2
3
4
Section/
Rate of
Particulars
Rule #
deduction (%)
50
Salaries and benefits:
Average rate
On first Taka 220,000 (Male Assessee);
Nil
On first Taka 250,000 (Female Assessee);
Nil
On first Taka 250,000 (Assessee aged 65 & more);
Nil
On first Taka 300,000 (Physically challenged Assessee);
Nil
On next Taka 300,000;
10
On next Taka 400,000;
15
On next Taka 300,000;
20
25
On the rest of the balance
50 A
Discount of the real value of Bangladesh Bank bills
Individual
27.5 or 37.5 or
Company
42.5 or 45
whichever is
applicable
51
Interest on securities excluding treasury bond or
10
treasury bill issued by the government
52 (1) &
Rule 16
In case of Supply of goods or execution of Contracts,
subcontracts, local L/C, payment of Indenting or
Shipping Agency Commission locally:
SL.
No.
5
Section/
Particulars
Rule #
52 (1) &
Indenting commission received through remittance
Rule 17
Shipping agency commission received through
remittance
5
6
52 A (1)
Fees for services rendered by Doctors, Accountants,
Engineers & Consultants
10
7
52A(2)
Royalty or Technical Know How Fee
10
8
52 A (3)
Fees for Professional or Technical Services
- if furnishes TIN
10
Fees for Professional or Technical Services
- if fails to furnish TIN
15
Payments of Commission to Stevedoring Agency and
any Other Services not covered under sections # 52
10
Payment for Private Security Services
1.5
9
52AA
10
52AAA
Commission to Clearing & Forwarding agents
10
11
52 B
Collection of tax from Cigarette Manufacturers
10
12
52 C
Compensation against Acquisition of Property:
Where the cumulative payment does not exceed Taka
200,000
Where the cumulative payment exceeds Taka 200,000
but does not exceed Taka 500,000
Nil
1
Immovable property situates within city corporation,
paurashava or Cantonment board area
Where the cumulative payment exceeds Taka 500,000
but does not exceed Taka 1,500,000
2.5
Immovable property situates outside of city
corporation,paurashava or Cantonment board area
1
Where the cumulative payment exceeds Taka 1,500,000
but does not exceed Taka 2,500,000
3.5
5
Where the cumulative payment exceeds Taka
2,500,000 but does not exceed Taka 30,000,000
4
Where the cumulative payment exceeds Taka 30,000,000
5
13
52 D
Interest on saving instruments [Interest on
sanchayapathra purchased after 01 July 2011]
14
52 F
Collection from brick manufacturers (at the time of
permission for manufacture of bricks):
- for one section brick field
In the case of supplied by oil marketing company
Where the payment does not exceed Taka 200,000
Where the payment exceeds Taka 200,000
Nil
0.60
15
52 I
Bangladesh Tax Handbook 2013-2014
2
Tk. 30,000
- for two section brick field
Tk. 45,000
- for three section brick field
Tk. 60,000
Commission of Letters of credit
Continued
64
Rate of
deduction (%)
7.5
5
Continued
Bangladesh Tax Handbook 2013-2014
65
Income Tax
SL.
No.
16
Income Tax
Section/
Rate of
Particulars
Rule #
deduction (%)
52 K
Renewal of trade license by City Corporation or Paurashava:
Tk 500
√√ For Dhaka City Corporation or Chittagong City
Corporation
17
52 M
18
19
52 N
52 O
√√ In any City Corporation, other than Dhaka City
Corporation and Chittagong City Corporation
Tk . 300
√√ In any paurashava at any district headquarter
Tk. 300
√√ In any other paurashava
Collection from freight forward agency commission
Tk. 100
15
Rental power company
Collection of tax for making payments or giving credit to a
foreign technician serving in a diamond cutting Industry
4
5
20
52 P
Services from convention hall, conference centre, etc.
5
21
52 Q
Credit or Payment to the account of any resident
out of remittances received from abroad by way of
Service Charge / Consultancy Fee/ Commission /
Remuneration or other Fees
Deduction of tax from receipts in respect of
international phone call
On total amount of international phone call received
through International Gateway (IGW)
10
22
52R
On the amount of international phone call paid or
credited by International Gateway(IGW) services
operator to the account of Interconnection
Exchange (ICX ), Access Network Services (ANS) or
any other person under any agreement with BTRC
SL.
No.
27
28
Section/
Rate of
Particulars
Rule #
deduction (%)
53 B &
Export of manpower (service charges)
10
Rule 17C
53 BB
Collection of tax from export of knitwear and woven
0.80
garments
29
53 BBB
Collection of tax from Member of stock exchanges
(bond has been omitted from members portfolio)
0.05
30
53 BBBB
Collection of tax from export of any goods except
knitwear and woven garments
0.80
31
53 C &
Rule 17D
Collection of tax on sale price of goods or property
sold by public auction
5
32
53 CC
Deduction or collection of tax at source from courier
business of a non resident
15
33
53 D
10
34
35
53 DDD
53 E(1)
Payment to actors, actress, producers etc. Exceeding
Tk. 10,000
Deduction from export cash subsidy
Commission, discount or fees on account of
marketing or distribution of goods
Company (other than oil marketing company) shall
collect tax on the difference between the sale price
to the distributor or other persons and the retail price
fixed by the company
53 E(2)
1
5
23
52 S
Collection of tax from manufacturer of soft drink
3
24
53 & Rule
17A
Collection of tax from importers. The board shall
specify from whom collection to be made
5
25
53A
Payment of rent to landlord
5
26
53 AA
Collection of tax from shipping business of a resident:
Freight received or receivable in or out of Bangladesh
Freight received or receivable from service rendered
between two or more countries
5
3
36
53 EE
37
53 F
Bangladesh Tax Handbook 2013-2014
5
Commission or remuneration paid to agent or
representative of a foreign buyer as per terms of L/C
or under any other instructions
Interest on Savings and Fixed Deposits or any term
deposit maintained with schedule bank including a
corporation, bank or by way of profit on term deposits,
financial institutions, Leasing Company or housing
company
√√ For TIN holder
7.5
√√ For assessee Without TIN having deposit above
15
Taka 1,00,000
√√ For assessee Without TIN having deposit less
10
10
than Taka 1,00,000
Continued
66
5
10
Continued
Bangladesh Tax Handbook 2013-2014
67
Income Tax
SL.
No.
