Verified Facts
The tax rates in Bangladesh range from 10% to 25% for individuals, with a corporate tax rate of 25% and a value-added tax (VAT) rate of 15%, and expats should be aware of the country's tax residency rules and double taxation treaties to ensure compliance with tax laws.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Bangladesh has a territorial taxation system, where individuals and businesses are taxed on their income earned within the country, regardless of their nationality or residence status. However, residents are also subject to tax on their worldwide income, with certain exemptions and deductions available. The residency rules for tax purposes in Bangladesh are based on the individual's physical presence in the country, with residents defined as those who have been present in the country for at least 182 days in a calendar year.
The tax system in Bangladesh is administered by the National Board of Revenue (NBR), which is responsible for collecting taxes, enforcing tax laws, and providing taxpayer services. The NBR also provides guidance and support to taxpayers through its website, taxpayer assistance centers, and other channels. Bangladesh has a relatively complex tax system, with multiple tax rates, exemptions, and deductions available, making it essential for taxpayers to seek professional advice to ensure compliance with tax laws.
Personal Income Tax
| Income Bracket (BDT) | Tax Rate |
|---|---|
| 0 - 250,000 | 10% |
| 250,001 - 400,000 | 15% |
| 400,001 - 750,000 | 20% |
| 750,001 - 1,500,000 | 22% |
| 1,500,001 and above | 25% |
Individual taxpayers in Bangladesh are eligible for various deductions and allowances, including a basic allowance, housing allowance, and medical allowance, which can reduce their taxable income. Taxpayers are required to file their tax returns by the filing deadline, which is typically in November of each year, and can do so online or through a tax agent. Failure to file a tax return or pay taxes on time can result in penalties and fines, making it essential for taxpayers to comply with tax laws and regulations.
Corporate & Business Tax
- The corporate tax rate in Bangladesh is 25%, with a reduced rate of 20% for certain industries, such as textiles and garments.
- Small businesses with an annual turnover of less than BDT 50 million are eligible for a reduced tax rate of 15%.
- Bangladesh has several free zones and export processing zones, which offer tax exemptions and other incentives to businesses that operate within these zones.
- Businesses are required to register with the NBR and obtain a tax identification number (TIN) to operate in the country.
- Companies are also required to file their tax returns and pay taxes on a quarterly basis, with the final tax return due by the end of the tax year.
VAT / Sales Tax
- The standard VAT rate in Bangladesh is 15%, with reduced rates of 5% and 10% for certain goods and services.
- Exemptions are available for essential goods and services, such as food, healthcare, and education.
- A tourist refund scheme is available for foreign tourists, allowing them to claim a refund of VAT paid on certain goods and services.
- Businesses are required to register for VAT and obtain a VAT registration certificate to charge and collect VAT from customers.
For Expats & Foreign Workers
- Tax residency rules in Bangladesh are based on the individual's physical presence in the country, with residents defined as those who have been present in the country for at least 182 days in a calendar year.
- Bangladesh has double taxation treaties with 34 countries, which can help reduce or eliminate double taxation for expats and foreign workers.
- Expats and foreign workers are required to obtain a tax identification number (TIN) and register with the NBR to work in the country.
- Social security contributions are mandatory for expats and foreign workers, with a contribution rate of 10% of salary.
- Remittance rules are in place to facilitate the transfer of funds out of the country, with certain restrictions and requirements applying to expats and foreign workers.
- Expats and foreign workers may be eligible for a tax exemption on their foreign-earned income, depending on their tax residency status and other factors.
Crypto & Investment Income
- Investment income, such as dividends and interest, is subject to tax in Bangladesh, with a tax rate of 10% applicable to most types of investment income.
- Cryptocurrency transactions are subject to tax in Bangladesh, with gains from the sale of cryptocurrency considered taxable income.
- Capital gains tax is applicable to the sale of assets, such as property and shares, with a tax rate of 10% applicable to most types of capital gains.
- Tax deductions may be available for investment income and capital gains, depending on the type of investment and the taxpayer's tax residency status.