The Financial Act 2019 Compressed

Important Changes Introduced
By
The Finance Act, 2019

Preface
This represents a brief summary of the important changes introduced by the Finance
Act, 2019, both in the fields of Direct and Indirect Taxes. As would be evident from the
summary, some of the existing provisions of law have been amended or rationalized.
Where a section is partially amended, the amended portion is shown in "Italic" font.
Our aim is to acquaint our clients and prospective investors, home and abroad, with
the latest provisions of law.
Table of Contents
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SECTION I : DIRECT TAX

1.00 Income Tax .............................................................................................................................................................. 01
1.01 Rates of income tax of individual (including non-resident Bangladeshi), Hindu
undivided family, partnership firm, an association of persons, fund, trust, NGO and
every other artificial juridical person (except business of cigarette, bidi, jorda, gul
and all tobacco products) are as follows:............................................................................................ 01
1.02 Changes in the rates of surcharge ........................................................................................................... 02
1.03 Corporate tax rates ............................................................................................................................................ 03
1.04 Changes in definition. [Section 2] ........................................................................................................... 04
1.04.01 Changes in definition of “perquisite”. [Section 2(45)] ............................................................. 04
1.04.02 Modification in definition of “resident”. [Section 2(55)] ........................................................ 04
1.04.03 Modification of definition of “royalty”. [Section 2 (56)] ......................................................... 05
1.05 Insertion of new section “Charge of tax on dividend”. [Section 16F] ........................... 05
1.06 Insertion of new section “Charge of tax on retained earnings, reserves, surplus
etc.”. [Section 16G] ............................................................................................................................ 06
1.07 Changes in deemed income. [Section 19] .......................................................................................... 06
1.07.01 Amendment of sub-section (8)................................................................................................................... 06
1.07.02 Modification of sub-section (21)................................................................................................................ 06
1.07.03 Insertion of new sub-section (22A).......................................................................................................... 07
1.07.04 Modification in sub-section (31)................................................................................................................ 07
1.07.05 Insertion of new sub-section (32)............................................................................................................. 08
1.08 Replacement of “Special tax treatment in respect of investment in residential
building, apartment”. [Section 19BBBBB] ......................................................................................... 08
1.09 Insertion of new section “Special tax treatment in respect of investment in
Economic Zone or Hi-Tech Parks”. [Section 19DD] .................................................................. 10
1.10 Change in deduction not admissible in certain circumstances. [Section 30] ........... 10
1.11 Insertion of new section “Treatment of disallowance”. [Section 30B] ......................... 10
1.12 Changes in Computation of capital gains. [Section 32] ........................................................... 10
1.13 Changes in income from other sources. [Section 33] ................................................................ 10
1.14 Changes in investment tax credit. [Section 44] .............................................................................. 11
1.15 Insertion of new section “Exemption from tax of newly established industrial
undertakings set up between the period of July, 2019 and June, 2024, etc. in certain
cases”. [Section 46BB] ...................................................................................................................................... 11
1.16 Insertion of new section “Exemption from tax of newly established physical
infrastructure facility set up between the period of July, 2019 and June, 2024, etc.
in certain cases”. [Section 46CC] .............................................................................................................. 16
1.17 Changes in tax deduction at source (TDS) ....................................................................................... 19
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1.17.01 Deduction from payment to contractors, etc. [Section 52] .................................................... 19
1.17.02 Deduction from the payment of certain services. [Section 52AA] .................................. 20
1.17.03 Deduction at source from interest on saving instruments. [Section 52D] ................. 22
1.17.04 Collection of tax from brick manufacturers. [Section 52F] ................................................... 23
1.17.05 Amendment of “Collection of tax by City Corporation or Paurashava at the time
of renewal of trade license”. [Section 52K] ...................................................................................... 23
1.17.06 Replacement of “Deduction of tax for services from convention hall, conference
Centre, etc.“. [Section 52P] ........................................................................................................................... 23
1.17.07 Replacement of “Deduction at source from house property”. [Section 53A] ......... 24
1.17.08 Modification in “Deduction of tax at source from export cash subsidy”.
[Section 53DDD] .................................................................................................................................................. 24
1.17.09 Changes in “Deduction at source from fees, etc. of surveyors of general insurance
company”. [Section 53GG] ........................................................................................................................... 24
1.17.10 Replacement in “Deduction at source from rental value of vacant land or plant
or machinery”. [Section 53J] ....................................................................................................................... 25
1.17.11 Changes in “Deduction of tax from dividends”. [Section 54] ............................................ 25
1.17.12 Deduction from income of non-residents. [Section 56] ........................................................... 25
1.18 Modification in “Advance payment of tax”. [Section 64] ...................................................... 26
1.19 Change in return of income. [Section 75] .......................................................................................... 26
1.20 Change in return of withholding tax. [Section 75A] ................................................................. 26
1.21 Change in audit of the return of withholding tax. [Section 75AA] ................................ 26
1.22 Changes in Universal Self-Assessment. [Section 82BB] .......................................................... 26
1.23 Modification in “Minimum tax”. [Section 82C] ............................................................................ 27
1.24 Amendment in Tax, etc. escaping payment. [Section 93] ...................................................... 30
1.25 Amendment in “Definition of Transfer Pricing”. [Section 107A] .................................... 31
1.26 Insertion of new sub-section in “Computation of arm’s length price”. [Section 107C] .. 31
1.27 Changes in “Reference to Transfer Pricing Officer”. [Section 107D] ............................ 31
1.28 Changes in “Punishment for false statement in verification, etc.”. [Section 165] .... 32
1.29 Changes in “Punishment for unauthorized employment”. [Section 165C] ............. 32
1.30 Changes in “Requirement of twelve-digit Taxpayer’s Identification Number in
certain cases”. [section 184A] ..................................................................................................................... 32
1.31 Insertion of “Requirement of mentioning Twelve-digit Taxpayer’s Identification
Number in certain documents”. [Section 184CC] ....................................................................... 32
1.32 Change in the Second Schedule ............................................................................................................... 33
1.33 Changes in Part A of Sixth Schedule...................................................................................................... 33
1.33.01 Modification in paragraph 1........................................................................................................................
33
1.33.02 Replacement of paragraph 11A................................................................................................................. 33
1.33.03 Modification in paragraph 34..................................................................................................................... 33
1.33.04 Modification in paragraph 35, 39, 44 and 45.................................................................................... 33
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1.33.05 Modification in paragraph 59..................................................................................................................... 34