38
Income Tax
Section/
Rate of
Particulars
Rule #
deduction (%)
53 FF
Collection of tax from persons engaged in real
estate or land development business:
In case of building or apartment Building for residential purpose:
Tk. 1,600 per
 Situated at Gulshan, Banani, Baridhara, Motisquare meter
jheel and Dilkusha of Dhaka
 Situated at DOHS, Dhanmondi, Mohakhali,
Lalmatia, Uttara, Bashundhara, Cantonment,
Kawran Bazar of Dhaka and Khulshi, Panchlaish, Nasirabad & Agrabad of Chittagong
Tk. 1,500 per
square meter
Tk. 600 per
square meter
 Other areas in Bangladesh
Building not for residential purpose:
 Situated at Gulshan, Banani, Baridhara, Motijheel and Dilkusha of Dhaka
 Situated at DOHS, Dhanmondi, Mohakhali, Lalmatia, Uttara, Bashundhara, Cantonment, Kawran Bazar, of Dhaka and Khulshi, Panchlaish,
Nasirabad & Agrabad of Chittagong
SL.
No.
41
Tk. 6,500 per
square meter
42
43
44
45
Tk. 5,000 per
square meter
Section/
Rate of
Particulars
Rule #
deduction (%)
53 H
Collection of tax on transfer, etc. of property:
-- On deed value within the jurisdiction of RAJUK and CDA
3
-- On deed value within the jurisdiction of Dhaka and
Chittagong districts excluding RAJUK, CDA, Gazipur,
2
Narayanganj, Munshiganj, Manikganj and Narsingdi
districts, City corporation excluding Dhaka South
City Corporation, Dhaka North City Corporation
and Chittagong City Corporation, paurashava,
cantonment board
-- On deed value for any areas other than areas
1
mentioned above.
53 I
Interest on deposit of Post Office Savings Bank
10
Account, deductible only when total interest exceeds
Tk. 150,000 and TDS applicable only on the interest in
excess of Tk. 150,000
53 J
Payment of rental value of vacant land or plant
5
53 K
Advertising bill of newspaper or magazine or private
3
television channel and private radio station
54
Deduction from Dividends:
-- Company beneficiary for non-tax treaty countries
20
-- Company beneficiary for tax treaty countries
10
-- Company beneficiary for tax treaty countries having
20
less than 10% shareholding
-- Resident Company
shareholding
Tk. 1,600 per
square meter
 Other areas in Bangladesh.
In case of land:
 On deed value for Dhaka, Gazipur, Narayanganj,
Munshiganj, Manikganj, Narsingdi and Chittagong districts
 On deed value for any other district
5
46
47
3
39
53 G
Payment of insurance commission
5
40
53 GG
Payment of fees / remuneration to surveyor of
General Insurance Company
15
55 & Rule
17
56
with
more
than 10%
20
-- Individual: Resident & Non-resident Bangladeshi
10
-- Individual: Non –resident Foreigner
25
20
Income from lottery etc.
Deduction from income of non-residents:
Company
Rate applicable
to company, i.e.,
37.5%
Person other than company & non-resident Bangladeshi
25
Non resident Bangladeshi
Rate applicable
for resident
individual
Continued
68
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
69
Income Tax
45.
Income Tax
Form of Return of WithholdingTax under Income Tax Ordinance, 1984 (Ord. XXXVI OF 1984)
8.
Particulars of tax deducted or collected:
(Return under section 75A)
FOR COMPANY TAXPAYERS ONLY
1.
SL.
Name of the Company:
-
-
(1)
1.
2.TIN/UTIN:
3.
TCAN -
4.
(a) Circle:………………….
5.
Deduction/Collection Period:
6. 2.
-
(b) Taxes Zone:
1st quarter (July-September),......................................................... Year ...
.. ;
2nd quarter (October-December),.................................................. Year ...
.. ;
3rd quarter (January-March),.......................................................... Year ...
.. ;
4th quarter (April-June),.................................................. ............... Year ...
.. ;
(a)
3.
Address:
(b)Phone:
(c)
4.
Fax No.:
(d)E-mail:
(e) 7.
Web address: http://www...
Contact person:
(a)Name:
(b)Designation:
(c)
Telephone: ...
5.
.
6.
(d)Mobile:
(e)
Type of
payment
Section
of I.T.O,
1984
(2)
(3)
50
a. Payment to
contractors/
supplier
b. Indenting
commission
c. Shipping
agency
commission
a. Service of
doctor
b. Royalty or
technical
know-how fee
c. Fees for
professional
& technical
services
a. Payment
for private
security
service
b. Payment to
Stevedoring
agencies
c. Any other
service
L/C commission
52
Salary
Freight forward
agency
commission
Payment
during
the
quarter
Rate of
deduction/
collection
Amount of
Tax
deduction /
collection
(4)
(5)
(6)
52
52
52A(1)
52A(2)
52A(3)
52AA
52AA
52AA
52I
52M
E-mail: ...
Continued
70
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
71
Income Tax
SL.
(1)
7.
8.
9.
9A
10.
11.
12.
13.
14.
15.
Income Tax
Type of
payment
(2)
Payment to
foreign technician
serving in
diamond cutting
industry
Payment for
services 2P from
convention hall etc.
Payment to
resident person
against services
provided person
Deduction of tax
from the service
of international
gateway service
in respect of
phone call
Collection
of tax from
manufacturer of
soft drink
House/office rent 53A
Collection of tax from
shipping business of a
resident
Receipt from
export of
manpower
Collection of tax
from export of
knit-wear and
woven garments.
Collection of tax
from member
of stock exchanges
Section
of I.T.O,
1984
(3)
52O
Payment
during
the
quarter
Rate of
deduction/
collection
Amount of
Tax
deduction /
collection
(4)
(5)
(6)
52P
52Q.
52R
52S
SL.
Type of
payment
(1)
16.
(2)
(3)
Collection of tax
53BBBB
from export of
any good except
certain items.
17. Receipt from
53C
public auction
18. Courier business
53
of a non-resident.
19. Payment to actor/
53D
actress.
19A Deduction of tax 53DDD
at source from
export cash
subsidy
20. Payment as
53E(1)
commission or
discount for
distribution of
goods.
20A. Company, other
than oil marketing
company, shall
collect tax on
the difference
between the sale
price to the distributor or other
persons and the
retail price fixed
by such company.
53A
53AA
53B
53BB
21.
53
Payment to
foreign buyer’s
agent.
Continued
72
Bangladesh Tax Handbook 2013-2014
Section
of I.T.O,
1984
Payment
during
the
quarter
Rate of
deduction/
collection
Amount of
Tax
deduction /
collection
(4)
(5)
(6)
53E(2)
53EE
Continued
Bangladesh Tax Handbook 2013-2014
73
Income Tax
SL.
