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.
Reduced corporate income tax is offered to newly established businesses based on sector and location.
Reduced corporate income tax of 5 to 10 years
The duration and percentage of tax reduction will depend on the sector combined with the location of the firms.
July 2019-June 2024
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.
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.
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:
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
| 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 |