1.33.06 Modification in paragraph 60...................................................................................................................... 34
1.34 Changes in Part B of Sixth Schedule...................................................................................................... 34
1.35 Changes in “Deduction of tax from payment to contractors, etc.”. [Rule 16] ........ 34
1.36 Changes in “Collection of tax from importers“. [Rule 17A] ................................................ 35
1.37 Changes in form of return of income. [Rule 24] ........................................................................... 36
1.38 Changes in recognition of association of accounts, registration of income tax
practitioners etc. by Board. [Rule 37] ................................................................................................... 37
SECTION II: INDIRECT TAXES

2.00 Value Added Tax & Supplementary Duty ............................................................................. 40
2.01 Implementation of the Value Added Tax & Supplementary Duty (SD) Act, 2012 .......... 40
2.02 VAT Registration and Turnover Tax Enlistment ......................................................................... 40
2.02.01 Threshold for turnover tax enlistment. [Section 2(48)] ............................................................ 40
2.02.02 Threshold for VAT registration. [Section 2(57)] ........................................................................... 40
2.02.03 Mandatory VAT registration. [Section 4 (2)] ................................................................................... 40
2.02.04 Central or unit registration. [Section 5] ............................................................................................... 45
2.02.05 Voluntary VAT registration. [Section 8] ............................................................................................. 45
2.02.06 Mandatory keeping books and records through software ................................................... 45
2.03 Imposition of VAT ............................................................................................................................................. 45
2.03.01 Insertion of new schedule for reduce rate goods or services .............................................. 46
2.03.02 VAT agent of non-resident. [Section 19] ............................................................................................ 47
2.04 Zero-rated supplies. [Section 21] ............................................................................................................. 47
2.05 Manner of VAT collection. [Chapter 4] ............................................................................................... 47
2.06 Advance Trade VAT. [Section 31] .......................................................................................................... 47
2.07 Determination of value of the taxable supply. [Section 32] ................................................. 47
2.08 Payment of VAT. [Section 33] .................................................................................................................... 48
2.09 Progressive or periodic supplies. [Section 34] ............................................................................... 48
2.10 Sale of an establishment as a going concern. [Section 36] ..................................................... 48
2.11 Input tax credit. [Section 46] ....................................................................................................................... 48
2.11.01 Adjustment of closing balance lying with Account Current Register (Mushak-18)
under Value Added Tax Act, 1991. [Rule 118] .............................................................................. 50
2.12 Withholding VAT. [Section 49] ................................................................................................................ 51
2.12.01 Definition of withholding entity .............................................................................................................. 51
2.12.02 Rate of withholding VAT .............................................................................................................................. 51
2.12.03 Applicability of withholding VAT ......................................................................................................... 51
2. 13 Documentation ..................................................................................................................................................... 52
2. 14 Imposition and collection of turnover tax. [Section-63] ......................................................... 52
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2. 15 Carry forward and refund of negative net amount. [Section-68] .................................... 52