(1)
22.
23.
24.
25.
26.
27.
Income Tax
Type of
payment
(2)
Interest on
savings and fixed
deposit.
Insurance
commission.
Payment to
surveyor of
general insurance.
Rental value of
vacant land, plant
or machinery.
Advertising bill
of newspaper or
magazine.
Section
of I.T.O,
1984
(3)
53F
Payment
during
the
quarter
(4)
Rate of
deduction/
collection
Amount of
Tax
deduction /
collection
(5)
(6)
53G
53GG
53J
53K
53M
28.
Transfer of
securities
by sponsor
shareholders.
Dividends.
29.
Lottery.
55
30.
Payment to nonresident.
56
54
Verification
9.
I, ....................................................................… designation.……….......................…... s o l e m n l y
declare that to the best of my knowledge and belief the information given in this
return is correct and complete.
Place:
Date:
Signature and seal
NB: 1. The return shall be accompanied by a statement of deduction or collection of
tax along with copy of treasury challans or payment orders.
74
Bangladesh Tax Handbook 2013-2014
10. Tax shall be deposited to respective account code according to the following table:
Name of the Zone
Income taxPerson
Income taxCompany
Other Fees
Taxes Zone-1, Dhaka
1-1141-0001-0111
1-1141-0001-0101
1-1141-0001-1876
Taxes Zone-2, Dhaka
1-1141-0005-0111 1-1141-0005-0101
1-1141-0005-1876
Taxes Zone-3, Dhaka
1-1141-0010-0111
1-1141-0010-1876
1-1141-0010-0101
Taxes Zone-4, Dhaka
1-1141-0015-0111
1-1141-0015-0101
1-1141-0015-1876
Taxes Zone-5, Dhaka
1-1141-0020-0111
1-1141-0020-0101
1-1141-0020-1876
Taxes Zone-6, Dhaka
1-1141-0025-0111
1-1141-0025-0101
1-1141-0025-1876
Taxes Zone-7, Dhaka
1-1141-0030-0111
1-1141-0030-0101
1-1141-0030-1876
Taxes Zone-8, Dhaka
1-11410035-0111
1-1141-0035-0101
1-1141-0035-1876
Taxes Zone-9, Dhaka
1-1141-0080-0111 1-1141-0080-0101
1-1141-0080-1876
Taxes Zone-10, Dhaka
1-1141-0085-0111
1-1141-0085-0101
1-1141-0085-1876
Taxes Zone-11, Dhaka
1-1141-0090-0111 1-1141-0090-0101
1-1141-0090-1876
Taxes Zone-12, Dhaka
1-1141-0095-0111
1-1141-0095-0101
1-1141-0095-1876
Taxes Zone-13, Dhaka
1-1141-0100-0111
1-1141-0100-0101
1-1141-0100-1876
Taxes Zone-14, Dhaka
1-1141-0105-0111
1-1141-0105-0101
1-1141-0105-1876
Taxes Zone-15, Dhaka
1-1141-0110-0111
1-1141-0110-0101
1-1141-0110-1876
Taxes Zone, Narayangonj
1-1141-0115-0111
1-1141-0115-0101
1-1141-0115-1876
Taxes Zone, Gazipur
1-1141-0120-0111
1-1141-0120-0101
1-1141-0120-1876
Taxes Zone, Mymenshing
1-1141-0125-0111
1-1141-0125-0101
1-1141-0125-1876
Taxes Zone, Comilla
1-1141-0130-0111
1-1141-0130-0101
1-1141-0130-1876
Taxes Zone, Chittagong
1-1141-0135-0111
1-1141-0135-0101
1-1141-0135-1876
Taxes Zone, Bogra
1-1141-0140-0111
1-1141-0140-0101
1-1141-0140-1876
Large Taxpayer Unit (LTU
1-1145-0010-0111 1-1145-0010-0101
1-1145-0010-1876
Central Survey Zone
1-1145-0005-0111 1-1145-0005-0101
1-1145-0005-1876
Taxes Zone-1, Chittagong 1-1141-0040-0111 1-1141-0040-0101
1-1141-0040-1876
Taxes Zone-2, Chittagong
1-1141-0045-0111
1-1141-0045-0101
1-1141-0045-1876
Taxes Zone-3, Chittagong
1-1141-0050-0111 1-1141-0050-0101
1-1141-0050-1876
Taxes Zone- Khulna
1-1141-0055-0111
1-1141-0055-0101
1-1141-0055-1876
Taxes Zone- Rajshahi
1-1141-0060-0111 1-1141-0060-0101
1-1141-0060-1876
Taxes Zone- Rongpur
1-1141-0065-0111
1-1141-0065-0101
1-1141-0065-1876
Taxes Zone-Sylhet
1-1141-0070-0111
1-1141-0070-0101
1-1141-0070-1876
Taxes Zone- Barisal
1-1141-0075-0111
1-1141-0075-0101
1-1141-0075-1876
Bangladesh Tax Handbook 2013-2014
75
Income Tax
Income Tax
income not exceeding Taka 300,000 (Taka Three Lac) from business or profession may opt not
to submit his/her lifestyle statement. This will be effective from Assessment Year: 2013-2014.
Name of the Zone
Income tax- Person & Company
Appeallate Zone-1
1-1143-0001-1876
Appeallate Zone-2
1-1143-0005-1876
50.
Filing of Return of Income and Statement [Section 75, 76, 77 & 78]
Appeallate Zone-3
1-1143-0010-1876
Appeallate Zone-4
1-1143-0035-1876
Appeallate Zone- Rajshahi
1-1143-0040-1876
Tribunal Fee
1-1143-0015-1876
Every person whose total income during an income year exceeds the exemption limit i.e. the
maximum amount which is not chargeable to tax and every person whatever his income in the
income year who was assessed to tax for any year within three years preceding that year, shall
furnish a return setting forth therein (along with such other particulars as may be prescribed)
his total income and total income during the income year.
I.R.C
1-1731-0001-1801
VAT Deposit
1-1133-0000-0311
Every company shall file a return of its income or the income of any other person for whom the
company is assessable, on or before the date specified.
Affix Stamp
1-1101-0020-1301
Where a person is not required to file a return under sub-section 1 of section 75, he is to file a
return if he:
46.
