PwC Bangladesh Tax Publication Overview
PwC (PricewaterhouseCoopers) Bangladesh's tax publication provides a comprehensive summary of the Direct Tax (DT) and Indirect Tax (IDT) systems. Bangladesh's tax administration is managed by the National Board of Revenue (NBR), with the core legal framework anchored in the Income Tax Ordinance 1984 and the VAT & SD Act 2012. This report reviews key tax-risk checkpoints that Korean firms should consider when investing in or operating business in Bangladesh.
27.5%
Corporate tax rate
unlisted companies
15%
VAT rate
standard rate
varies
WHT
withholding tax 10~30%
introduced 2012
TP regime
transfer pricing controls
8.5%
Tax-to-GDP
low tax-to-GDP ratio
35 countries
DTA
double taxation relief network
Direct Tax (DT) Framework
Major Direct Tax Rates in Bangladesh
| Type | Tax base | Rate | Note | Korean comparator |
|---|---|---|---|---|
| Corporate tax | Unlisted corporation | 27.5% | Listed company: 22.5% | South Korea 24% |
| Corporate tax | EPZ company | 0% to 10% | 10-year waiver, then 50% phased for 5 years | special zone incentives |
| Dividend WHT | Non-resident dividends | 20% | DTA may apply | Korea-BD DTA 15% |
| Interest WHT | Non-resident interest | 20% | DTA may apply | Korea-BD DTA 10% |
| Royalty WHT | Royalty payments | 20% | DTA may apply | Korea-BD DTA 10% |
| Capital gains tax | Asset transfers | 15% | non-residents | Korea 22% |
Indirect Tax (IDT) Framework
VAT
Standard rate15%
Reduced rates5/7.5/10%
Zero/Exemptagri products, pharmaceuticals, education
Filingmonthly (Mushak-9.1)
Customs Duty
Top rate25%
Average rate12%
Raw materials0~5%
Finished products10~25%
01
Corporate tax and minimum tax
Although Bangladesh's headline corporate tax rate is 27.5% for unlisted firms, a minimum tax rule applies from 0.25% to 0.6% of gross income when tax liability from regular computation is low. Even loss-making periods can still generate minimum tax obligations, so tax burden during early years should be modeled carefully. EPZ entities are exempt from minimum tax during the exemption period.
02
Transfer pricing rules
Bangladesh has applied transfer pricing rules since 2012 and enforces the Arm's Length Principle for cross-border related-party transactions. TP documentation obligations apply to transactions between Korean headquarters and Bangladesh affiliates, including raw material sales, royalty payments, and management service charges; these are key audit focus areas in NBR tax inspections.
03
VAT compliance and refunds
Bangladesh VAT (15%) operates via the input tax credit mechanism. Exporters may claim VAT refunds on input VAT, but refund administration remains procedurally complex and delays are common, often 6 to 12 months. EPZ and SEZ entities enjoy VAT exemptions, and 100% export-oriented bonded-warehouse operations may receive VAT relief on raw material imports.
04
Tax risk controls for Korean firms
(1) Utilize the Korea-Bangladesh DTA to reduce WHT rates: dividends 15%, interest 10%, royalties 10%. (2) Prepare transfer-pricing documentation early for parent-affiliate transactions. (3) PE risk: a fixed place of business or site operations may trigger permanent establishment exposure. (4) VAT refunds: maintain robust export evidence and supporting documents. (5) Engage local advisers such as PwC, Deloitte, A. Qasem, etc.
Tax Compliance Process
TIN registration
NBR taxpayer identification number
→↓
BIN registration
VAT registration for business entities
→↓
Monthly VAT
Mushak-9.1 filing
→↓
Quarterly WHT
withholding tax filing and payment
→↓
Annual corporate tax
after fiscal-year closure
→↓
Tax audit
NBR routine and ad-hoc audits
BIDA FDI HeatmapForeign direct investment overview map
KOTRA New Vision BriefingIntegrated entry strategy and market outlook
Bangladesh's tax system combines a 27.5% corporate income tax, 15% VAT, and various withholding taxes. Particular attention is required for transfer pricing and the minimum tax regime. Using the Korea-Bangladesh DTA can reduce WHT on dividends, interest and royalties, while EPZ/SEZ firms can access up to 15 years of tax incentives. Structured tax governance with local Big 4 advisory support remains critical.
taxationPwCcorporate taxVATtransfer pricing
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