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Entrepreneurship => Registration of Company => Topic started by: Golam Kibria on May 30, 2012, 09:56:37 PM

Title: Corporate Tax in Bangladesh
Post by: Golam Kibria on May 30, 2012, 09:56:37 PM
Bangladesh Corporate Tax Rates

The standard rate of corporate tax in Bangladesh is 27.5% in 2010 - 2011 tax year. This is the standard corporate tax rate applicable to publicly traded companies in Bangladesh, a list including tax rates for other corporations are as follows:

Publicly Traded Company                                         27.5%
Non-publicly Traded Company                                  37.5%
Bank, Insurance & Financial Company                     42.5%
Mobile Phone Operator Company                            45%
Publicly Traded Mobile Operator Company              35%

If any publicly traded company (excluding Mobile Operator Company) declares more than 20% dividend, 10% rebate on total tax allowed.

Title: Re: Corporate Tax in Bangladesh
Post by: Golam Kibria on May 30, 2012, 09:57:56 PM
Tax Rebate for investment

Rate of Tax Rebate:

Amount of allowable investment is either actual investment in a year or up to 25% of total income or Tk. 10,00,000/-
whichever is less. Tax rebate amounts to 10% of allowable investment.

Types of investment qualified for the tax rebate are:
- Life insurance premium ,
- Contribution to deferred annuity ,
- Contribution to Provident Fund to which Provident Fund Act, 1925 applies ,
- Self contribution and employer's contribution to Recognized Provident Fund ,
- Contribution to Super Annuation Fund ,
- Investment in approved debenture or debenture stock, Stocks or Shares ,
- Contribution to deposit pension scheme approved by the government,
- Contribution to Benevolent Fund and Group Insurance premium ,
- Contribution to Zakat Fund ,
- Donation to charitable hospital approved by National Board of Revenue ,
- Donation to philanthropic or educational institution approved by the Government ,
- Donation to socio-economic or cultural development institution established in Bangladesh by Aga Khan Development Network ,
- Donation to ICDDR,B, Dhaka Community Hospital,
- Donation to philanthropic institution- CRP, Savar, Dhaka,
- Donation upto five lac to (1) Shishu Swasthya Foundation Hospital Mirpur, Shishu Hospital, Jessore and Hospital for Sick Children, Satkhira run by Shishu Swasthya Foundation, Dhaka, (2) Diganta Memorial Cancer Hospital, Dhaka, (3) The ENT and Head-Neck Cancer Foundation of Bangladesh, Dhaka; and (4) Jatiya Protibandhi Unnayan Foundation, Mirpur, Dhaka;
- Asiatic Society of Bangladesh;
- Muktijudha Jadughar;
Title: Re: Corporate Tax in Bangladesh
Post by: Golam Kibria on May 30, 2012, 09:59:46 PM
Income Tax Authorities in Bangladesh

Income Tax Authorities in Bangladesh are:
- National Board of Revenue,
- Director General of Inspection (Tax),
- Commissioner of Taxes (Appeals),
- Commissioner of Taxes (LTU)
- Director General (Training),
- Director General Central Intelligence Cell (CIC),
- Commissioner of Taxes,
- Additional Commissioner of Taxes (Appeal/Inspecting),
- Joint Commissioner of Taxes(Appeal/Inspecting ),     
- Deputy Commissioner of Taxes,
- Assistant Commissioner of Taxes,
- Extra Assistant Commissioner of Taxes,
- Inspectors of Taxes.

Tax Withholding Functions

In Bangladesh withholding taxes are usually termed as Tax deduction and collected at source. Under this system both private and public limited companies or any other organization specified by law are legally authorized and bound to withhold taxes at some point of making payment and deposit the same to the Government Exchequer. The taxpayer receives a certificate from the withholding authority and gets credits of tax against assessed tax on the basis of such certificate.

Title: Re: Corporate Tax in Bangladesh
Post by: Golam Kibria on May 30, 2012, 10:02:41 PM
Bangladesh Value Added Tax (VAT) Rates

The general rate of Value Added Tax (VAT) in Bangladesh is 15%.

