1. What are the key tax laws and regulations in Bangladesh that individuals and businesses should be aware of?
Like any other advanced economy, tax legislation in Bangladesh broadly consist of three legislations, namely (a) the Customs Act 1969, (b) Supplementary Duty and Value Added Tax Act 2012 (SD&VAT Act) and (c) Income Tax Act 2023. A foreign investor which is a legal entity and intends to do business in Bangladesh should be aware of the applicable rate of tax that will be imposed for importing machineries and raw materials. The SD&VAT Act deals with indirect tax that is imposed on the goods and services sold or rendered by an entity in the local market. As far as income tax is concerned, a foreign investor should be aware of the corporate tax rate and various obligations for withholding taxes and the compliance regime that must be followed to take benefit of allowable expenditure. The National Board of Revenue (NBR) is the relevant authority responsible for managing the aforementioned three legislations. They have been vested with various extensive powers to issue statutory regulatory orders (SRO) from time to time. At times, provision of SROs can make a lot of difference between tax exemption and a higher level of tax obligation.
