Corporate tax in Bangladesh is the tax companies pay on their taxable profit. It is applied to almost all businesses and other taxable entities, including eligible foreign companies. However, the amount of tax they pay depends on the applicable corporate tax rate and the provisions of the Income Tax Act, 2023, and the Finance Act, 2026.
Businesses can also enjoy tax exemptions, benefits, and incentives if they meet the required conditions. That is why it’s important to understand the tax rules and their calculation methods to pay the correct amount of tax, claim available tax benefits, and avoid penalties. It also makes tax filing and compliance easier throughout the year.
What Is Corporate Tax in Bangladesh?
Corporate tax is the income tax that applies to companies and other taxable business entities and is imposed on the profits they earn during an income year. The government mainly uses these funds to raise public revenue, distribute wealth, and regulate the economy.
In Bangladesh, the Income Tax Act, 2023 mainly governs the corporate tax. However, the government updates the tax rules through the Finance Act every year, and the National Board of Revenue (NBR) issues SROs, notifications, circulars, and other official guidelines that businesses must follow.
Regarding corporate tax, many people confuse it with other types of taxes businesses pay. However, there are some key differences between them. For instance:
- Corporate tax is a type of business tax. But business tax is a general term that can include corporate tax, VAT, withholding tax, and other taxes a business pays.
- Companies pay corporate tax, where individuals pay personal income tax on their income.
- Corporate tax is charged on a company’s profit, while VAT is charged on the sale of goods and services.
- Companies pay corporate tax on their taxable profit. In contrast, TDS is tax deducted from certain payments. Dividend tax applies when profits are distributed to shareholders.
Who Needs to Pay Corporate Tax in Bangladesh?
Corporate tax applies to companies and other taxable business entities that earn taxable income in Bangladesh. The following entities are generally required to pay corporate tax in Bangladesh.
- Resident companies
- Non-resident companies
- Foreign companies and Permanent Establishments (PE)
- Business entities subject to corporate tax
- Public Limited Company
- Private Limited Company
- One Person Company (OPC)
- Branch Office
- Taxable trusts
- Association of Persons (AOP)
- Other taxable entities
- Companies not subject to corporate tax
What Is the Corporate Tax Rate in Bangladesh for AY 2026–2027?
The corporate tax rate in Bangladesh for Assessment Year (AY) 2026–2027 depends on the type of company. The standard tax rates remain mostly unchanged under the Finance Act, 2026. As for the corporate tax roadmap, the government is encouraging companies to become publicly listed, use banking channels for business transactions, and meet tax compliance requirements by offering lower tax rates.
Here is the overview of the corporate tax rate in Bangladesh AY 2026–2027.
| Company type | Standard Rate | Compliant (Banking) Rate |
|---|---|---|
| Publicly traded company (≥10% public shareholding) | 22.5% | 20.0% |
| Publicly traded company (<10% public shareholding) | 25% | 22.5% |
| Other non-publicly traded companies (Standard Private Ltd.) | 27.5% | 25.0% |
| One Person Company (OPC) | 22.5% | 20.0% |
| Trust, Association of Persons (AOP), and Firm | 27.5% | Not applicable |
However, companies may qualify for reduced tax rates if they route all types of income and transaction receipts through formal banking channels. Moreover, mobile phone operator companies that transfer at least 20% of their paid-up capital through an IPO are eligible for a 10% rebate on the applicable income tax in the year of the transfer.
What Are the Industry-Specific Corporate Tax Rates in Bangladesh?
Apart from the standard corporate tax rates, some industries have different corporate tax rates. Check it out below.
| Industry / Entity | Corporate tax rate (AY 2026–2027) |
|---|---|
| Banks/ Insurance/ Finance companies – publicly traded, not merchant banks | 37.5% |
| Banks/ Insurance/ Finance companies – not publicly traded | 40% |
| Companies manufacturing tobacco products | 45% |
| Mobile Phone Operator Companies | 45% |
| Taxpayer who is not a company but manufactures tobacco products | 45% |
| Co-operative societies | 20% |
| Private University/ Private Medical College/ Private Dental College/ Private Engineering College/ Specified IT college | 5% |
| Merchant banks | 37.5% |
| Export-oriented readymade garment (RMG) manufacturers | 12% |
| Green factories | 10% |
How Is Corporate Tax Calculated in Bangladesh?
Corporate tax is calculated on a company’s taxable income, not the total revenue it earns. To determine the tax payable amount, companies need to calculate their total income for the income year and subtract the allowable deductions.
The remaining amount is taxable income, and multiply the amount by the applicable corporate tax rate.