Advance Payment of Tax [Section 64]

The ceiling of the amount of income for payment advance tax is Taka 400,000; [Section 64]
The new assesses have been exempted from the payment of advance tax unless their income
exceeds Taka 400,000; [Section 68]
Advance tax is payable by an assessee during each financial year if the latest assessed income
(assessment completed either on regular or provisional basis before the fifteenth May of
the year) exceeds Taka 400,000. Advance tax is payable in four equal installments on 15th
September, 15th December, 15th March and 15th June. If one estimates that one’s income during
any financial year will be less than the last assessed income, one may submit an estimate of
income of one’s own and that the tax paid on the basis of the estimate does not fall short of
75% of the tax payable on regular assessment. Because, if the tax paid falls short he is liable
for interest [Section 73].
a.
resides in a city corporation or paurashava, or divisional head quarters or district head
quarters and fulfils any of the following conditions:
i.
owns a more than one story building with an area of more than 1,600 sft;
ii.
owns a motor car;
iii.
subscribes a telephone;
iv.
is a member of club registered under VAT Act 1991;
b.
runs a business or profession with trade license from a city corporation or
paurashava, union parishad and operates a bank account;
c.
is registered with a recognized professional body as a doctor, dentist, ITP, CA,
CMA, engineer, architect, surveyor or any similar profession.
47.
Payment on the Basis of Return [Section 74(1)]
Every person who is required to file a return under Sections 75, 77, 78, 89 (2), 91 (3) & 93 (1)
shall, on or before the date on which he files the return, pay the amount of tax payable by
him on the basis of such return or tax liabilities, if applicable, as per provision of section
#16CCC as reduced by the amount of any tax deducted from this income or paid by him.
d.
member of a club or a trade association;
e.
is a candidate for an office of paurashava or a city corporation or a member of
a parliament;
48.
Mode of payment of Tax by assessee (Rule-26A)
f.
participant in a tender floated by government, semi-government, autonomous
body or local authority;
All payments of Tax U/S-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 shall be made by pay order or demand
draft or account payee cheque of scheduled bank in favor of concerned DCT.
g.
has a tax payers identification number in accordance with the provision of
section 184A;
Provided that payment does not exceed Taka 10,000 can be made through treasury challan.
h. any non government organization registered with NGO Affairs Buraeu.
49. Return of statement of lifestyle [Section # 75 (2) (d) (i)]
An individual note being a shareholder Director of a company, having income from Salary or
Every individual shall furnish, along with the return or the certificate, as the
case may be, a statement in the prescribed form and verified in the prescribed
manner giving particulars of the total assets and liabilities of himself,
76
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
77
Income Tax
Income Tax
his spouse and his minor children and dependants. He shall also furnish
particulars of his personal and family expenditure as per proforma determined
by the board to be called life-style as per rule 25A:
Provided that an individual, not being a shareholder director of a company, having
income from salary or income not exceeding three lakh taka from business or
profession may opt not to submit such statement;
In the case of a company the return will be accompanied by a statement of accounts
audited by a chartered accountancy firm.
51. Return of withholding tax [Section # 75A and Rule # 24A]
Every person, being a company, shall file or cause to be filed, with the deputy commissioner of
taxes where he is being assessed, a return of withholding tax collected or deducted at source.
The return shall be submitted on quarterly basis within 15th day of October, January, April and
July of each financial year. Following conditions are applicable for the return:
54.Assessments
i.
Assessment on Correct Return: [Section 82]
Where a return or a revised return has been filed under Chapter VIII and the Deputy
Commissioner of Taxes is satisfied, without requiring the presence of the assessee
or the production of any evidence, that the return is correct and complete, he shall
assess the total income and determine the tax payable by him on the basis of such
return and communicate the assessment order to the assessee within thirty days next
following: Provided that-

Such return shall be filed on or before the date as specified in clause (c) of sub section
(2) of section 75;

The amount of tax payable shall be paid on or before the date on which the return is
filed; and
ƒƒ
Return of withholding tax shall be in prescribed form specified in Rule # 24A;
ƒƒ
Return shall be submitted in Tax Circle in which company’s tax assessment is being
made;

Such return does not show any loss or lesser income than the last assessed income, or
assessment on the basis of such return does not result in refund;
ƒƒ
Return submission is mandatory for any amount of tax if deducted at source;
ii.
Universal Self Assessment [Section 82 BB]
ƒƒ
Time extension of 15 days may be allowed by DCT;
ƒƒ
Return shall be signed by chief official of the entity;
ƒƒ
ƒƒ
ƒƒ
ƒƒ
Summary of tax deducted at source and related treasury challans or payment orders
shall be affixed with the return;
Where an assessee furnish a correct and complete return of income, the DCT
shall receive such return himself or cause to be received by any other official
and issue a receipt of such return and, the receipt shall be deemed to be
an order of assessment for the assessment year for which the return is filed.
ƒƒ
Penalty shall be imposed under section # 124 if return is not submitted within
prescribed time period;
A return shall be taken to be complete, if it is filed in accordance with the
provisions of sub-section (2) or (3) of section 75.
ƒƒ
If any person fails to collect, deduct or credit the tax, the assessee shall be treated as
assessee in default.
The amount of tax payable shall be paid on or before the date on which the
return is filed in accordance with section 74.
ƒƒ
The Board or any authority authorized by the Board may select a number of
such returns filed may refer to the DCT for the purpose of audit to make the
assessment under section 83 or 84.
ƒƒ
No question as to the source of investment made by a new assessee deriving
income from business or profession shall be raised, if he shows income at least
not less than 25% of the capital invested in business or profession and pays
tax on such income before filling of income.
ƒƒ
The initial capital investment of business or profession or any fraction of such
initial capital shall not be transferred from that business or profession within
the income year when the investment was made or within five years when the
investment was made or within five years from the end of that income year.
52. Obligation to furnish Annual Information Return [Section # 75B]
Government may, by notification in the official gazette, require any person or group of persons
responsible for registering or maintaining books of account or other documents containing
a record of any specified financial transaction, under any law for the time being in force, to
furnish an Annual Information Return, in respect of such specified financial transaction.
53 Concurrent jurisdiction [Section # 75C]
Board may, by general or special order in writing, direct that in respect of all or any
proceedings relating to receiving of return of income and issuance of acknowledgement
thereof in accordance with the provisions of sections 75, 77, 78, 89(2), 91(3) or 93(1), the power
78
and functions of the DCT shall be concurrently exercised by such other authority as may be
specified by the board.
