Tax Structure and Rates of Different Taxes:

           (1) Income Tax

 Rate of tax on companies listed with stock exchange is 30% while for others the rate is 35%. For banks and financial institutions, the rate is 40%. The rate of tax on inter-corporate dividend is 15%, rate of corporate capital of gain tax is 15%. Remittance of post-profit tax by branch companies is taxed @15% as dividend. As to individual tax, the first Taka 75,000 of total annual income being exempt, the balance is taxed at four slab rates of 10, 15, 20 and 25 percent, minimum tax payable being Taka 1,200. Non-resident individuals are taxed at the maximum rate of 25%. Rate of individual capital gain tax is 15%.

Principal Indirect Taxes are Customs Duty, VAT, Supplementary Duty and Infrastructure Development Surcharge.

          (2) Customs Duty

Customs duty has four tiers. On basic raw materials the rate is 7.5%, on intermediate raw materials it is 15%, on semi-finished goods it is 22.5% and on finished goods it is 32.5%.

          (3) VAT

VAT is payable on production and specified services @15% if the annual turnover is or above Taka 20 lakh. On imports, VAT is payable at the same rate of 15% irrespective of turnover. In respect of several services VAT is imposed at truncated rates as fixed by the National Board of Revenue. If turnover of production and services is less than Taka 20 lakhs, Turnover Tax is payable at the rate of 4%.

          (4) Infrastructure Development Surcharge

Infrastructure Development Surcharge is imposed on all imports except those exempt and on specified items of production @3.5%.

          (5) Withholding Tax

The system of Withholding Tax is there both for income tax and VAT in specified cases at fixed rates.

Board of Investment (E-mail: ecboi@bdmail.net  and Web: www.boibd.org) and Bangladesh Export Processing Zone Authority (E-mail: bepza@bdmail.net and Web: www.bangladesh-epz.com) are sponsoring agencies of the Government for foreign investment in Bangladesh. All foreign investors may contact these agencies to avail of all facilities and institutional support services as provided by the Government of Bangladesh.