Taxable Income = Accounting Profit + Non-deductible Expenses + Special Business Income + Special Areas of Business Income − Income Taxed Separately
Corporate Tax = Taxable Income × Applicable Corporate Tax Rate
For example, if a company earns BDT 50 million and has BDT 30 million in allowable business expenses, its taxable income will be BDT 20 million. If the applicable tax rate is 27.5%, the corporate tax payable will be BDT 5.5 million.
As for allowable deductions, as a general rule, they include all the costs incurred for the purpose of carrying out business activity and following accepted accounting practices. Companies can also claim tax depreciation and amortisation on eligible business assets.
However, the following expenses are generally non-deductible when calculating taxable income.
- Non-compliance with withholding tax
- Employee perquisites exceeding BDT 2 million per employee.
- Royalty and technical service fees exceeding 15% of disclosed net business profit or 6% of disclosed business turnover
- Head office or intra-group expenses exceeding 10% of disclosed net business profit
- Overseas travel and promotional expenses exceeding the prescribed limits
- Cash payments that should have been made through banking channels
- Unspecified liabilities
- Unapproved fund contributions
- Impairment loss provisions
- Interest on loans from associated enterprises exceeding BDT 1.5 million
What Tax Exemptions, Incentives and Rebates Are Available for Corporate Tax in Bangladesh?
The government provides different tax incentives and exemptions to encourage investment, industrial development and exports. One of these includes rebates introduced under the Finance Act, 2026.
| Filing period | Tax impact |
|---|---|
| Within 2 months before the expiry of the return filing due date | Rebate of 5% of tax liability (max BDT25,000) |
| Within the due date but after the above period | No rebate/ additional tax |
| After the due date during the remaining period of the relevant tax year | Additional tax of 2% (min BDT25,000) |
Other major corporate tax exemptions and incentives include:
- Eligible businesses in sectors such as infrastructure, industrial undertakings, ITES, handicrafts exports, and export promotion zones may receive Income-based tax incentives if they meet the required conditions.
- Industrial undertakings established in designated regions may receive Area-based tax incentives.
- Newly established manufacturing companies in selected sectors can receive a 100% corporate income tax holiday for up to 10 years.
- Eligible IT and IT-enabled service providers can receive full corporate income tax exemption until 30 June 2027
What Is the Minimum Corporate Tax in Bangladesh?
Companies generally are required to pay minimum tax on gross receipts even if they have low profit or a business loss. However, regular tax on profit, minimum tax on receipts, and taxes deducted at source will affect the final liability.
| Taxpayer category | Minimum tax rate on gross receipts |
|---|---|
| Manufacturer of tobacco products | 3.00% |
| Carbonated or sweetened beverage manufacturers | 3.00% |
| Mobile phone operators | 1.50% |
| Other companies | 1.00% |
Eligible startups can receive a preferential minimum tax rate of 0.1% on gross receipts. But they need to meet the following requirements.
- Involved in technology-driven innovative products, processes, or services,
- Have annual turnover not exceeding BDT 1 billion,
- Not be a subsidiary of another company holding 50% or more shares.
- Not be formed through amalgamation or demerger.
Startups under this regime can also carry forward business losses for up to nine years and receive some relaxations on expense disallowance and compliance requirements.
How Do Companies Register, File and Pay Corporate Tax Returns in Bangladesh?
Companies can register and file corporate tax returns following the rules set by NBR. They have to submit the corporate tax return and pay the tax within the due date.
1. Corporate Tax Registration
Organizations first need to register their business to file a corporate tax return in Bangladesh. The process generally includes getting an eTIN and incorporating the business with the Registrar of Joint Stock Companies and Firms.
2. Obtaining an e-TIN
Follow the steps below to obtain an eTIN.
- Go to the official NBR e-TIN Portal.
- Select “Company” as the taxpayer type.
- Fill out the digital form with your RJSC-approved legal company name, incorporation date, business classification, and director details.
- Submit the application for verification.
- The NBR verifies the information with the RJSC records.
- The system will issue the corporate e-TIN certificate after approval.
3. Prepare Documents Required for Corporate Tax Filing
Businesses need to prepare the following documents before filing the corporate tax return.
- e-TIN
- Certificate of Incorporation
- Trade License
- Audited financial statements
- Profit and Loss Statement
- Balance Sheet
- Bank statements
- TDS records
- VAT registration certificate
- Other supporting documents
4. Registration with RJSC and BIDA
Companies need to register with the RJSC to obtain legal incorporation before starting business operations. Depending on the nature of the business, they may also need to register with the BIDA to obtain the required investment approvals and facilities.