Bangladesh Tax Handbook 2013-2014
Bangladesh Tax Handbook 2013-2014
79
Income Tax
Income Tax
55. Some final settlement of tax liability [section # 82C]
Final discharge of tax liability shall not be applicable subject to following condition:
Tax deducted or collected at source in accordance with the provisions mentioned below shall
be deemed to be the final discharge of tax liability from that source. These are as follows:
Tax deduction or collection at source shall not be adjusted against refund due for earlier year or
years or refund due for the assessment year from any source other than mentioned in this section;
Section references Sources of tax deduction or collection
Section # 52
Payment on account of supply of goods or execution of contract or
local Letter of Credit (L/C)
Section # 52A(2)
Payment on account of royalty, fees for technical services
Section # 52AAA
Commission from clearing and forwarding agency business
Section # 52B
Value of banderols computed on account of manufacturer of cigarettes
Section # 52C
Compensation against acquisition of property
Section # 52N
Amount received by sale of rental power by rental power companies
Section # 52O
Salaries of foreign technician serving in a diamond cutting industry
Section # 52R
Amount received by International Gateway (IGW) services operator or
Interconnection Exchange (ICX) in respect of international phone call
Section # 53
Goods imported, not being goods imported by an industrial
undertaking as raw materials for its own consumption
Section # 53AA
Amount received or receivable from shipping business of a resident
Section # 53B
Amount received on account of export of manpower
Section # 53BB
Amount received on account of export of certain items
Section # 53BBB
Amount received on account of transaction by a member of stock
exchange
Section # 53C
The amount of auction purchase
Section # 53CC
Amount received on account of courier business of a non-resident
Income from the sources mentioned in this section shall be determined on the basis of the tax
deducted or collected at source and the rate or rates of tax applicable for the assessment year;
This income mentioned in earlier clause shall not be set off against loss;
Any income shown or assessed in excess of the amount mentioned in earlier clause shall be
liable to tax at the rate applicable for the assessment year;
Any income not admissible as allowances under section # 30 shall be added to this income;
56.
Assessment on the basis of Report of a Chartered Accountant [Section 83AAA]
Where a return or a revised return filed by a company is reasonable believed to be incorrect
or incomplete, the Board may appoint a registered Chartered Accountant to examine the
accounts of that assessee.
The Chartered Accountant shall exercise the powers and functions of the DCT and after
examining the accounts shall submit a report to the Board in writing. The Board shall forthwith
forward the report to the Deputy Commissioner of Taxes and the Deputy Commissioner of
Taxes after giving an opportunity to the assessee shall make the assessment on the basis of
the report of the chartered Accountant and on the basis of the other evidences within thirty
days after completion of hearing or consideration as the case may be and communicate the
order within thirty days from the date of such order.
57.
Assessment and computation of Income of Contractor of an Oil company (Rule 39)
Section # 52DDD
Section # 53FF
Amount received on account of Export cash subsidy
Amount received from persons engaged in real estate or land
development business
Section # 53G
The amount of remuneration or reward, whether by way of commission
or otherwise payable to an insurance agent
Section # 53GG
The amount representing the payment on account of survey by
surveyor of a general insurance company
Section # 53H
The amount of value of property
Section # 53L
The premium received from raising of share at a premium over face value
Section # 53M
Income received from transfer of securities or mutual fund units by
sponsor shareholders of a company
Section # 55 & 19(13) The amount on account of winnings
80
Provided that final discharge of tax liability shall not be applicable for a contractor of an oil
company or a sub-contractor to the contractor of an oil company [section # 52, 82C & rule # 39]
Bangladesh Tax Handbook 2013-2014
1.
Any person/company who resides out of Bangladesh and carries on business
in Bangladesh under an agreement as a contractor to an oil company or as a
subcontractor to the contractor to an oil company engaged in Petroleum Operations
in Bangladesh for exploration and development of oil & gas may exercise an option
or ascertainment of income, profits and gains from the operation of drilling of oil,
geophysical survey, marine seismic survey, shallow water seismic survey and other
activities relating to petroleum operations, under Rule 39.
In such case his income, profits and gains derived from such operations shall, subject
to the provision of this rule, be deemed to be an amount equivalent to 10% of the gross
earrings from such operations provided that:
a.
such option shall be exercised before the 30th day of September of the year of
assessment in which such person is assessable for the first time in Bangladesh.
b.
the option once exercised shall be treated as final and shall be applicable to
all assessments thereafter.
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81
Income Tax
2.
Income Tax
For the purposes of the Rule 39:
a.
The expression income, profits and gains shall mean the net income, profts and
gains determined after considering all expenses, allowances and depreciation
as allowed for the purposes of sections 28, 29 and 30 of the Ordinance;
b.
the expression gross earnings shall include the total value of all fees, moneys,
income, compensations or reimbursable costs as stipulated in the agreement
with the oil company, or in the agreement with the contractor to the oil
company (whether in cash or in kind and whether received or not) derived
from the operations referred to in sub-rule by the person but excluding the
amount of tax, if any, paid or payable on behalf of the said persons, as reduced
by the following amountsƒƒ
amount constituting compensations or reimbursements exclusively
for expenditures effected by the said person for the purchase
of equipment’s for the oil company, which are, in fact, not his
responsibility; and
ƒƒ
58.
amount constituting compensations or reimbursements exclusively for
expenditures effected by the said person for the purpose of transporting
or moving, drilling and other equipment’s into and out of Bangladesh
Assessments under other sections
a.
Spot Assessment u/s 82D and Rule 38B;
b.
Provisional Assessment u/s 81;
c.
Best Judgment Assessment u/s 84;
d.
Assessment in thend case of discontinued business u/s 89;
e.
Assessment in the case of Deceased Persons u/s 92;
f.
Assessment in the case of departure from Bangladesh u/s 91;
g.
Assessment in the case of Minors, Lunatics, Idiots, Beneficiaries of any Trust,
etc. u/s 95;
h.
Assessment of Co-operative Societies u/s 47;
Transfer Pricing
In section 107A, following definitions on Transfer Pricing have been mentioned:
82
(3) “Arm’s length price” means a 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 transactions between independent entities carried out
under comparable circumstances;
Bangladesh Tax Handbook 2013-2014
(a) a mutual agreement or arrangement between two or more associated
enterprises for the allocation or apportionment of, or any contribution to, any
cost or expense incurred or to be incurred in connection with a benefit, service
or facility provided or to be provided to anyone or more of such enterprises;
(b) a transaction entered into by an enterprise with a person other than an
associated enterprise, if there exists a prior agreement in relation to the
relevant transaction between such other person and the associated enterprise,
or the terms of the relevant transaction are determined in substance between
such other person and the associated enterprise;
“Uncontrolled transaction” means a transaction undertaken between enterprises not
being the associated enterprises.
