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Index
Index
Page
Page
Major Changes in Bangladesh Taxation Laws 2013-2014
1.
2.
3.
10
4.
10
5.
10
6.
10
7.
10
8.
10
9.
11
10.
12
11.
12
12.
12
13.
12
14.
13
15.
13
16.
14
17.
16
18.
16
19.
17
20.
17
21.
Extension of time to avail reduced tax rate for certain industrial companies
17
22.
18
23.
18
18
19
26.
20
1.
23
2.
23
Index
Index
Page
3.
23
4.
23
5.
23
6.
24
7.
26
8.
26
Page
24.
Capital Gains
45
25.
46
26.
47
27.
47
28.
Set-Off of Losses
48
29.
48
30.
48
31.
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.
30
3.
Charge of Surcharge
31
4.
31
33.
53
5.
31
34.
54
6.
31
35.
32
54
7.
8.
32
36.
56
9.
33
37.
56
57
60
10
33
38.
11.
33
39.
62
62
12.
34
13.
Deemed Income
34
41.
Initial depreciation
14.
36
42.
Accelerated Depreciation
62
43.
63
44.
64
45.
70
15.
37
16.
37
17.
18.
76
37
47.
76
38
48.
76
19.
40
49.
76
20.
40
50.
77
41
51.
78
22.
41
23.
44
78
5
Index
Income Tax
Page
78
54. Assessments
79
80
56.
81
57.
81
58.
82
59.
Transfer Pricing
82
60.
83
61.
83
62.
83
63.
83
64.
84
65.
84
66.
84
67.
85
68.
85
69.
85
70.
85
71.
86
72.
86
89
74.
89
75.
89
Gift Tax
76.
Gift Tax
77.
78.
99
99
100
79.
100
80.
100
Income Tax
Income Tax
1.
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.
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.
Nil
Nil
Nil
Nil
Nil
Nil
10%
ii.
10%
15%
iii.
15%
iv.
20%
iv.
20%
v.
25%
v.
25%
Non-resident (Foreign)
assessee
25%
Non-resident (Foreign)
assessee
25%
ii.
i.
Income Tax
Income Tax
3.
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:
Minimum tax is Taka 2,000 for resident of District Head Quarters and Paurashavas
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.
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.
Tax @ 3% has been withdrawn on the sale of share premium over face value.
7.
40%
35%
45%
42.5%
40%
35%
8.
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:
Plinth area up to
200 square meters,
Tax amount per
square meter (Taka)
5,000/-
7,000/-
4,000/-
5,000/-
2,000/-
3,000/-
1,000/-
1,500/-
700/-
1,000/-
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.
11
Income Tax
10.
Income Tax
Period of Exemption
Tax exempted house rent allowance has been increased from Tk. 180,000 to Tk. 240,000.
100% of income
11.
70% of income
Tax exempted conveyance allowance has been increased from Tk. 24,000 to Tk. 30,000.
55% of income
12.
Changes regarding the extent of admissible allowance [Section#44, sixth schedule part-B]
40% of income
25% of income
10% of income
Sl.
13.
Particulars
Actual investment
34
Assessment Year
2013-2014
Assessment Year
2012-2013
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.
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:
10%
Period of Exemption
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
60% of income
40% of income
12
Rate of Exemption
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
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
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:
ten per cent (10%) of such fees where the person receiving such fees furnishes
his taxpayers Identification Number (TIN) to the payer; or
fifteen per cent (15%) of such fees where the person receiving such fees fails
to furnish his Taxpayers Identification Number (TIN) to the payer.
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.
15.4
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.
Sections
Heads of
& Rules Withholding tax
52B
Rates of withholding
(AY: 2013-2014)
Rates of withholding
(AY: 2012-2013)
6% of the value of the
banderols.
Continued
14
Rates of withholding
(AY: 2013-2014)
Rates of withholding
(AY: 2012-2013)
Continued
Bangladesh Tax Handbook 2013-2014
15
Income Tax
Sl.
No
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)
17.
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.
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:
Every such order shall cease to have effect after the expiry of a period of one year
from the date of the order made.
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.
In computing the period if any, for which the order has been stayed by any Court,
shall be excluded.
19.
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.
21.
Paragraph 11 A: Income from dividend amounting to Tk. 10,000 previously it was Tk. 5,000.
Paragraph 35: Any income from the export of handicrafts for the period from 01 July
2011 to 30 June 2015, previously it was 2013.
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.
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
Till 30 June
2013
Till 30 June
2013
Till 30 June
2013
3% till 30 June
2015
5% till 30
June 2013
Continued
16
17
Income Tax
22.
Income Tax
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
25% of income
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.
1,000/-
2,000/-
5,000/-
10,000/-
Applicable area
Upto 3 Years
1,000/-
Upto 4 Years
2,000/-
Upto 5 Years
3,000/-
Upto 10 Years
5,000/-
Every person shall, for the purpose of obtaining Tax-payers Identification Number (TIN)
referred to in section 184B of the Ordinance, submit an application
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)
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.
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)
3,000/-
25.
Length of profession
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)
Continued
18
19
VAT
26.
Tax Incentives
Summary of VAT Changes in FY: 2012-2013
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%]
Withholding VAT:
Areas of withholding VAT extended by the following:
Minimum value added tax shall be payable by small businessmen and shop owner who
got registration voluntarily as per following table:
Sl
No.
20
Applicable Area
Annual Maximum
VAT Rate
Value Addition (Taka)
80,000/-
15%
12,000/-
Other City
Corporations
60,000/-
15%
9,000/-
Paurashava
of District
headquarters
40,000/-
15%
6,000/-
Other areas
20,000/-
15%
3,000/-
Activity Name
CO 17.28
CO 38.30
Furniture
21
Tax Incentives
22
Tax Incentives
1.
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.
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 @ 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.
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.
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.
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:
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.
6.
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
Owners (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
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.
25
Tax Incentives
Income Tax
7.
Under certain conditions, tax is fully exempted on the Interest on money borrowed from
abroad by:
Government
Statutory bodies
Industrial undertakings
8.
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
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.
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
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.
28
29
Income Tax
Income Tax
ii.
iii.
i.
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 Superannuation Fund
yy Advance Salary
yy Project pay
yy Leave Encashment
yy Compensation pay
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.
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.
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.
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.
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:
Any benefits other than the items included under salary shall be considered as
perquisites - Examples of perquisites are:
Dearness Allowance
2.
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
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 companys 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.
31
Income Tax
Income Tax
7.
9.
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.
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
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%
Minimum tax is Taka 2,000 for resident of District Head Quarters and Paurashavas
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.
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.
Nil
Nil
Non-Resident
33
Income Tax
Income Tax
12.
Any income which falls under the head Salaries, wherever paid, if [Section 18(1)]:
it is earned in Bangladesh; or
it is paid by Bangladesh Government or local authority in the service of such
government or authority;
b.
c.
d.
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;
f.
13.
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
Goodwill, compensation or damages, etc. - Income from Other Sources [Section 19(10)]
XI
XII
XIII
Lotteries, crossword puzzles etc. - Income from Other Sources [Section 19(13)]
XIV
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
XIX
XX
Income from sale of assets of capital nature - Income from Business or Profession
[Section 19(20)]
XXI
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
XXIV
Un-adjustable security money taken from tenant - Income from House Property
[Section 19(22)]
II
III
IV
Ownership of any money, bullion etc. - Income from Other Sources [Section 19(5)]
XXV
VI
XXVI
VII
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)]
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.
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.
#
Plinth area up
to 200 square
meters, Tax
amount per square
meter (Taka)
5,000/-
7,000/-
4,000/-
5,000/-
2,000/-
SL.
