2021 Bangladesh Tax System Analysis
This report provides a comprehensive analysis of Bangladesh's 2021 tax system — covering corporate income tax, value-added tax (VAT), customs duties, withholding taxes, transfer pricing, and tax strategy for Korean companies.
Bangladesh's tax system is administered by the NBR (National Board of Revenue). The FY2021-22 budget introduced significant changes including corporate tax rate reductions, VAT digitalization, and strengthened transfer pricing regulations. Foreign companies need to pay particular attention to tax compliance obligations.
27.5%
Corporate Tax
unlisted
22.5%
Listed Co.
corporate tax
15%
VAT
standard rate
0–25%
Customs Duty
by product
Varied
Withholding Tax
by transaction
20%
Dividend Tax
foreign entity
July–June
Fiscal Year
FY
NBR
Authority
National Board of Revenue
Key Tax Rate Structure
Bangladesh Key Tax Rates (FY2021-22)
| Tax Type | Rate | Applies To | Notes | Korea Comparison |
|---|---|---|---|---|
| Corporate Tax (unlisted) | 27.5% | General companies | Reduced from 32.5% | Korea: 25% |
| Corporate Tax (listed) | 22.5% | DSE-listed | Reduced from 25% | — |
| Corporate Tax (EPZ) | 0–10% | Zone companies | Exemption + reduction | — |
| VAT | 15% | Goods & services | Standard rate | Korea: 10% |
| Customs Duty | 0–25% | Imports | Low rate on raw materials | — |
Tax Incentives and Reductions
Special Economic Zone Tax Regime
BEZA Zones10-year corporate tax holiday
BEPZA EPZs10-year corporate tax holiday
Additional Reduction50% for 5 years thereafter
CustomsMachinery & raw materials duty-free
Sector-Specific Incentives
IT & SoftwareCorporate tax exemption (until 2024)
Power & Energy15-year corporate tax exemption
Agro-processing10-year corporate tax reduction
Tourism10-year corporate tax exemption
Tax Strategy for Korean Companies
01
Transfer Pricing (TP) Management
NBR's transfer pricing regulations have been strengthened, making TP documentation mandatory for transactions between Korean parent companies and Bangladesh subsidiaries (raw material purchases, royalties, management fees). Prices must be set in accordance with the Arm's Length Principle (ALP) under the Korea-Bangladesh Double Tax Avoidance Agreement (DTAA), with annual TP reports submitted.
02
Leveraging the Korea-Bangladesh Tax Treaty
Utilize the Korea-Bangladesh Double Taxation Avoidance Agreement (DTAA) to prevent double taxation. Actively apply treaty benefits including reduced withholding taxes on dividends (15%), interest (10%), and royalties (10%), permanent establishment (PE) determination rules, and tax credits.
03
VAT Management
Bangladesh's VAT (15%) operates on an input-output offset basis, with exports subject to zero-rate (0%). Korean companies should systematically manage monthly VAT filing, input tax credit tracking, and zero-rate application for exports. The electronic VAT system (EFD) expanded significantly in 2021.
04
Tax Audit Preparedness
Maintain rigorous accounting books and supporting documentation in preparation for NBR tax audits. Engage Korean accounting firms' Bangladesh affiliates (Samil PwC, Samjong KPMG, Hanyoung EY) or local Big4 offices (PwC, Deloitte, EY, KPMG) for tax advisory and audit response.
Tax Management Flow
Tax Management Process
TIN Issuance
NBR registration
→↓
Tax Filing
Corporate tax & VAT
→↓
TP Documentation
Transfer pricing
→↓
Treaty Application
DTAA utilization
→↓
Audit Readiness
Books management
Maximizing Bangladesh's tax incentives while maintaining rigorous compliance is the key to optimizing investment returns for Korean companies.
2021 Company RegistrationExplore the 2021 Bangladesh company registration guide
2021 Investment IncentivesExplore the 2021 Bangladesh investment incentives
Tax SystemCorporate TaxVATCustoms2021
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