Corporate tax Rate in Bangladesh
Corporate tax in Bangladesh is governed by the Income Tax Act 2023, with specific rates updated annually through the Finance Act (or Finance Ordinance). As of January 2026, the current rates follow the Finance Ordinance 2025.
The corporate tax system differentiates between "Standard Rates" and "Conditional Rates" (reduced rates for companies that meet specific banking compliance requirements).
1. Corporate Tax Rates (AY 2025–2026 and AY 2026–2027)
| Company Category | AY 2025–26 (Conditional) | AY 2025–26 (Standard) | AY 2026–27 (Proposed) |
| Publicly Traded (>10% shares via IPO) | 20% | 22.50% | 20% |
| Publicly Traded (≤10% shares via IPO) | 22.50% | 25% | 25% |
| Non-Publicly Traded (Private Ltd.) | 25% | 27.50% | 27.50% |
| One Person Company (OPC) | 20% | 22.50% | 27.50% |
| Banks, Insurance & FIs (Listed) | 37.50% | 37.50% | 37.50% |
| Banks, Insurance & FIs (Non-listed) | 40% | 40% | 40% |
| Merchant Banks | 37.50% | 37.50% | 37.50% |
| Mobile Operators (Non-listed) | 45% | 45% | 45% |
| Tobacco Manufacturers | 45% + 2.5%* | 45% + 2.5%* | 45% + 2.5%* |
2. Mandatory Compliance for Reduced Rates
To enjoy the Conditional (Reduced) Rate, companies must satisfy the following requirements under the Income Tax Act 2023:
Income/Receipts: All income and receipts must be transacted through bank transfers.
Expenses/Investments: Any single transaction exceeding BDT 500,000 and annual transactions exceeding BDT 3,600,000 for expenses or investments must be made via bank transfer.
3. Sector-Specific Tax Exemptions & Special Rates
RMG Sector: 12% for general exporters; 10% for Green-certified (LEED) factories.
IT/Software (ITES): Many services are tax-exempt until June 2027, provided they maintain a valid tax exemption certificate from the NBR.
Education: Private universities and medical/engineering colleges are taxed at a flat 15%.
4. Minimum Tax (Gross Receipts)
Companies must pay a minimum tax even if they are in a loss position. This is calculated on Gross Receipts (total turnover):
General Companies: 0.6% (proposed to increase to 1% for some categories in 2026).
New Manufacturers: 0.1% (for the first 3 years of production).
Mobile Operators: 2% of gross receipts.
Tobacco Manufacturers: 3% of gross receipts.
5. Other Important Corporate Taxes
Capital Gains: Usually taxed at a flat rate of 15%.
Dividend Income: Generally taxed at 20% for companies.
IT Sector: Many IT-enabled services (ITES) are eligible for tax exemptions or reduced rates until June 2027, provided they maintain proper compliance.
Note: Bangladesh's tax laws are updated annually in the National Budget (usually in June). Ensure your company's audited financial statements align with the Income Tax Act 2023 to avoid penalties.
In summary, the corporate tax landscape in Bangladesh for the 2025-2026 assessment year reflects a strategic shift toward a more transparent and formalized economy. By offering a lower rate of 22.5% or even 20% to publicly traded companies that meet strict IPO and banking transaction conditions, the National Board of Revenue (NBR) is incentivizing corporate accountability and capital market growth. However, the standard rate of 27.5% for non-listed companies and the significant "floor" created by the 1.0% minimum tax on gross receipts ensure a stable revenue stream for the state. For businesses, the message is clear: the path to tax optimization lies in full compliance and digital financial integration.
Editing by-
Rajan Kumer Debnath
Income Tax and VAT Adviser
Member: Dhaka Taxes Bar Association
Chamber 01:House # 05 ( 2nd Floor), Road # 06 Cell: 01727-546514 | Chamber 02:1216, PressClub Road, Kharompattri Cell: 01727-546514 |