- Value Added Tax (VAT) is imposed on goods and services at import stage, manufacturing, wholesale and retails levels;
- A uniform VAT rate of 15% is applicable for both goods and services;
- 15% Value Added Tax (VAT) is applicable for all business or industrial units with an annual turnover of Taka 2 million and above;
- Turnover tax at the rate of 4% is leviable where annual turnover is less than BDT 2 million;
- Value Added Tax is applicable to all domestic products and services with some exemptions;
- Value Added Tax (VAT) is payable at the time of supply of goods and services;
- Tax paid on inputs is creditable / adjustable against output tax;
- Export is VAT exempt;
- Cottage industries (defined as a unit with an annual turnover of less than BDT 2 million and with a capital machinery valued up to BDT 300,000) are exempt from Value Added Tax;
- Tax returns are to be submitted on monthly or quarterly or half yearly basis as notified by the Government.
Title: Re: Corporate Tax in Bangladesh
Post by: goodboy on June 01, 2012, 12:46:51 AM
Income Tax and Corporate Tax in Budget 2011-12

To ensure equitable development throughout the country and provide better services to the people, several steps have been proposed in the budget 2011-12 for the Simplification of Tax Payment 152 augmentation of income tax collection from domestic sources, simplification and modernisation of the system for filing of income tax return and payment of tax.

Threshold level for individuals is proposed to taka 1,80,000 from taka 1,65,000. Comparative tax rates is as below:

             Existing Tax Rates                                                       Proposed Tax Rates
Level of Income (Taka)      Tax Rate                     Level of Income (Taka)                Tax Rate
up to 1,65,000                         0%                                    upto 1,80,000                              0%             
1,65,001 - 4,40,000                10%                                  1,80,001 - 4,80,000                     10%
4,40,001 - 7,65,000                15%                                  4,80,001 - 8,80,000                      15%
7,65,001 - 11,40,000        20%                                   8,80,001 - 11,80,000               20%
above 11,40,000                25%                                       above 11,80,000                       25%

The proposed rate for cigarette manufacturers to be increased to 42.5 per cent to discourage smoking.

Finance Minister proposed to introduce submission of acknowledgement receipt of return submission side by side TIN certificate in certain cases, introduce online service for payment of tax through specified banks against registration or renewal of fitness of car/motor vehicle, organise tax fair from 17-22 September 2011 in all divisional headquarters to provide one-stop service for submission of return and introduce provision.

Tax holiday incentive proposed up to June, 2013 and list of 17 categories industrial undertakings eligible for tax holiday. Active pharmaceuticals ingredient industry and radio pharmaceuticals industry, Barrier contraceptive and rubber latex, basic chemicals or dyes and chemicals, basic ingredients of electronic industry, bio-fertilizer, biotechnology, boilers, Compressors, computer hardware, energy efficient appliances, insecticide or pesticide, petro-chemicals, pharmaceuticals, processing of locally produced fruits and vegetables, radio-active application industry, textile machinery and tissue grafting.

Also propose to withdraw tax holiday incentives for industries set up in Dhaka, Narayangonj, Gazipur and Chittagong districts to avoid human and traffic congestion , to ensure balanced industrialisation and to encourage setting up of new industries in backward areas.

Tax holiday facility will be available for 10 years for rapid transit, toll road, elevated expressway, deep sea port, IT parks, Hi-tech park, renewable energy and ICT village or software technology zone.

Proposed to repeal the SRO related to reduced tax rates for certain industries being a duplication of the tax holiday incentive and rationalize the scope of Corporate Social Responsibility (CSR) to encourage its compliance in the budget. Proposed to ensure inter-company loan to be transacted through bank and put a limit on amount spent by the companies for purchase of car or jeep on the basis of paid up capital.

To rationalise the source tax rates for registration of flat, building or space of real estate developers on the basis of residential or commercial purposes. To consider as capital asset any land property situated in the district of Dhaka, Gazipur, Narayanganj or within the jurisdiction of RAJUK, CDA, KDA, RDA, City Corporation, Paurashava and Cantonment Board. The rate of tax deduction at source from all export proceeds to 1.5%, instead of 0.40%/0.50% and rate of tax deductible at source for brokerage commission of stock brokers listed with Stock Exchange from 0.05% to 0.10%.

Finance Minister proposed in budget 2011-2012 to raise the tax rate from 5% to 10% of disputed tax for filing appeal to Taxes Appellate Tribunal and from 10% to 25%/50% for filling reference to High Court. To make provision giving authority to Commissioner of Taxes to waive the tax payment requirement in proper cases.
Please check:

http://economy-bd.blogspot.com/2011/06/income-tax-and-corporate-tax-in-budget.html (http://economy-bd.blogspot.com/2011/06/income-tax-and-corporate-tax-in-budget.html)
Title: Re: Corporate Tax in Bangladesh
Post by: nature on March 10, 2013, 12:37:04 AM
Informative post.........tax rate.