BIDA

General Incentives

General Incentives

To facilitate and encourage investment, the Government of Bangladesh provides various fiscal and non-fiscal incentives, privileges and facilities comprising of exemptions/reduction of corporate income taxes, reduced import taxes on capital machineries and raw materials, reduced VAT, provision of export subsidies and various other banking facilities and privileges. These incentives are subject to revision upon annually enacted Finance Act and individual Statutory Regulatory Orders (SROs).

Companies located in EZs/EPZs are entitled for different sets of incentive package of tax exemption.

Incentive for newly established companies

Reduced corporate income tax is offered to newly established businesses based on sector and location.

Incentive

Reduced corporate income tax of 5 to 10 years

Eligibility

The duration and percentage of tax reduction will depend on the sector combined with the location of the firms.

Scheme Tenure

July 2019-June 2024

Sector eligible for income tax reduction

Under Income Tax Ordinance 1984, section 46BB, newly established firms between July 1, 2019 and June 30, 2024 belonging to the following sectors are eligible for reduced income taxes.

Location

The business belonging to the above sectors can enjoy tax exemption on a varied rate and reduced tax for various periods depending on the location of the operation.

Five-year tax exemption is offered to businesses located in Dhaka Division and Chattogram Division, but excluding the districts of Dhaka, Narayanganj, Gazipur, Chattogram, Rangamati, Bandarban and Khagrachari districts, the period of tax exemption is for five years, which will begin in the month of commencement of commercial production at the following rate.

Period of Exemption Rate of Exemption
For the first year 90% of income
For the second year 80% of income
For the third year 60% of income
For the fourth year 40% of income
For the fifth year 20% of income

Ten-year tax exemption is offered to businesses located in Rajshahi Division, Khulna Division, Sylhet Division and Barisal Division, but excluding areas under the city corporations. Businesses that set up in the districts of Rangamati, Bandarban and Khagracchari also enjoy this tax holiday period.

Period of Exemption Rate of Exemption
For the first and second year 90% of income
For the third year 80% of income
For the fourth year 70% of income
For the fifth year 60% of income
For the six year 50% of income
For the seventh year 40% of income
For the eighth year 30% of income
For the ninth year 20% of income
For the tenth year 10% of income

Conditions: To enjoy tax exemption or benefits, i) register investments with BIDA, ii) apply to National Board of Revenue (NBR), and iii) receive a certificate from NBR within 45 days of the application.

Import duty exemption
Incentives and facilities for export-oriented industries

Export-oriented industries (exporting more than 80% of their goods and services) regardless of their locations (i.e., within or outside EZ/ EZ) can benefit from the following privileges and facilities:

Public-Private Partnership (PPP) Projects

The following incentives and facilities are provided for certain Public Private Partnership (PPP) projects.

100 % exemption on Income tax

Exemption on capital gain tax on share capital, royalty, technical know-how and technical assistance

Income tax exemption for foreign technicians

List of physical infrastructure facility eligible for Tax exemption under section 46CC of Income Tax Ordinance: (10 years)
Period of Exemption Rate of Exemption
For the first and second year 90% of income
For the third year 80% of income
For the fourth year 70% of income
For the fifth year 60% of income
For the six year 50% of income
For the seventh year 40% of income
For the eighth year 30% of income
For the ninth year 20% of income
For the tenth year 10% of income
Other facilities and privileges
Accelerated depreciation:
Tariff refund or duty drawback facility
Bonded warehousing facilities
Other facilities relevant to foreign investors
Double Taxation Treaties

Double Taxation Treaties (DTTs) are bilateral agreements that protect the income of foreign investors from being taxed in two different countries. Bangladesh has Double Taxation Treaties or DTTs with 34 countries. Businesses need to obtain approval from NBR to benefit from the DTT. The approval is subject to annual renewal.

Parties
Incentives and facilities for business located in Special Economic Zones/Economic Zones.

Businesses located in SEZ/EZ are entitled to a separate set of incentives.

BEZA incentives
BEZA incentives
Hi Tech Park Incentives: