“Foreigners don’t get in trouble because they make money in Bangladesh.
They get in trouble because they didn’t know the rules that come after.”
What’s Tax Got to Do with a Business That’s Just Getting Started?
If you’re a foreign entrepreneur in Bangladesh, the real tax story starts after your company gets registered.
You don’t feel it when you sign the incorporation papers.
You feel it when someone asks,
“Did you file your VAT return this month?”
Or,
“I heard the tax deadline is next month. Are you ready to file?”
And that’s when you realize you’re not just running a company—you’re now part of a new system. New legal obligations. Compliances.
The money you bring in, the salaries you pay, the profits you send out—all of it flows through the country’s tax framework, managed by the National Board of Revenue (NBR). And if you’re not keeping up, that framework starts pushing back.
This blog is your go-to guide to understanding how corporate tax, monthly filings, profit remittance, and reporting duties actually work for foreign-owned companies in Bangladesh.
Corporate Tax: Where It All Starts
There’s no “foreign company tax” in Bangladesh.
Once you’re registered, you follow the same corporate tax rules as local entities—with some added bits if you’re repatriating profit. Another mention-worthy info: your tax rate depends on your company type.
Corporate Tax Overview
- Private Limited Company (foreign-owned): 27.5%
- Branch Office: 27.5% on profit + 20% on any profits sent abroad
- Listed Public Company: 20%
- Capital Gains: 15%
- Dividend Tax (non-residents): 30%
Heads up: Even if you earn nothing, you may still owe a minimum tax. Usually 0.6% of total receipts.
VAT: Small Word, Big Penalty
If you’re VAT-registered, you must file monthly—even if you didn’t make a sale.
- Standard VAT rate: 15%
- Registration is mandatory for businesses crossing BDT 3 crore in turnover
- Returns due by the 15th of every month
Sectors like IT or consulting might qualify for reduced rates (5%–10%), but don’t assume; check first.
Advance Tax: Pay Now, Not Later
Bangladesh expects companies to pay Advance Income Tax (AIT) in four chunks—one every quarter.
Each installment covers 25% of your expected tax.
Miss a deadline? You’ll owe interest, even if you settle up at year-end.
Withholding Tax: Not Optional
Whenever you pay employees, consultants, landlords, or vendors—you may be required to deduct a percentage and deposit it as tax.
This is called Withholding Tax (WHT), and it includes:
- TDS on salaries
- Taxes on rent, services, royalty payments
- Foreign contractors or licensing
You don’t just report this—you collect and submit it. Forget, and you’ll owe the whole amount yourself (plus penalties).
The National Board of Revenue (NBR) tracks this through your monthly withholding filings.
Repatriating Profits? Plan Your Tax First!
Want to send profits home?
If your business is a branch office or remitting dividends as a WOS, there’s a 20% tax on the money leaving Bangladesh.
This comes after you’ve already paid your corporate tax.
To do it legally, you’ll need:
- Bank clearance
- BIDA permission (in some sectors)
- Proof that your taxes are up to date with the NBR
Don’t treat it as a last-minute transfer—this process takes time.
Deadlines You Can’t Afford to Miss
| Requirement | Deadline |
| Income Tax Return | Within 7 months after the FY end |
| Audit Report (RJSC) | Within 30 days of your AGM |
| Schedule X (to RJSC) | Within 21 days of your AGM |
| VAT Return | 15th of every month |
| Advance Tax (AIT) | Quarterly |
| Trade License Renewal | Annually (usually June–July) |
Quick tip: You also need to file Form 23B—that’s the official notice of auditor appointment—within 30 days of confirming your auditor.
Mistakes Foreign Entrepreneurs Often Make
- Assuming VAT doesn’t apply because “we’re still small.”
- Paying large vendor bills in cash—which creates audit red flags.
- Forgetting that advance tax is… well, advance.
- Thinking your accountant will file everything (ask. always ask.).
- Letting the nominee director’s details go stale in the RJSC records.
- Missing Schedule X when submitting annual return
These aren’t rare. They’re common. And every one of them has cost someone money.
Tax Breaks You Might Be Eligible For
Bangladesh does offer benefits if you know where to look:
- 5–10 year tax holidays in EPZs and special zones
- Import duty relief for capital machinery
- Reduced tax rates for IT services and exporters
- Cash incentives for sectors like garments, leather, and agriculture
But nothing here is automatic. You have to apply, qualify, and document everything through BIDA and NBR.
Is It All Manageable?
Yes, if you build systems, not just spreadsheets.
Bangladesh doesn’t actively hunt you down for tax violations.
It just waits. Quietly. Until you forget something important—and then the fees start adding up.
Stay ahead. Stay filed. Stay clean.
Final Thought
This isn’t about rules.
It’s about running something that doesn’t fall apart in its third year.
You came here to build.
So don’t lose what you’ve built to silence, delay, or bad assumptions.
If you know what to file, when to file it, and who you trust to get it done—the tax system won’t be your enemy. It’ll just be another part of the rhythm of growth.
FAQ
Do I need to pay tax even if my company didn’t earn anything?
Yes. Even with zero profit, your company may still be subject to minimum tax — usually a percentage of your gross receipts. And you still have to file your return. No income doesn’t mean no paperwork.
Is VAT mandatory if I’m a service-based company?
If your yearly revenue crosses BDT 3 crore—yes, absolutely. Even if you’re service-based, even if you didn’t charge VAT this month—you’re expected to register and file. Missing VAT filings lead to penalties!
What happens if I skip Advance Tax (AIT)?
It adds up fast. Bangladesh expects you to pay estimated income tax quarterly. If you skip it and underpay later, you’ll owe interest, even if your final tax is accurate. AIT isn’t optional—it’s expected.
Can I repatriate profits without paying extra tax?
Nope. If you’re sending profits abroad—especially from a branch office—there’s a 20% remittance tax on the way out. It’s in addition to your corporate tax. You’ll need proper filings and clearance, too.
Do I have to submit audit reports even if my revenue is low?
Yes. All registered companies in Bangladesh are required to submit audited financial statements annually to RJSC—regardless of size or revenue. Skipping audit reports is a classic (and costly) mistake.
Is dividend tax applicable if I don’t take the profit out of the company?
Only when it’s declared and distributed. But once you declare dividends to non-resident shareholders, expect a 30% tax unless a tax treaty applies. Keep profit in the business = no dividend tax (for now).
