Corporate Tax Planning: Bangladesh Perspective

1. Corporate Tax Planning
M.K. Jahid Shuvo
Dept. of A&IS
Jahangirnagar University

2. Tax
A tax is a compulsory payment levied on the persons or
companies to meet the expenditure incurred on conferring common
benefits upon the people of a country.
Corporate Tax
Tax that is levied on the income of a corporation or a company.

3. THERE IS NOTHING WHICH HURTS MORE THAN PAYMENT OF TAXES…..

4. Three Common Practices to save Taxes
Tax Planning
Tax Avoidance
Tax Evasion

5. Corporate Tax Planning
Corporate Tax planning is the arrangement of financial activities in
such a way that maximum tax benefits are enjoyed by making use
of all beneficial provisions in the tax laws.
It entitles the assessee to avail certain exemptions, deductions,
rebates and reliefs, so as to minimize his tax liability.

6. Corporate
Tax
Planning
Maximize
after tax
rate of
return
Keep
proper
record
Deduct
TDS
Pay
Advance
Tax
Submit
Return on
time
Comply
with the
rules

7. Is it legal to keep taxes as low as possible?
Yes. It is
Case Reference: (Justice Learned Hand, Comm. vs. Newman, 159
F.2d 848 [CA-2, 1947]).
There is nothing sinister in so arranging one’s affairs as to keep taxes as
low as possible. ……… nobody owes any public duty to pay more than
the law demands: taxes are enforced extractions, not voluntary
contributions”

8. Objectives of corporate tax planning
Reduction of tax liability
Minimization of litigation
Healthy growth of economy
Economic stability
Taking maximum advantages of the exemptions, deduction, rebates,
reliefs and other concessions

9. Key Points To Be Remembered
It is not avoidance to payment of taxes
Tax planning should not be done with an intent to defraud the revenue.
All transactions with respect to tax planning should be in correct form and
substance.
Tax planning work should be done within the framework of law and its not
illegal.

10. What is a Company/Corporation
A company is incorporated under the Companies Act in Bangladesh and
includes:
• A body corporate established or constituted by or under any law in force
• Any nationalised bank or industrial or commercial organisation
• Any association or combination of persons, if any of such persons are
registered as a company
• An association or body incorporated by or under any laws of a country
outside Bangladesh
• Any foreign association or body which the NBR declares to be a company.

11. Tax Rates
Publicly Traded Companies
25%
Non-Listed Companies
35%
50% of export income is exempt from tax

12. Tax Rates
Publicly Listed- Banks,
insurance and other
financial institutions
40%
Non Listed- Banks,
insurance and other
financial institutions
42.5%
Merchant Bank
37.5%

13. Tax Rates
Cigarette,
Zarda,
Bidi,
Gul or
Any other tobacco product manufacturing companies
45%

14. Tax Rates
Publicly Traded Mobile
phone operator companies
40%
Non-Listed Mobile phone
operator companies
45%
If mobile phone operator companies list at least 20% of their paid up capital through IPO, they
shall receive a rebate of 10% in the year of listing.

15. Reduced rates of Corporate Tax
Companies Tax Rate
Textile industries (time extended up to 30 June 2019) 15%
Jute industries (time extended up to assessment year 2019-2020) 10%
Knit wear and woven garments manufacturer and exporter 20%
Research Institutes at national level, registered under the Trust Act, 1882 or Societies
Registration Act, 1860
15%
Private Universities, Private medical college, Private dental college, Private
engineering college or Private college engaged in imparting education on information technology
15%
Co-operative society registered under Co-operative Society Act 2001 other than income
from agricultural or cottage sector
15%
Production of pelleted poultry feed, Production of pelleted feed for fish, shrimp and
cattle, Production of seeds marketing of locally produced seeds, cattle farming,
dairy farming, horticulture, frog farming, sericulture, mushroom farming and
floriculture:
 Income up to Tk 1,000,000
 Next Tk 2,000,000
 On the balance amount
3%
10%
15%

16. Reduced tax rates applicable to local authority
25%reduced tax rate will be applicable for
following local bodies:
• WASA (Dhaka, Chittagong, Khulna and
Rajshahi)
• Bangladesh Civil Aviation Authority
• RAJUK
• RDA
• KDA
• CDA
• National Housing Authority
• Chittagong Port Authority
• Mongla Port Authority
• Pyra Port Authority
• Bangladesh Inland Port Authority
• Bangladesh Television
• Bangladesh Betar
• BIWTA
• BRTA
• BTRC
• BPDP
• BREB
• BWAPDA
• BEPZA
• Bangladesh Bridge Authority
• Borendra Multipurpose Development
Authority (Rajshahi)
• Bangladesh Hi-Tech Park Authority
• IDRA
• Sustainable and Renewable Energy
Development Authority

17. Capital gains tax
Capital gain tax is levied when the investor sells a capital asset for a
price that is higher than the purchase price.
It is different from normal gain.
It only triggered when an asset is realized, not while it is held by an
investor

18. Capital gains tax
Capital gains tax on sale of shares of listed companies
Capital gain from transfer of stocks and shares of public limited companies listed with stock
exchange except listed Govt. securities.
Tax Rate
a) For resident companies and firms 10%
b) Capital gain tax of non-resident shareholders 15%
c) For sponsor shareholder and shareholder director 5%
d) For resident individual holding at least 10% of the total share
capital of the company
5%

19. Capital gains tax
Capital gains tax other than sale of shares of listed companies
Capital gain from transfer of stocks and shares of public limited companies listed with stock
exchange except listed Govt. securities.
In the case of a company,
 Income from capital gains will be separated from total income
 Tax at 15% is payable on such capital gains regardless of the period of holding of the
asset from the date of its acquisition.

20. Capital gains tax
In the case of an assessee other than a company,
If the asset is transferred before the expiry of five years from the date
of acquisition, the capital gains will be taxed at the usual rate
applicable to the assessee’s total income including the capital gains.
If the asset is transferred at any time after expiry of five years from
the date of its acquisition, the capital gains will be taxed at the usual
rate applicable to the assessee’s total income including the capital
gains or at the rate of 15% on the amount of capital gains whichever
of the two is lower.

21. Thank You…