60.
Determination of income from international transaction having regard to arm’s length price
[Section #107B]
The amount of any income, or expenditure, arising from an international transaction shall be
determined having regard to the arm’s length price.
61.
Reference to Transfer Pricing Officer [Section # l07D]
Deputy Commissioner of Taxes, with prior approval of the Board, may refer the determination
of the arm’s length price to the Transfer Pricing Officer, the Transfer Pricing Officer, with prior
approval of the Board, may proceed to determine the arm’s length price in relation to any
international transaction.
62.
Maintenance and keeping of information, documents and records [Section # l07E]
(1) Every person who has entered into an international transaction shall keep and
maintain such information, documents and records as may be prescribed.
(2) 59.
(1) (2) “International transaction” means a transaction between associated enterprises,
either or both of whom are non- residents, in the nature of purchase, sale or lease
of tangible or intangible property, or provision of services, or lending or borrowing
money, or any other transaction having a bearing on the profits, income, losses,
assets, financial position or economic value of such enterprises, and includes-
The Board may prescribe the period for which the information, documents and records
shall be kept and maintained.
(3) The Deputy Commissioner of Taxes may, by notice in writing, require any person to
furnish any information, documents and records within the notice period.
63.
Report from an accountant to be furnished [Section# 107F]
Every person who has entered into international transaction or transactions the aggregate
of value which, as recorded in the books of account, exceeds three crore Taka during an
Bangladesh Tax Handbook 2013-2014
83
Income Tax
Income Tax
income year shall furnish, on or before the specified date in the form and manner as may be
prescribed, a report from a Chartered Accountant.
64.
65.
66.
84
67.
Most appropriate method [Rule#72]
The most appropriate method for determining the arm’s length price of an international
transaction shall be the method that, under the facts and circumstances, provides the most
reliable measure of an arm’s length price in relation to the international transaction.
68.
Information and documents to be kept and maintained under section l07E [Rule#73]
Provision of penalty on transfer pricing [Section# 107G, 107H, and 107I]
References
Particulars
Section# 107G
Penalty for failure to keep, A penalty not exceeding one percent
maintain or furnish information, of the value of each international
documents or records to the transaction
Deputy Commissioner of Taxes
Penalty
ƒƒ
ownership profile of the multinational group in which the assessee enterprise is a
member
ƒƒ
business profile of the group
Section # 107H Penalty for failure to comply with A penalty not exceeding one percent
the notice or requisition
of the value of each international
transaction
ƒƒ
Brief business profiles of each of the member of the group
ƒƒ
information on the business relationship
Section#107I
ƒƒ
consolidated financial statement of the group
ƒƒ
profile of the assessee enterprise and each of the associated enterprises operating in
Bangladesh, including tax and VAT registration number, IRC & ERC numbers, address
and locations of activity centers etc
Penalty for failure to furnish report A penalty of a sum not exceeding
from a Chartered Accountant
three lac Taka
Determination of arm’s length price under section 107C [Rule#70]
(a)
Comparable uncontrolled price method: The price charged or paid for property
transferred or services provided in an uncontrolled transaction + the differential amount
from the price of the international transaction+ adjustment = arm’s length price
ƒƒ
(b)
Resale price method: The resold price to an independent enterprise - comparable
normal gross margin+ adjustment =the adjusted price =arm’s length price
business profile of the assessee enterprise and each of the associated enterprise
operating in Bangladesh including the line of business, industry dynamics, and market
and economic environment
ƒƒ
(c)
Cost plus method: Direct and indirect costs + comparable profit mark-up + adjustment
=arm’s length price
brief description of the functions performed, risks assumed and assets employed
or to be employed by the assessee and by the associated enterprise involved in the
international transaction
(d)
Profit split method: the combined profit arising from international transaction or
transactions and divisible among the associated enterprises based on the relative
contribution of each associated enterprise to that profit = arm’s length price.
ƒƒ
financial statements of the assessee
ƒƒ
information on economic and market analyses, forecasts, budgets or any other
financial estimates.
Factors to be considered in judging comparability [Rule # 71]
ƒƒ
details of all transactions with the associated enterprises
ƒƒ
The characteristics, nature, extent, forms of property, services or intangible properties
involved in the transaction
ƒƒ
contracts, terms and agreements of the transactions with associated enterprise; etc.
ƒƒ
The functions performed, the risks assumed and the assets employed
ƒƒ
The contractual terms
ƒƒ
Economic circumstances including geographic location, the size and level of markets;
the extent of competition in the market, the availability of substitute goods and
services, the purchasing powers of consumers, government orders and policies and
the timing of the transaction
ƒƒ
Any other factors that have material effect on the international transaction and
uncontrolled transaction.
Bangladesh Tax Handbook 2013-2014
69. Additional powers of enquiry and production of documents [section # 116 (1)]
Directors-General of Inspection (DGI), the Commissioner, the Director General (DG), Central
Intelligence Cell (CIC) and the Inspecting Joint Commissioner of Taxes (IJCT) can make an
enquiry on any assessee or above assessee or related any person and ask for documents
including electronic copy along with authority to ask them to appear before authority for
providing information.
70. Power of giving order for not removing property [section # 116 A]
In the course of performing functions under this Ordinance, the Director General, Central
Bangladesh Tax Handbook 2013-2014
85
Income Tax
Income Tax
Intelligence Cell or the Commissioner has definite information in his hands that any person
has concealed the particulars of income or investment, he may, by order in writing- require any
person who is in immediate possession or control of any money, bullion, jewellery, financial
instrument, financial asset, valuable article or any other property not to remove, part with,
or otherwise deal with it without obtaining previous permission of the concerned authority
passing such order:
ƒƒ
Every such order shall cease to have effect after the expiry of a period of one year
from the date of the order made.
ƒƒ
The income tax authority may extend such period or periods with the approval of the
Board. Provided that the total period of extension shall in no case exceed one year.
ƒƒ
In computing the period if any, for which the order has been stayed by any court, shall
be excluded.
71.
Avoidance of Double Taxation [Section 144]
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 Ordinance and also under corresponding law of the other
country. Under the agreement, each dominion determines the total income of an assessee in
the ordinary way under its own laws but in respect of the source of income or categories of
transactions, as specified in the agreement, it is entitled to retain tax on such portion of the
income there from as is calculated according to the percentage as embodied in the agreement.