2.16 Exemption on specific goods and services by SROs ................................................................. 52
2.16.01 Exemption to investors of high-tech parks ...................................................................................... 52
2.16.02 Exemption to Ruppur Nuclear Power Plant ................................................................................... 53
2.16.03 Exemption to investor organizations of private-public partnership ............................. 53
2.16.04 Exemption to investor of BEZA ............................................................................................................... 53
2.16. 05 Exemption to export oriented entity ..................................................................................................... 53
2.16.06 Exemption to 100% export oriented and EPZ entities ............................................................. 54
2.16.07 Exemption to some specific industries ................................................................................................ 54
2.16.08 Exemption to foreign mission ................................................................................................................... 55
2.17 VAT implication in transitional period .............................................................................................. 55
2.17.01 Implication in registration ........................................................................................................................... 56
2.17.02 Implication on rebate and current account ...................................................................................... 56
2.17.03 Treatment for Price declaration ................................................................................................................ 57
2.17.04 Withholding VAT ............................................................................................................................................... 57
2.17.05 Goods supplied at a uniform price ........................................................................................................ 57
2.17.06 Settlement of VAT disputes (Appeal) .................................................................................................. 58
2.17.07 Construction Contractor ................................................................................................................................ 58
2.17.08 Duty drawback claimed to Duty Exemption and Drawback Officer (DEDO) ....... 58
3.00 Customs Duties ........................................................................................................................ 61

3.01 Changes in definition ....................................................................................................................................... 61
3.01.01 Replaced of definition of “export manifest” ................................................................................... 61
3.01.02 Replaced of definition of “import manifest” .................................................................................. 61
3.02 Modification of Section 43 ............................................................................................................................. 61
3.03 Modification of Section 44 ............................................................................................................................ 61
3.04 Modification of Section 98 ............................................................................................................................ 61
3.05 Replacement of “Customs Control and Risk Management”. [Section 197A] .......... 61
3.06 Insertion of new section “Non-intrusive inspection”. [Section 197B] ........................... 62
3.07 Insertion of new section “specialized function unit”. [Section 197B] ........................... 62
3.08 Duty exemption on capital machinery ................................................................................................ 62
Section-I
DIRECT TAX
INCOME TAX
1.00 Income Tax
1.01 Rates of income tax of individual (including non-resident Bangladeshi), Hindu
undivided family, partnership firm, an association of persons, fund, trust, NGO
and every other artificial juridical person (except business of cigarette, bidi, jorda,
gul and all tobacco products) are as follows
Assessment year 2019-2020 Assessment Year 2018-2019
Annual income Income tax rate Annual income Income tax rate
First Tk. 2,50,000 Nil First Tk. 2,50,000 Nil
Next Tk. 4,00,000 10% Next Tk. 4,00,000 10%
Next Tk. 5,00,000 15% Next Tk. 5,00,000 15%
Next Tk. 6,00,000 20% Next Tk. 6,00,000 20%
Next Tk. 30,00,000 25% Next Tk. 30,00,000 25%
Balance amount 30% Balance amount 30%
Rates of income tax mentioned above for the assessment year 2019-2020 was same
as that of the assessment year 2018-2019.
For an individual who is a non-resident (not non-resident Bangladeshi), the rate of
income tax would be 30% on his total income as before.
Tax-free limit of income of all female taxpayers, senior male taxpayers aging 65 years
and above is Tk. 3,00,000. Tax free limit of individuals with disability is Tk. 4,00,000
and that of gazetted war-wounded freedom fighters is Tk. 4,25,000. Tax-limit of
income of the parents or legal guardian of the person with disability will be Tk.
50,000 higher (for each child with disability). Only one of the parents can avail the
benefit. Any person registered under section 31 of the Persons with Disabilities
Rights and Protection Act, 2013 would be considered as ‘person with disability’.
Minimum tax for any individual category of taxpayer has been kept the same as the
one in previous year which is shown below:
Sl. No. Location of taxpayer Minimum tax (Taka)
1 Dhaka North City Corporation, Dhaka South City 5,000

Corporation and Chittagong City Corporation
2 Other City Corporations 4,000
3 Areas other than City Corporation 3,000
If an individual taxpayer is the owner of small and cottage industry and is engaged
in manufacturing in less or least developed area, he/she shall get tax rebate at the
following rates:
Particulars Rate of rebate
Where in the concerned year the 5% of income tax payable on income

volume of production is between 15% to from the small and cottage industry
25% more than that of the previous year
Where in the concerned year the 10% of income tax payable on income
volume of production is more than 25% from the small and cottage industry
above of that of the previous year
Important Changes Introduced by The Finance Act, 2019 Page | 01

