Tax in Bangladesh

Who is the tax authority?

The National Board of Revenue (NBR) sits under the Internal Resources Division of the Ministry of Finance. NBR has three wings: the Income Tax Wing, the VAT Wing (Mushak), and the Customs Wing. Thirty-one Tax Zones handle direct-tax filings across the country.

Credentialed practitioners are Chartered Accountants (CA Bangladesh) regulated by the Institute of Chartered Accountants of Bangladesh (ICAB) under the Bangladesh Chartered Accountants Order 1973, and Cost and Management Accountants (CMA) regulated by ICMAB. Income Tax Practitioners (ITP) are registered under the Bangladesh Bar Council framework.

The substantive law is the Income Tax Act 2023, which replaced the Income Tax Ordinance 1984 effective 1 July 2023. VAT is governed by the VAT and Supplementary Duty Act 2012. Annual Finance Acts adjust rates and brackets.

What is the tax year and when are returns due?

Bangladesh uses a mid-year fiscal calendar: the income year runs 1 July to 30 June. This places Bangladesh in a small group of countries worldwide that do not use the calendar year for tax purposes — a critical distinction for cross-border workers and multinationals whose parent uses a December year-end.

The non-calendar fiscal year is one of Bangladesh's most distinctive tax features. Workers moving between a December-year-end parent company and a Bangladeshi entity face a mid-year mismatch that requires careful pro-rata apportionment for advance tax calculations.

Who counts as a Bangladeshi tax resident?

Under Section 2(40) of the Income Tax Act 2023, an individual is resident in Bangladesh if either test is met: (a) physically present in Bangladesh for 182 days or more in the income year, OR (b) physically present for 90 days or more in the income year AND 365 days or more in the four immediately preceding years.

The four-year/90-day rule is one of South Asia's distinctive residency provisions. It catches frequent business-traveller foreign nationals who would not be resident under the 182-day single-year test alone. Careful day-counting across five years is required to avoid unexpected residency.

Residents pay tax on worldwide income. Non-residents pay tax on Bangladesh-source income at flat or withholding rates — typically 30% on most income categories, with treaty rates applying downward where a DTA is in force.

What are the personal income tax rates?

Bangladesh uses six PIT brackets under the Finance Act 2024. The tax-free threshold varies by category:

A wealth surcharge applies on top of income tax for high-net-worth individuals. The surcharge is calculated as a multiplier on the underlying income tax liability, not as a direct tax on wealth.

An investment-allowance rebate at 15% of qualifying investments (savings certificates, government bonds, life insurance premiums, retirement contributions) reduces final liability up to specified caps.

How does corporate tax work?

Bangladesh's corporate income tax rate depends on company type and sector. The RMG (Ready-Made Garment) export sector receives a reduced rate reflecting its role in generating over 80% of export earnings.

Withholding tax on dividends to non-residents is 20%. Tax loss carryforward is 6 years; carryback is not available. Pillar Two has not yet been transposed into Bangladeshi law as of mid-2026. Minimum Tax under Section 163 of the Income Tax Act 2023 applies at 0.6% of gross receipts — this floor catches loss-making businesses with significant turnover.

Special Economic Zones (BEPZ under the BEPZA Act 1980 and BEZA under the BEZA Act 2010) offer tax holidays of 7–10 years for qualifying investment projects.

What about VAT and indirect tax?

Bangladesh's Value Added Tax (VAT) is governed by the VAT and Supplementary Duty Act 2012. The standard rate is 15% on most supplies of goods and services.

Supplementary Duty (SD) applies as a separate layer on luxury and demerit goods. Tobacco products carry very high SD rates — up to 350% or higher — in addition to the standard VAT structure.

The VAT registration threshold is annual turnover above BDT 30 million. Businesses below BDT 30 million but above BDT 8 million use simplified VAT frameworks. Businesses below BDT 8 million pay a simplified turnover tax at 4%. Monthly VAT returns are filed by the 15th of the following month using Mushak-9.1 form. Mushak-6.3 accounting software is mandatory for medium and large taxpayers. Cross-border digital services to Bangladeshi consumers from non-resident vendors have been subject to VAT registration requirements since 2019.

