The value-added tax is a common issue in Bangladesh. Because of imposing this by the Bangladeshi government, a company has to take VAT registration undoing some factors. On the other hand, a consumer has to pay tax on the value of a specific service and product. Normally VAT rate is 15 % based on any product. In the case of truncated value, the VAT value varies from product to product.
When a company pays VAT on any specific products, the system of the deduction is available on any service. The VAT has to pay through the treasury challan. The Corporate Tax rate in Bangladesh is common. Every single sector of corporate has to pay tax based on some logic.
Cut Corporate Tax for All Sectors 2022
The business community is trying to reduce corporate tax. It was their long-lasting demand. But the corporate tax is not being reduced yet. The metropolitan chamber of commerce also mentioned in a speech that the corporate income tax rate has not been addressed yet. It is a debated issue in Bangladesh.
The corporate tax rate in Bangladesh is higher than in all other Asian areas. The tax is 21 percent more than other corporate taxes. In comparison to global, the tax is more than 24 percent. The global network of professional firms provides tax, advisory, and audit services.
The MCCI has requested again and again to lessen the corporate tax rate from 35 percent. Among 314 publicly listed companies, only 212 companies have been enlisted to bring under the lower rate. The lower rate percent is only 25 percent.
The Dhaka Chamber of Commerce has demanded the government lessen the corporate tax for every sing sector. The government does not accept this. Rather has reinforced to reinvest again in business.
According to the GDP ratio of private investment, 23 are present. To raise 1 percent, TK 25,000 core needs to invest in a year.
The government has taken a step to develop private sector investment. But it is challenging until the corporate income tax rate is not cut down. The expression of the trade bodies is not satisfactory. The trade bodies also mentioned disappointment for not increasing the tax-free income limit. How to Get Trade License in Bangladesh? Read here!
Corporate Tax Rate in Bangladesh 2022
The private company has conveyed congratulation on the tax incentives. The Tax incentive was taken in favor of green factories in the garment sectors. The organization also urged the government so that these steps be taken for all other industrial sectors.
MCCI appreciates shrinking VAT on E-commerce and riding services. Instead of 5 percent VAT, 4 percent VAT should be taken. The Foreign Investors and DCCI have hailed the government for sake of allocating 100 cores for taking skill development projects.
The DCCI wanted a 5 percent of tax rebate over the gross income of any company. As a result, the company will invest in skill development activities.
The DCCI also appreciated the proposal for practicing double taxation on the facial year. It is the decision to reduce the tax on imported accessories such as motorcycles, mobile phones, tire tubes, and others.
The FICCI proposed to make it obligatory to submit all information of employee statements. The Chittagong Chamber of Commerce mentioned giving a special location for the Dhaka-Chittagong eight-lane highway.
The Bangladesh Frozen Foods Association praised for the step of government that Government has allocated k 19.59 core
Take for agriculture and TK 8.84 core for fisheries and livestock development. The tax body demanded to fix the source of tax on the frozen shrimps.
Bangladesh Income Tax
Every branch office, company, liaison office must file an annual tax return according to the system of NBR.
What does a company need to file?
An annual income tax return provides information about the company’s revenue, asset, expense, net profit, and liabilities.
How much tax will a company owe?
The tax liability of a company depends on the legal activity of a company. The income tax varies on the type of company business. Tax rates table and status are given below:
- Private limited company – 35%
- Non-listed company – 35%
- Non-Resident Company – 35%
- Merchant Bank – 37.5%
- Cigarette Manufacturing Company – 45%
- Non-banking Financial institution – 40%
- Non- Publicly traded bank – 42%
- Publicly traded Listed Company – 25%
- Mobile operator Company – 45%
- Tobacco Product Manufacturing Company – 45%
The minimum Tax rate in Bangladesh 2022
A company must pay a minimum tax on its gross receipt. A company gets benefited by reducing tax in many ways.
- Showing taxable loss up to six years
- By given depreciation allowances,
- Physical infrastructure facility
- By turning public limited company
- By approving fund and gratuity fund by NBR
The Time limitation to File Income Tax Return
A company taxpayer should file their annual tax return every year. It is important to pay on time. But company taxpayers must get extended time through the permission of the deputy commissioner.
Withholding Taxes
Every single company has to pay its service provider, supplier, and employee based on a different reason.
Following the rules of NBR, a company must deduct tax at a specific rate on the source of their payment. The deducted tax is known as withholding tax. The withholding tax is taken within 6 months.
Payroll Taxes
A company can deduct tax from employee salary based on taxable salary income. In this case, a company must show the salary amount and TDS into their withholding tax return.
The corporate tax rate is higher than all other sectors in Bangladesh. 25 % tax is on the listed entities and 35 % is for the non-listed entities. The corporate tax rate is changed every year. The authority of corporate wants to tax rate reduction but this is not accepted fully by the government of Bangladesh. The government has set the corporate tax 15 % for ready-made garments and 12 % for the owner of green factories.
The exporter of woven and knitwear remains 12 %. The owner of the factories is certified as a green building internationally. The government has decided to reduce tax but not all sectors. It is especially for the export sector to ensure a level playing field.
The corporate tax rate in Bangladesh is more than all other neighboring countries such as Vietnam, Indonesia Pakistan, Thailand, Sri Lanka, Malaysia, and China. Vietnam and Thailand take a 20 percent tax charge whereas Indonesia takes 25 percent.
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