#
3,000/-
Plinth area up
to 200 square
meters, Tax
amount per square
meter (Taka)
1,000/-
1,500/-
700/-
1,000/-
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.
17.
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.
The return of income is submitted within the time as specified u/s 75 (2)
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
37
Income Tax
Income Tax
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;
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.
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]:
Any proceeding under section 164,165,166 has been initiated before submission of such
return of income ;or
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:
An amount equal to the sum by which the cash payments, if any, made by
employer exceeds the actual expenditure incurred by the employee;
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;
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.
18.
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-
38
any salary due from an employer to the assessee in the income year whether
paid or not;
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.
xi.
19.
20.
a.
Interest receivable by the assessee on any security of the government or any security
approved by the government;
b.
c.
ii.
ii.
iii.
iv.
v.
vi.
vii.
viii
ix.
b.
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.
ii.
iii.
iv.
receipt back of loss, bad debt or expenditure and unpaid trading liability as referred
to section 19 (15);
v.
vi.
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).
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.
The allowable deductions which have been specifically mentioned are the following:
i.
ii.
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.
v.
vi
vii.
Insurance premium for insurance against risk of damage etc. of buildings plant etc.
used in business or profession [Para # 1(vii)]
viii
ix
42
Income Tax
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
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
xi
xxiii
xii
xxiv
xiii
xxv.
xiv
The amount of bad debt, which is established to have become irrecoverable, under
the stated circumstances [Para # 1(xv)]
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.
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.
43
Income Tax
xxviii.
xxvix.
xxx.
Income Tax
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.
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
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.
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)]
24.
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
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.
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
i.
By purchase the actual cost of the Actual cost of the previous owner as reduced by
asset;
depreciation allowance;
ii.
25.
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.
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)]
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.
Following income of an assessee is assessable under the Income from Other Sources:
a.
Dividend;
b. Interest;
c.
d.
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.
47
Income Tax
Income Tax
28.
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
iv
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
viii
Income of the personnel of the foreign missions, not being a citizen of Bangladesh.
[Para # 7]
ix
Pension. [Para # 8]
xi
xii
xiii
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
xvii
xviii
xix
xx
xxi
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
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
48
xxv
Income from the export of handicrafts upto 30 June 2015. [Para # 35]
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
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.
Income from any Small and Medium Enterprise (SME) having annual turnover not
more than Taka 3,000,000. [Para # 39]
iii.
xxx
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;
iv.
v.
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.
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.
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:
B.
51
Income Tax
Income Tax
Period of Exemption
For the first two years ( 1st and 2nd year)
60% of income
40% of income
20% of income
c.
52
33.
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
70% of income
55% of income
40% of income
25% of income
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
The profit and gain shall be computed under the head income from business
or profession (section 28)
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;
Capital gains earned by tax holiday undertaking shall not be exempt from tax;
Industrial Undertaking
yy Textile;
yy Jute goods;
yy Computer hardware;
yy Pharmaceuticals;
yy Petro chemicals;
yy Plastic products;
yy Agricultural machine;
yy Textile machinery;
yy Sanitary ware;
yy Fertilizer;
yy Melamine;
yy Flyover;
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.
53
Income Tax
34.
Income Tax
Tax Holiday for Hospitals [SRO 204-Ain/IT/2005 dated 6th July 2005]
a.
A newly established private hospital will be eligible for exemption of income for
another 5 years subject to the following conditions:
b.
The hospital is owned by a company registered under the Companies Act 1913 or 1994;
c.
The hospital is established between the period 1st July 1999 to 1st July 2008 in the
private sector;
d.
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
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
yy
yy
yy
yy
underground rail;
The exemption shall apply to the said facility if it fulfills the following conditions, namely:-
a body corporate established by or under any law for the time being in force
with its head office in Bangladesh; or
(ii)
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;
55
Income Tax
Income Tax
36.
