Business Tax in Bangladesh

FM Consulting International is one of the leading business tax services providers and advisors in Bangladesh. We help you prepare and pay your business tax on time. Filing a business tax return in Bangladesh can be cumbersome and divert you from your operations if your corporation tax is not paid in accordance with the laws of Bangladesh. Our tax preparation help ensures you stay compliant with the taxation laws as well as filing your business tax within the due time.

Business income tax

In Bangladesh, business income tax is paid on business income — the profit that has arisen or accrued from conducting any business or trade in Bangladesh. Business income also includes the value of any benefit or perquisite that the business has come across within the relevant tax year.

Accounting method

The methods of tax accounting in Bangladesh are almost similar to International Accounting Standards. The accounting method for a company is similar to the statutory audit required under the Companies Act 1994 — i.e. the income tax audit and statutory audit are similar. Along with the submission of the tax return, the company has to submit Audited Financial Statements for the period then ending, audited in accordance with the Bangladesh Standards on Auditing, and prepared in accordance with Bangladesh Accounting Standards and Bangladesh Financial Reporting Standards.

Who is subject to Bangladesh income tax?

Every Company, Branch Office, Liaison Office, Representative Office, and Joint Venture Company (JV) registered in Bangladesh must file an annual tax return with the National Board of Revenue (NBR).

Tax rates in Bangladesh

To learn about tax rates in Bangladesh, read our blog article on Corporate Tax in Bangladesh.

Income tax return form Bangladesh

The income tax return form in Bangladesh is called the IT-11GHA 2016. It contains 6 parts:

• Part I — Basic Information: names, type of business, your auditors in Bangladesh, details of tax year, etc.
• Part II — Particulars of Income and Tax: amount of income from business in Bangladesh, amount of business tax, minimum tax in Bangladesh, advance tax, details of tax refund, etc.
• Part III — Particulars of Tax Benefits: amount of income tax exemption, tax rebate, etc.
• Part IV — Principal figures of Financial Statements.
• Part V — Other particulars: bank accounts, affiliated entities, etc.
• Part VI — Instructions, Enclosures and Verification.

Set-off of losses

During the formulation of tax strategies and at the income tax planning stage, a company has to take into account the set-off provisions formulated in the taxation laws of Bangladesh. If a business has income from several heads, then, subject to some conditions, it can get relief on tax to be paid on a head in which it has made a profit.

Carry forward

During the calculation of corporation tax, a company has to keep provisions for carry forward of losses from earlier years. Such carry forward of business income tax losses is permitted under the income tax laws of Bangladesh, provided the loss is not from speculation business and the loss cannot be set off wholly in a tax year. Carry forward of losses from earlier tax years can be set off in the following tax years for a period of up to six assessment years.

Tax Day

A company always has to take into account the deadlines for filing its tax return. The tax return submission date in Bangladesh is called Tax Day. Tax Day for a company in Bangladesh is the 15th day of the seventh month after the income year ends. The income year in Bangladesh is generally July to June — though MNCs can take special approval from the National Board of Revenue to change their income year.

Withholding taxes, payroll taxes and indirect tax

To learn about withholding taxes, payroll taxes and indirect tax in Bangladesh, read our blog article on Corporate Tax in Bangladesh.