At present, Government of Bangladesh has entered into agreement for the avoidance of
double taxation with the following 28 countries:
Belgium
India
Norway
Singapore
Thailand
Canada
Indonesia
Oman
South Korea
Turkey
China
Italy
Pakistan
Sri Lanka
UK
Denmark
Japan
Philippines
Sweden
USA
France
Malaysia
Poland
Switzerland
Vietnam
Germany
Netherlands
Romania
72.
Relief in respect of Foreign Income [Section 145]
Where there is no reciprocal arrangement for avoidance of double taxation, relief is available
in respect of doubly taxed income. If any person who is resident in Bangladesh during any
year can prove to the satisfaction of the Deputy Commissioner of Taxes that he paid income
tax in respect of any income arising outside Bangladesh, he shall be entitled to deduction
from Bangladesh income tax payable by him of a sum equal to the tax calculated on the
double taxed income at the Bangladesh rate of tax or at the rate of tax of the foreign country,
whichever is the lower.
86
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87
Value Added Tax
Value Added Tax
Value Added Tax
73.
Who will deduct VAT?
Following persons are responsible to deduct VAT at source, such as:
¾¾
Govt. organization;
¾¾
Semi-govt. organization;
¾¾
Autonomous organization;
¾¾
NGO;
¾¾
Bank;
¾¾
Insurance;
¾¾
Financial Institutions;
¾¾
Limited company; and
¾¾
Educational Institutions.
74.
Where to deposit the deducted VAT?
Deducted VAT amount shall have to be deposited to govt. exchequer with following area code,
such as:
Commissionerate Areas
Large Tax-payer Unit (LTU)
88
Bangladesh Tax Handbook 2013-2014
Treasury Challan Financial Code
1/1145/0010/0311
Dhaka (North)
1/1133/0015/0311
Dhaka (South)
1/1133/0010/0311
Chittagong
1/1133/0025/0311
Sylhet
1/1133/0018/0311
Rajshahi
1/1133/0020/0311
Jessore
1/1133/0005/0311
Khulna
1/1133/0001/0311
75.
Scope of VAT and its specified rates
Applicable VAT rates on various services, and areas where VAT Deduction at Sources (VDS) are
applicable shown as per following table.
Continued
Bangladesh Tax Handbook 2013-2014
89
Value Added Tax
Head #
S 001
Service
Code #
Value Added Tax
Service
Provider
S 001.10
Hotels including Club
S 001.20
Restaurant including
Club:
Rate of VAT (%)
VDS * Applicable
2013-2014
15
a) Restaurant with Air
Condition
15
b) Restaurant without
Air Condition
6
S 012
S 002
S 002.00
Decorators and Caterers
15
VDS Applicable
S 003
S 003.10
Motor Garage &
Workshop
4.5
VDS Applicable
S 003.20
Dockyard
4.5
VDS Applicable
S 004.00
Construction Works /
Firms (Builders)
5.5
VDS Applicable
S 005.10
Warehouse
15
S 005.20
Port for import or
export
15
S 006
S 006.00
Cold Storage
15
S 007
S 007.00
Advertisement
Organizations
15
S 008.10
Printing Press
15
S 008.20
Binding Organizations
15
S 009
S 009.00
Auction
15
VDS Applicable
S 010
S 010.10
Land Development
Organization
1.5
VDS Applicable
S 010.20
Building Construction
Organization
1.5
VDS Applicable
S 011.10
Video Cassette Shop
15
S 011.20
Video Games Shop
15
S 011.30
Video, Audio Recording
Shop
15
S 011.40
Video and Audio CD Rent
Provider Shop
15
S 004
S 005
S 008
S 011
Head #
VDS Applicable
VDS Applicable
Service
Code #
Telephone Service
Provider
15
S 012.11
Tele-printer Service
Provider
15
S 012.12
Telex Service Provider
15
S 012.13
Fax Service Provider
15
S 012.14
Internet Service
Provider
15
S 012.20
SIM Card Distributors
15
S 013
S 013.00
Automated Laundry
15
S 014
S 014.00
Indenting Service
15
S 015
S 015.10
Freight Forwarders
15
S 015.20
Clearing and Forwarding
Agent
15
S 016
S 016.00
Travel Agency
15
S 017
S 017.00
Community Centre
15
S 018
S 018.00
Film Studio
15
S 019
S 019.00
Photo Grapher
4.5
S 020
S 020.00
Survey Sangstha
15
VDS Applicable
S 021
S 021.00
Plants or Capital
Machineries Rent
Provider
15
VDS Applicable
S 022
S 022.00
Sweet Shop
15
S 023
S 023.10
Cinema Hall or Film
Distributor
15
S 023.20
Film Producer
15
S 024.00
Sales Centre of Furniture:
Continued
90
Rate of VAT (%)
VDS * Applicable
2013-2014
S 012.10
S 024
Bangladesh Tax Handbook 2013-2014
Service
Provider
VDS Applicable
At the time of production
6
VDS Applicable
At the time of marketing
subject to treasury
challan for 6% at
production stage
4
VDS Applicable
Continued
Bangladesh Tax Handbook 2013-2014
91
Value Added Tax
Head #
Service
Code #
Value Added Tax
Service
Provider
Rate of VAT (%)
VDS * Applicable
2013-2014
S 025
S 025.00
WASA
15
S 026
S 026.00
Goldsmith, Silversmith
and Gold & Silver Trader
2
Head #
Service
Code #
S 040.00
Security Service
Provider
15
S 042
S 042.00
Automated Saw-machine
15
S 044
S 044.00
Specialized Doctors
15
S 045
S 045.00
Legal Advisors
15
S 046
S 046.00
Health Club and Fitness
Centre
15
15
S 027
S 027.00
Insurance Company
15
S 028
S 028.00
Courier & Express Mail
Service
15
S 029
S 029.10
Medical Centre
15
S 047
S 047.00
Sports Organizer
S 029.20
Dental Clinic
15
S 048
S 048.00
Transport Contractor:
S 029.30
Pathological Laboratory
15
S 030
S 030.00
Beauty Parlor
15
S 031
S 031.00
Repairing or Servicing
of Taxable Goods
15
VDS Applicable
S 049
S 032
S 032.00
Consultancy firm and
Supervisory firm
15
VDS Applicable
S 050
S 033
S 033.00
Lessee
15
VDS Applicable
S 034
S 034.00
Audit and Accounting Firm
15
VDS Applicable
S 035
S 035.00
Shipping Agent
15
S 036
S 036.10
Air-Conditioned Bus
Service
10
S 036.20
Air-Conditioned Launch
Service
S 036.30
S 037
VDS Applicable
Rate of VAT (%)
VDS * Applicable
2013-2014
S 040
VDS Applicable
VDS Applicable
For carrying petrol and
related goods
2.25
VDS Applicable
Others goods
4.5
VDS Applicable
S 049.00
Transport Fare or Renta-car
15
VDS Applicable
S 050.10
Architect, Interior
Designer or Interior
Decorator
15
VDS Applicable
S 050.20
Graphics Designer
15
VDS Applicable
S 051
S 051.00
Engineering firms
15
VDS Applicable
S 052
S 052.00
Sound and Lighting
Instruments Rent
Providers
15
VDS Applicable
10
S 053
S 053.00
Present at Board
Meeting
15
VDS Applicable
