The income tax system in Bangladesh is governed by the Income Tax Ordinance, 1984, which was amended several times over the years. The National Board of Revenue (NBR) is the agency responsible for administering and enforcing the income tax laws in Bangladesh.
Here are some key features of the income tax system in Bangladesh:
Tax Rates: The tax rates in Bangladesh vary depending on the type of taxpayer and the amount of income earned. The tax rates for individuals range from 0% to 30%, while for companies the rate is fixed at 25%.
Tax Return Filing: All individuals and companies are required to file annual tax returns by September 30th of each year. Late filing of tax returns can result in penalties and fines.
Tax Deductions: Taxpayers in Bangladesh are allowed to claim various deductions and exemptions from their taxable income, including for contributions to charitable organizations, medical expenses, and life insurance premiums.
Taxation of Foreign Nationals: Non-resident individuals and companies are subject to tax on their Bangladesh-sourced income only. However, certain types of income, such as dividends and royalties, may be subject to withholding tax.
Tax Audits: The NBR has the authority to conduct tax audits of taxpayers to ensure compliance with the income tax laws. Taxpayers are required to maintain proper books and records and provide necessary information to the tax authorities during an audit.
Tax Treaties: Bangladesh has entered into double taxation avoidance agreements with several countries to prevent the same income from being taxed twice in both countries.
Overall, the income tax system in Bangladesh is complex, and compliance can be challenging for taxpayers. However, the government has taken steps to simplify the tax system and improve tax administration in recent years.