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:
Cottage industry
XIII.
XIV.
The processing which help agricultural produce turned into marketable goods
without any power generated manufacturing operation
XV.
Exception
37.
XVI.
Investment Allowance for Tax Rebate [Section 44 (2) & (3) and Part B of Sixth Schedule]
a.
Sl. #
VIII.
IX.
X.
XI.
XII.
b.
Tax Rebate: Tax Rebate @ 15% of the eligible investment shall be allowed as Rebate.
c.
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.
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%
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]
5% on
5% on
undistributed undistributed
porfit
porfit
37.50%
37.50%
Continued
56
57
Income Tax
SL.
No.
ii
Income Tax
New Rate
AY 2013-14
Assessee
Previous Rate
AY 2012-13
SL.
No.
xiii.
42.5%
42.5%
15% on excess
profit
Merchant bank
37.50%
42.50%
iii
37.50%
37.50%
iv
Assessee
Previous Rate
AY 2012-13
10%
10%
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%
45%
45%
20%
20%
15%
15%
20%
20%
Person or Individual
25%
25%
vi
15%
15%
20%
20%
vii
10%
10%
Individual
10%
10%
viii
15%
15%
15%
ix.
Textile Industries
15%
15%
x.
Jute Industries
15%
15%
xi.
At applicable rate on
total income
including
capital gain
At applicable rate on
total income
including
capital gain
xii.
xiv.
40%
35%
45%
42.5%
15%
Continued
58
New Rate
AY 2013-14
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
At the rate
applicable on
total income
including said
income
OR
@ 15% on the
capital gain
whichever is
lower
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
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
10%
iii
a) General rate
Remarks
SL
No.
Class of Assets
1) Ocean-going ships (new)
20%
Ships
12%
* 10 years or more
24%
24%
20%
20%
20%
24%
30%
6) Bangladeshi
software
50%
computer
30%
30%
30%
30%
30%
30%
Continued
Bangladesh Tax Handbook 2013-2014
The allowance is
to be calculated
on the original
cost
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
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.
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.
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:
42.
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
30%
(2)
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.
63
Income Tax
44.
Income Tax
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
SL.
No.
5
Section/
Particulars
Rule #
52 (1) &
Indenting commission received through remittance
Rule 17
Shipping agency commission received through
remittance
52 A (1)
10
52A(2)
10
52 A (3)
10
15
10
1.5
52AA
10
52AAA
10
11
52 B
10
12
52 C
Nil
1
2.5
3.5
13
52 D
14
52 F
Nil
0.60
15
52 I
Tk. 30,000
Tk. 45,000
Tk. 60,000
Continued
64
Rate of
deduction (%)
7.5
5
Continued
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
Tk . 300
Tk. 300
Tk. 100
15
4
5
20
52 P
21
52 Q
10
22
52R
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
0.05
30
53 BBBB
0.80
31
53 C &
Rule 17D
32
53 CC
15
33
53 D
10
34
35
53 DDD
53 E(1)
53 E(2)
1
23
52 S
24
53 & Rule
17A
25
53A
26
53 AA
5
3
36
53 EE
37
53 F
7.5
15
Taka 1,00,000
10
10
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
SL.
No.
41
42
43
44
45
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
46
47
39
53 G
40
53 GG
15
55 & Rule
17
56
with
more
than 10%
20
10
25
20
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
69
Income Tax
45.
Income Tax
Form of Return of WithholdingTax under Income Tax Ordinance, 1984 (Ord. XXXVI OF 1984)
8.
SL.
(1)
1.
2. TIN/UTIN:
3.
TCAN -
4.
(a) Circle:.
5.
Deduction/Collection Period:
6.
2.
.. ;
.. ;
.. ;
.. ;
(a)
3.
Address:
(b) Phone:
(c)
4.
Fax No.:
(d) E-mail:
(e)
7.
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
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 buyers
agent.