Air-Conditioned Railway
Service
10
S 054
S 054.00
Advertisement with
Satellite Channel
15
VDS Applicable
S 037.00
Procurement Provider
4
S 055
S 055.00
15
S 038
S 038.00
Organizer of Cultural
Program with Foreign
Performers
15
Land Sellers other than
Land Developers
S 056
S 056.00
Banking and nonbanking service provider
15
S 039
S 039.10
Satellite Cable Operators
15
S 057
S 057.00
Electricity Supplier
5
S 039.20
Satellite Channel
Distributors
15
S 058
S 058.00
Chartered Airplane
or Helicopter Rent
Providers
15
VDS Applicable
Continued
92
Service
Provider
Bangladesh Tax Handbook 2013-2014
VDS Applicable
Continued
Bangladesh Tax Handbook 2013-2014
93
Value Added Tax
Head #
Service
Code #
Value Added Tax
Service
Provider
Rate of VAT (%)
VDS * Applicable
2013-2014
S 059
S 059.00
Glass Sheet
Manufacturer
15
S 060
S 060.00
Buyer of Auction Goods
4
S 061
S 061.00
Credit Card Supplying
organization
S 062
S 062.00
S 063
S 064
Head #
Service
Code #
Service
Provider
Rate of VAT (%)
VDS * Applicable
2013-2014
S 075
S 075.00
Stock or Securities
Broker
15
15
S 076
S 076.00
Social and Sports
related Club
15
Money Changer
15
S 077
S 077.00
Tour Operator
15
S 063.00
Tailoring Shop
15
S 064.10
Amusement and Theme
Park
15
S 078
S 078.00
Sales Centre of RMG of
Own Brand
5
S 064.20
Picnic Spot and
Shooting spot
15
S 099
S 099.00
15
S 065
S 065.00
House, Floor &
Space Cleaning
and Maintenance
organization
15
VDS Applicable
S 066
S 066.00
Lottery ticket seller
15
VDS Applicable
Any services not
specified under SRO #
175-Ain/2011/598-Mushak
dated 09 June 2011,
Second Schedule and
section # 14 of VAT Act.
1991 will be taxed under
this code
S 067
S 067.00
Immigration Advisor
4.5
S 099.10
4.5
VDS Applicable
S 068
S 068.00
Coaching Centre
15
Information Technology
Enabled Services
S 069
S 069.00
English Medium School
4.5
S 099.20
Other services
15
VDS Applicable
S 070
S 070.10
Private University
15
S 099.30
Sponsorship Services
7.5
VDS Applicable
S 099.40
Meditation Services
7.5
S 070.20
Medical and Engineering
College
15
VDS Applicable
S 071
S 071.00
Event Organizer
15
VDS Applicable
S 072
S 072.00
Human Resource
Providers
15
VDS Applicable
S 073
S 073.00
Human Resource
Exporters
15
S 074
S 074.00
Rent of Office Space
or Building used for
Commercial Purpose **
9
Section 3 5(2) of SRO #
Advance Trade VAT
242-Ain/2012/659-Mushak
dated 28 June 2012
4
* VDS denotes VAT deduction at source.
** VAT is exempted on rent of office space upto 300 sft. and also on the rent for residential
purposes (SRO # 08 -Aain/2011/584-Mushak, Gezzette dated 10-01-2011)
Continued
94
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95
Value Added Tax
96
Gift Tax
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Bangladesh Tax Handbook 2013-2014
97
Gift Tax
98
Gift Tax
Bangladesh Tax Handbook 2013-2014
76.
Gift Tax
The gift tax is leviable on gift made in any financial year on and from the 1st day of July 1990
at the prescribed in the schedule [u/s-3]. Gift means the transfer by one person to another of
any existing immovable or moveable property made voluntarily and without consideration of
any money or money’s worth Sec 2 (d), The Gift Tax Act 1990;
The value of property under gift other than cash shall be the value which, in the opinion of the
Deputy Commissioner of Taxes, it would fetch if sold in the open market on the date of gift.
When a property is not saleable in the open market and its 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.
77.
Exemption from Gift Tax [Section 4]
Gift tax shall not be charged under the Act in respect of the following gifts made by any
person:
1)
of property situated outside Bangladesh;
2)
to the Government or any local authority;
3)
to the following funds or institutions, for charitable purpose:
(i)
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;
(ii)
any hospital recognized or run by the Government or any local authority or
any hospital aided by the Government or any Local Authority;
(iii)
any flood or disaster management fund established or approved by the
Government;
(iv)
such institutions or funds for religious or charitable purposes, not being a
private religious institution or fund which does not ensure for the benefit of
the public, as are established in Bangladesh and approved by the Government
for such purposes or to any institution established for religious or charitable
purposes and registered under any law for the time being in force, upto 20% of
the total income determined for the concerned year or Tk. 100,000 whichever
is less;
4)
to dependent relative upto Tk. 20,000 on the occasion of his/her marriage;
5)
by way of payment of policy of insurance or annuity for any person (other than wife/
spouse) dependent upon him for support and maintenance upto Tk. 20,000;
6)
under a will;
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78.
Gift Tax
7)
under contemplation of death;
8)
to sons, daughters, father, mother, his or her spouse, own 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.
Provisions of the Gift Act shall NOT apply to following gifts made by [Section 20]
1)
a body corporate established or constituted by or under any law
2)
any institution or fund, income whereof is exempt from income tax under paragraph 1
and 2 of Part A of the Sixth Schedule of the Income Tax Ordinance 1984;
79.
Return of Gift Tax [Section 7]
Every person who had made taxable gift during any financial year of an amount as to render
him liable to gift tax under the gift tax act shall before the fifteenth day of September of the
corresponding assessment year furnish a return to the Deputy Commissioner of Taxes 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.
80.
Rates of Gift Tax [Section 3]
Percentage
Particulars
(Slab Amount of Taxable Gifts)
100
Rate (%)
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
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