Bangladesh Tax Guide 2020 Overview
This practical tax guide for Korean companies operating in Bangladesh explains core corporate tax, VAT, and withholding tax rates, filing and payment processes, and the application of the Korea-Bangladesh Double Taxation Avoidance Agreement (DTA). Tax compliance is a critical risk-control area for local market operations.
Corporate Tax Details
Corporate tax rates vary from 22.5% to 45% depending on sector, listing status, and location. Firms in economic zones can receive 10 years of tax holiday and 5 years of 50% relief. The fiscal year is July to June, and annual tax filing is typically completed between September and November.
| Type | Rate | Condition | Remark |
|---|---|---|---|
| Listed company | 22.5% | DSE/CSE listed | Lowest nominal rate |
| Unlisted company | 30% | General | Same as foreign company |
| RMG | 12% | Exports over 80% | Sector incentive |
| Tobacco | 45% | - | Highest rate |
| Economic zone | 0% (10 years) | BEZA member | 50% relief for next 5 years |
| IT/ITES | 0% (until 2024) | BHTPA registered | Export software |
VAT and Withholding Tax
VAT is set at 15% standard rate and applies to most goods and services. Small firms with annual turnover below USD 35,000 are subject to 4% turnover tax instead. Withholding tax applies to salaries, rent, service fees, interest, and dividends, and rates range from 3% to 15% by payment type.
DTA and Transfer Pricing
The Korea-Bangladesh DTA, effective since 2005, applies reduced rates of 10–15% for dividends, 10% for interest, and 10% for royalties to avoid double taxation. Transfer pricing rules have applied since 2014, requiring related-party transactions to follow the arm's-length principle.