Continued
72
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:
74
10. Tax shall be deposited to respective account code according to the following table:
Name of the Zone
Income taxPerson
Income taxCompany
Other Fees
1-1141-0001-0111
1-1141-0001-0101
1-1141-0001-1876
1-1141-0005-0111 1-1141-0005-0101
1-1141-0005-1876
1-1141-0010-0111
1-1141-0010-1876
1-1141-0010-0101
1-1141-0015-0111
1-1141-0015-0101
1-1141-0015-1876
1-1141-0020-0111
1-1141-0020-0101
1-1141-0020-1876
1-1141-0025-0111
1-1141-0025-0101
1-1141-0025-1876
1-1141-0030-0111
1-1141-0030-0101
1-1141-0030-1876
1-11410035-0111
1-1141-0035-0101
1-1141-0035-1876
1-1141-0080-0111 1-1141-0080-0101
1-1141-0080-1876
1-1141-0085-0111
1-1141-0085-0101
1-1141-0085-1876
1-1141-0090-0111 1-1141-0090-0101
1-1141-0090-1876
1-1141-0095-0111
1-1141-0095-0101
1-1141-0095-1876
1-1141-0100-0111
1-1141-0100-0101
1-1141-0100-1876
1-1141-0105-0111
1-1141-0105-0101
1-1141-0105-1876
1-1141-0110-0111
1-1141-0110-0101
1-1141-0110-1876
1-1141-0115-0111
1-1141-0115-0101
1-1141-0115-1876
1-1141-0120-0111
1-1141-0120-0101
1-1141-0120-1876
1-1141-0125-0111
1-1141-0125-0101
1-1141-0125-1876
1-1141-0130-0111
1-1141-0130-0101
1-1141-0130-1876
1-1141-0135-0111
1-1141-0135-0101
1-1141-0135-1876
1-1141-0140-0111
1-1141-0140-0101
1-1141-0140-1876
1-1145-0010-0111 1-1145-0010-0101
1-1145-0010-1876
1-1145-0005-0111 1-1145-0005-0101
1-1145-0005-1876
1-1141-0040-1876
1-1141-0045-0111
1-1141-0045-0101
1-1141-0045-1876
1-1141-0050-0111 1-1141-0050-0101
1-1141-0050-1876
1-1141-0055-0111
1-1141-0055-0101
1-1141-0055-1876
1-1141-0060-0111 1-1141-0060-0101
1-1141-0060-1876
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
1-1141-0075-0111
1-1141-0075-0101
1-1141-0075-1876
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.
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
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.
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 ones income during
any financial year will be less than the last assessed income, one may submit an estimate of
income of ones 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.
owns a more than one story building with an area of more than 1,600 sft;
ii.
iii.
subscribes a telephone;
iv.
b.
c.
47.
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.
e.
48.
f.
g.
Provided that payment does not exceed Taka 10,000 can be made through treasury challan.
h.
49.
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
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:
51.
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.
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
Return shall be submitted in Tax Circle in which companys 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;
ii.
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.
Penalty shall be imposed under section # 124 if return is not submitted within
prescribed time period;
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.
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.
52.
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
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.
79
Income Tax
Income Tax
55.
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;
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.
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.
Section # 52DDD
Section # 53FF
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.
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.
81
Income Tax
2.
Income Tax
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 amounts
amount constituting compensations or reimbursements exclusively
for expenditures effected by the said person for the purchase
of equipments for the oil company, which are, in fact, not his
responsibility; and
58.
b.
c.
d.
e.
f.
g.
h.
Transfer Pricing
82
(3)
Arms 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;
(a)
(b)
60.
Determination of income from international transaction having regard to arms length price
[Section #107B]
The amount of any income, or expenditure, arising from an international transaction shall be
determined having regard to the arms length price.
61.