5. Filing Corporate Tax Returns Through the NBR Portal
To file corporate tax returns, organizations need to log in to the NBR portal using their TIN number. Then complete the prescribed return form and upload the required supporting documents. Submit the return file by the due date and keep the acknowledgement receipt for future reference after successful submission.
6. Advance Income Tax (AIT) Payment
If a company’s taxable income exceeds BDT 1,000,000, they need to pay Advance Income Tax (AIT) during the income year. The tax is payable in the following installments.
| Instalment | Due date |
|---|---|
| 1st instalment | 15 September |
| 2nd instalment | 15 December |
| 3rd instalment | 15 March |
| 4th instalment | 15 June |
7. Final Payment of Corporate Tax
After calculating the final tax liability, businesses need to pay any remaining corporate tax before filing the return. If they have paid excess tax through AIT or TDS, they can adjust it or claim it as a refund under the applicable tax rules.
Note: Organizations need to file their corporate income tax return by the 15th day of the ninth month following the end of the income year. If that date falls before 15 September, the due date will be 15 September instead.
How Can Companies Stay Compliant with Corporate Tax Laws?
Businesses can stay compliant with corporate tax laws by following the tax rules of NBR. Effective tax management can also help businesses organize their tax obligations, maintain accurate records, and meet filing and payment deadlines.
- Maintain proper accounting records: Keep accurate books of accounts, invoices, bank statements, and supporting documents.
- File tax returns on time: Submit complete and accurate corporate tax returns within the deadline.
- Pay taxes on time: Pay AIT and any remaining corporate tax by the due dates.
- Keep audited financial statements: Submit audited financial statements where required by law.
- Respond to NBR notices: Provide the requested information or documents within the specified time.
- Cooperate during tax audits: Maintain proper records and provide supporting documents during audits or assessments.
- Follow corporate governance and tax laws: Comply with the Income Tax Act, 2023, the Finance Act, and applicable NBR rules.
What Are the Corporate Tax Mistakes and Penalties in Bangladesh?
Some common corporate tax mistakes include:
- Late submission of corporate tax returns.
- Incomplete accounting records.
- Incorrect financial reporting.
- Missing supporting documents.
- Errors in TDS deduction or deposit.
- Ignoring NBR notices.
- Failure to comply with VAT requirements, where applicable.
These mistakes may result in the following.
- Financial penalties.
- Interest on unpaid tax.
- Additional tax assessments.
- Regulatory action by the NBR.
- Other penalties under the applicable tax laws.
How Can Businesses Legally Reduce Corporate Tax?
Businesses should use the tax benefits available under the Income Tax Act, 2023, and the Finance Act, 2026 to reduce their corporate tax legally. Here are some of the common tax planning strategies.
- Claim all allowable business deductions to reduce taxable income.
- Use available tax exemptions, incentives, and tax holidays.
- Meet the conditions for reduced corporate tax rates and the applicable banking transaction requirements.
- File tax returns on time to get available tax rebates and avoid additional tax.
- Maintain proper accounting records to support deductions and tax claims.
- Avoid aggressive tax planning or false claims, as these may result in penalties.
Companies must file their tax returns with the NBR and maintain the necessary financial and tax records. For individuals or other taxpayers who need to understand the filing process, see our guide on how to fill up income tax return in Bangladesh.
How Are Foreign Companies Taxed in Bangladesh?
Foreign companies are taxed only on income earned or deemed to be earned in Bangladesh. Here are the taxable presence requirements where foreign companies need to pay corporate tax.
Permanent Establishment (PE): If a foreign company has a Permanent Establishment (PE) in Bangladesh and it carries on business through a fixed place of business, it has to pay corporate tax. PE may include
- Branch office
- Office or place of management
- Factory or workshop
- Warehouse
- Construction or installation project
- Agency or dependent agent
- Mine, oil or gas well, quarry, farm, or plantation
- Service or consultancy activities carried out in Bangladesh
Bangladesh-source Income: Foreign companies are taxed only on income that
- Received in Bangladesh.
- Accrued or arising in Bangladesh.
- Deemed to accrue or arise in Bangladesh.
This income is subject to any favourable Double Taxation Avoidance Agreements (DTAA). However, there is no anti-deferral regime.
Withholding Tax Obligations: Payments remitted abroad or made to foreign/non-resident companies are subject to withholding tax (WHT) under the Income Tax Act, 2023. It may include dividends, interest, royalties, technical service fees, and service charges.
Branch and Liaison Offices: Branch offices pay corporate tax on income earned in Bangladesh. Profits sent to the foreign head office are also subject to a 20% Branch Profit Remittance Tax. Liaison offices are not subject to corporate tax.