Less and least developed areas have been defined in clauses (b) and (c) of sub-section (2A)
of section 45 which are as follows:
(b) if the undertaking is set up in such areas as the Board may, by notification in the official
Gazette, specify to be "Least Developed Areas", for a period of nine years beginning
with the month of commencement of commercial production of the undertaking;
(c) if the undertaking is set up in such areas as the Board may, by notification in the official
Gazette, specify to be "Less Developed Areas", for a period of seven years beginning
with the month of commencement of commercial production of the undertaking.
1.02 Changes in the rates of surcharge
Individuals having net wealth above Tk. 3 crore has to pay surcharge at the
following rates on their net tax payable:
Assessment Year 2019-2020 Assessment Year 2018-2019
Total net worth Rate Total net worth Rate
Up to Tk. 3 crore Nil Up to Tk. 2.25 crore Nil
More than Tk. 3 crore but not more More than Tk. 2.25 crore but not
than Tk. 5 crore; more than Tk. 5 crore;
Or, taxpayer having more than 01 Or, taxpayer having more than 01
motor vehicles in his/her own name; 10% motor vehicles in his/her own name; 10%
Or, taxpayer having house Or, taxpayer having house
property in city corporation property in city corporation
measuring more than 8,000 square feet measuring more than 8,000 square feet
More than Tk. 5 crore but not more 15% More than Tk. 5 crore but not more 15%
than Tk. 10 crore than Tk. 10 crore
More than Tk. 10 crore but not 20% More than Tk. 10 crore but not 20%
more than Tk. 15 crore more than Tk. 15 crore
More than Tk. 15 crore but not 25% More than Tk. 15 crore but not 25%
more than Tk. 20 crore more than Tk. 20 crore
More than Tk. 20 crore 30% More than Tk. 20 crore 30%
Minimum surcharge, if applicable, for individual taxpayer having net wealth more
than Tk. 3 crore but not more than Tk. 10 crore or taxpayer owning more than 01
motor vehicles or taxpayer having house property in city corporation measuring
more than 8,000 square feet will be Tk. 3,000 for the assessment year 2019-2020 and
for the individual taxpayer having net wealth over Tk. 10 crore the minimum
surcharge has been kept same at Tk. 5,000 for the assessment year 2019-2020 as in
the assessment year 2018-2019. For assessees having net wealth more than Tk. 50
crore, minimum surcharge will be higher of 0.1% of net worth or 30% of tax
payable on total taxable income
Notes:
(1) net worth means the demonstrable total net worth, which will be shown in the
statement of assets, liabilities, and expenses according to section 80 of Income Tax
Ordinance, 1984 and (2) motor vehicles mean the private car, zip or microbus.
Manufacturers of cigarette, bidi, jorda, gul and all other tobacco products shall pay
2.5% surcharge on the income earned from the said business.
Page | 02 Important Changes Introduced by The Finance Act, 2019
1.03 Corporate tax rates
A brief picture of the corporate tax rates applicable for the assessment years
2019-2020 and 2018-2019 is shown in the table below:
Assessment Year
Sl. No. Particulars
2019-2020 2018-2019
Publicly traded companies (except banks, insurance companies,
a. financial institutions, merchant banks, mobile phone operators 25% 25%
and tobacco-based product manufacturing companies)
Non-listed companies including branch offices (except banks,
insurance companies, financial institutions, merchant banks, 35% 35%
b. mobile phone operators and tobacco-based product
manufacturing companies) *
i) Mobile phone operator companies (not publicly traded) * 45% 45%
c. ii) Mobile phone operator companies (publicly traded by

transfer of 10% share of paid-up capital through stock exchange 40% 40%
of which maximum 5% must be through pre-initial public
offering)
Banks, insurance companies, financial institutions (except
d. 37.5% 37.5%
merchant banks) which are publicly traded or approved by the
Government in the year 2013
e. Not publicly traded banks, insurance companies, financial 40% 40%

institutions (except merchant banks)
f. Merchant banks 37.5% 37.5%
g. Manufacturing companies of cigarette, bidi, jorda, gul and all 45%

45%
tobacco products
Any person other than companies engaged in manufacturing of
h. 45% 45%
cigarette, bidi, jorda, gul and all tobacco products
i. Any dividend received from a company 20% 20%
j. A Co-operative society registered under the Co-operative