Deputy Commissioner of Taxes, with prior approval of the Board, may refer the determination
of the arms length price to the Transfer Pricing Officer, the Transfer Pricing Officer, with prior
approval of the Board, may proceed to determine the arms length price in relation to any
international transaction.
62.
59.
(1)
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.
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
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.
The most appropriate method for determining the arms length price of an international
transaction shall be the method that, under the facts and circumstances, provides the most
reliable measure of an arms length price in relation to the international transaction.
68.
Information and documents to be kept and maintained under section l07E [Rule#73]
Particulars
Section# 107G
Penalty
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
Section#107I
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
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 = arms length price
(b)
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
(c)
Cost plus method: Direct and indirect costs + comparable profit mark-up + adjustment
=arms 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 = arms length price.
contracts, terms and agreements of the transactions with associated enterprise; etc.
The functions performed, the risks assumed and the assets employed
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
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
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:
Every such order shall cease to have effect after the expiry of a period of one year
from the date of the order made.
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.
In computing the period if any, for which the order has been stayed by any court, shall
be excluded.
71.
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.
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
87
Govt. organization;
Semi-govt. organization;
Autonomous organization;
NGO;
Bank;
Insurance;
Financial Institutions;
Educational Institutions.
74.
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
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.
Applicable VAT rates on various services, and areas where VAT Deduction at Sources (VDS) are
applicable shown as per following table.
Continued
89
Service
Code #
S 001.10
S 001.20
Restaurant including
Club:
15
b) Restaurant without
Air Condition
S 012
S 002
S 002.00
15
VDS Applicable
S 003
S 003.10
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
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
15
S 011.20
15
S 011.30
15
S 011.40
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
15
S 012.13
15
S 012.14
Internet Service
Provider
15
S 012.20
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
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
15
S 023.20
Film Producer
15
S 024.00
Continued
90
S 012.10
S 024
Service
Provider
VDS Applicable
VDS Applicable
VDS Applicable
Continued
Bangladesh Tax Handbook 2013-2014
91
Service
Code #
S 025
S 025.00
WASA
15
S 026
S 026.00
Goldsmith, Silversmith
and Gold & Silver Trader
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
15
15
S 027
S 027.00
Insurance Company
15
S 028
S 028.00
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
15
VDS Applicable
S 050
S 033
S 033.00
Lessee
15
VDS Applicable
S 034
S 034.00
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
S 040
VDS Applicable
VDS Applicable
2.25
VDS Applicable
Others goods
4.5
VDS Applicable
S 049.00
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
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
S 055
S 055.00
15
S 038
S 038.00
Organizer of Cultural
Program with Foreign
Performers
15
S 056
S 056.00
15
S 039
S 039.10
15
S 057
S 057.00
Electricity Supplier
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
VDS Applicable
Continued
Bangladesh Tax Handbook 2013-2014
93
Service
Code #
S 059
S 059.00
Glass Sheet
Manufacturer
15
S 060
S 060.00
S 061
S 061.00
S 062
S 062.00
S 063
S 064
Head #
Service
Code #
Service
Provider
S 075
S 075.00
Stock or Securities
Broker
15
15
S 076
S 076.00
15
Money Changer
15
S 077
S 077.00
Tour Operator
15
S 063.00
Tailoring Shop
15
S 064.10
15
S 078
S 078.00
S 064.20
15
S 099
S 099.00
15
S 065
S 065.00
15
VDS Applicable
S 066
S 066.00
15
VDS Applicable
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
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
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
** 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
95
96
Gift Tax
97
Gift Tax
98
Gift Tax
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 moneys 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.
Gift tax shall not be charged under the Act in respect of the following gifts made by any
person:
1)
2)
3)
(ii)
(iii)
(iv)
4)
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;
99
Gift Tax
78.
Gift Tax
7)
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)
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.
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.
Particulars
(Slab Amount of Taxable Gifts)
100
Rate (%)
10
15
20
101
Gift Tax
102
Gift Tax
103