What is the Advance Income Tax (AIT) framework?

Bangladesh operates one of South Asia's most withholding-intensive tax systems. Advance Income Tax (AIT) is collected at the point of import — customs authorities collect AIT on imports as a pre-payment of the importer's annual corporate tax liability. AIT is creditable against the final year-end liability.

The broader Tax Deducted at Source (TDS) regime under Sections 86–101 of the Income Tax Act 2023 applies across a wide range of payment categories: supplier payments, contractor fees, professional service fees, employee salary, rent, and interest. The withholding rates are category-specific and granular.

Year-end reconciliation of AIT collected on imports against final corporate tax liability is a significant compliance task. Over-collected AIT requires a formal refund application within prescribed time limits — unclaimed refunds are forfeited.

What is the currency and forex framework?

Bangladesh's currency is the Taka (BDT). The Bangladesh Bank operates a managed float — the central bank intervenes to limit exchange-rate volatility. Significant BDT devaluation pressure occurred in 2022–2024 due to declining foreign-exchange reserves and global dollar strength.

Diaspora remittances are a major source of Bangladesh's foreign-exchange earnings — second only to RMG exports. The Bangladesh Bank operates the Wage Earner Development Bond and other instruments for the diaspora community. Remittances received by Bangladeshi residents from family members abroad are generally not taxable income under existing NBR guidance.

How are cryptoassets treated?

Bangladesh has one of the strictest crypto positions in South Asia. Bangladesh Bank circulars issued in 2014, 2017, and 2019 explicitly prohibit cryptoasset transactions under the Foreign Exchange Regulation Act 1947 framework.

Enforcement focuses on bank-channel detection — banks scan transactions for cryptocurrency-exchange patterns. Mining and staking operations are not formally regulated and face FERA-violation exposure. Bangladeshi residents holding cryptoassets abroad should obtain specific legal guidance before any disclosure or repatriation.

What is the treaty network?

Bangladesh maintains approximately 36 active bilateral double tax agreements. The network spans the UK, US, India, China, Japan, Korea, Singapore, Malaysia, Thailand, UAE, Saudi Arabia, Germany, France, Netherlands, Italy, Switzerland, and others.

Bangladesh is a signatory to the OECD Multilateral Instrument (MLI) but had not deposited its ratification instrument as of late 2024. Treaty modifications continue through bilateral protocols. The US–Bangladesh treaty signed in 2004 remains politically sensitive — the US Senate has not acted on ratification, leaving US nationals working in Bangladesh without treaty relief on Bangladesh-source income.

Where does Bangladesh sit in the South Asia cohort?

Bangladesh anchors the South Asia mid-tier cohort — progressive PIT, differentiated CIT, mid-year fiscal calendar, and deep withholding-at-source infrastructure. The South Asia region spans five distinct tax archetypes:

Common pitfalls for foreign nationals and multinationals

Bangladesh's tax system has several traps that regularly catch cross-border investors and assignees:

When should you talk to a Bangladeshi tax pro?

Some Bangladesh filings are manageable through NBR's e-return portal. Others have enough complexity to warrant a credentialed CA Bangladesh or ITP practitioner:

• Your income crosses the 20% or 25% brackets (above BDT 1,150,001 from the threshold)
• You are a foreign national present in Bangladesh across multiple years and need to track the 90-day/four-year residency rule
• Your company operates in banking, financial services, tobacco, or RMG sectors — each has a distinct CIT rate
• You are importing goods and need to reconcile AIT against annual corporate tax liability
• You received an NBR notice of assessment, audit letter, or Taxes Appellate Tribunal referral
• Your net wealth exceeds BDT 40 million — the wealth surcharge framework applies
• You have cross-border payments requiring Bangladesh Bank approval under FERA
• You are a US national working in Bangladesh and need to understand the unratified US–BD treaty gap
• Your business operates as an RMG exporter and you need to confirm eligibility for the 12% reduced CIT rate

Vetted Bangladesh practitioners are listed in the directory below.

This page is general information only. It is not personal guidance for your specific situation. Tax rules change. Always check current figures on nbr.gov.bd or with a licensed CA Bangladesh before filing.