Business under the Income Tax Act 2023 of Bangladesh

The Income Tax Act 2023 of Bangladesh has brought several changes to the taxation rules for businesses. Whether small, medium, or large enterprises, every business must now comply with clearer, stricter tax obligations. The goal of the updated Act is to enhance transparency, widen the tax net, and ensure that businesses contribute fairly to national development.

Definition of Business

Under the Income Tax Act 2023, the term "business" includes:

  • Trade and commerce
  • Manufacture or processing of goods
  • Banking and financial services
  • Construction activities
  • Provision of services of any nature
  • Adventure or concern in the nature of trade

This broad definition covers almost every profit-generating activity, whether done individually, through partnerships, companies, or other organizations.

Tax Rates for Businesses

The applicable tax rate depends on the type and size of the business:

  • Publicly listed companies: 20%
  • Non-listed companies: 27.5%
  • One Person Company (OPC): 22.5%
  • Small and medium enterprises (SMEs): Reduced rates if specific conditions are met (such as turnover limits and employment generation)

Export-oriented industries and green businesses can also enjoy tax holidays or reduced tax rates under specific government incentives.

Filing and Compliance Requirements

Every business must:

  • Obtain a Taxpayer Identification Number (TIN).
  • File an annual income tax return along with audited financial statements (if applicable).
  • Maintain proper books of accounts.
  • Deduct Tax Deducted at Source (TDS) where required and deposit it to the government.

Failure to comply with these rules can result in penalties, additional taxes, or even legal actions by the tax authority.

Special Provisions

Some important special provisions include:

  • Presumptive taxation: for small businesses, allowing simplified tax filing under certain thresholds.
  • Minimum Tax: provision: Even if a business makes no profit, it may still need to pay a minimum tax based on turnover.
  • Digital businesses: E-commerce, freelancing, and digital service providers are now officially included within the tax net.

Conclusion

The Income Tax Act 2023 marks a significant step towards modernizing Bangladesh's tax system. Businesses must now focus not only on growth but also on compliance. Proper tax planning, accurate record-keeping, and timely filing will not only help businesses avoid penalties but also contribute to building a stronger and more resilient economy.

DISCLAIMER:

The information contains in this web-site is prepared for educational purpose. This site may be used by the students, faculties, independent learners and the learned Tax Practitioners of all over the world. Researchers all over the world have the access to upload their writes up in this site. In consideration of the people's participation in the Web Page, the individual, group, organization, business, spectator, or other, does hereby release and forever discharge the EasyTax Solutions, and its officers, board, and employees, jointly and severally from any and all actions, causes of actions, claims and demands for, upon or by reason of any damage, loss or injury, which hereafter may be sustained by participating their work in the Web Page. This release extends and applies to, and also covers and includes, all unknown, unforeseen, unanticipated and unsuspected injuries, damages, loss and liability and the consequences thereof, as well as those now disclosed and known to exist. The provisions of any state's law providing substance that releases shall not extend to claims, demands, injuries, or damages which are known or unsuspected to exist at this time, to the person executing such release, are hereby expressly waived. However the EasyTax Solutions makes no warranty expressed or implied or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any information, apparatus, product or process disclosed or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product process or service by trade name, trade mark, manufacturer or otherwise, does not necessarily constitute or imply its endorsement, recommendation or favouring by the EasyTax Solutions. The views and opinions of the authors expressed in the Web site do not necessarily state or reflect those of the EasyTax Solutions. Above all, if there is any complaint drop by any independent user to the admin for any contents of this site, the EasyTax Solutions would remove this immediately from its site.

← Back to Articles