15% 15%
Society Act, 2001
k. Manufacturer & exporter of Knitwear and Woven Garments ** 12% (10% for 12% (10% for
factories having factories having
‘Green Building ‘Green Building
Certification’) Certification’)
Manufacturer of yarn related to production of fabrics, (dying,
l. finishing & conning of yarn), (Manufacturing, dying, finishing 15% 15%
& printing of fabrics or engagement in any other activity in
similar nature) ***
m. Manufacturer of Jute Products **** 10% 10%
*Non-listed companies will receive rebate of 10% in the year of listing if they list at
least 20% of their paid-up capital through initial public offering.
** Vide SRO No. 217-Law/Income Tax/2019 dated 23 June 2019.
*** Vide SRO No. 218-Law/Income Tax/2019 dated 23 June 2019.
**** Vide SRO No. 258-Law/Income Tax/2016 dated 10 August 2016.
• School, College, University and NGO would be subject to excess income tax of
5%, if special arrangement facilitating the disabled persons was not made.
• If an assessee appoints minimum 10% physically handicraft individual of total
employee as an appointment authority then such assessee shall get 5% tax
rebate on income tax payable.
1.04 Changes in definition. [Section 2]
1.04.01 Changes in definition of “perquisite”. [Section 2(45)]
The words “not exceeding ten percent of disclosed profit of relevant income year” and
“or leave fair assistance” have been omitted. The amended version of this clause is
as follows:
“perquisite” means-
(i) any payment made to an employee by an employer in the form of cash or in
any other form excluding basic salary, festival bonus, incentive bonus, arrear
salary, advance salary, leave encashment and over time, and
(ii) any benefit, whether convertible into money or not, provided to an employee
by an employer, called by whatever name, other than contribution to a
recognized provident fund, approved pension fund, approved gratuity fund
and approved superannuation fund.
1.04.02 Modification in definition of “resident”. [Section 2(55)]
New sub-clauses (d) & (e) have been inserted after sub (c). Amended section 2
(55) stands as follows:
“resident”, in respect of any income year, means –
(a) an individual who has been in Bangladesh –
(i) for a period of, or for periods amounting in all to, one hundred and eighty
two days or more in that year; or
(ii) for a period of, or periods amounting in all to, ninety days or more in that
year having previously been in Bangladesh for a period of, or periods
amounting in all to, three hundred and sixty-five days or more during four
years preceding that year;
(b) a Hindu undivided family, firm or other association of persons, the control
and management of whose affairs is situated wholly or partly in Bangladesh
in that year;
(c) a Bangladeshi company or any other company the control and management
of whose affairs is situated wholly in Bangladesh in that year;
(d) a trust, a fund or an entity, the control and management of whose affairs is situated

wholly in Bangladesh in that year; and
(e) a local authority and every other artificial juridical person;
1.04.03 Modification of definition of “royalty”. [Section 2 (56)]
New explanations have been inserted at the end of this clause. The amended
version of this clause is as follows:
“royalty” means consideration (including any lump sum consideration but
excluding any consideration which is classifiable as income of the recipient under
the head “Capital gains”) for-
(a) transfer of all or any rights, including the granting of a license in respect of a
patent, invention, model, design, secret process or formula, or trade mark or
similar property;
(b) the imparting of any information concerning the working of, or the use of, a
patent, invention, model, design, secret process or formula, or trade mark or
similar property;
(c) the use of any patent, invention, model, design, secret process or formula, or
trade mark or similar property;
(d) the imparting of any information concerning technical, industrial,
commercial, or scientific knowledge, experience or skill;
(e) the transfer of all or any rights, including granting of a license, in respect of
any copyright, literary, artistic or scientific work, including films or video
tapes for use in connection with television or tapes for use in connection with
radio broadcasting, but not including consideration for sale, distribution or
exhibition of cinematograph films; or
(f) the rendering of any services in connection with any of the aforesaid
activities;
Explanation 1.- For the purpose of royalty in respect of any right, property or
information, it is not necessary that-
(i) the possession or control of such right, property or information is with the payer;
(ii) such right, property or information is used directly by the payer;
(iii) the location of such right, property or information is in Bangladesh.
Explanation 2.- For the removal of doubts, it is hereby clarified that the expression
“process” includes transmission by satellite (including up-linking, amplification,
conversion for down-linking of any signal), cable, optical fibre or by any other similar
technology, whether or not such process is secret;
1.05 Insertion of new section “Charge of tax on dividend”. [Section 16F]
The newly inserted section is as follows:
Notwithstanding anything contained in this Ordinance or any other law for the time
being in force, if in an income year, the amount of stock dividend declared or distributed
exceeds the amount of cash dividend declared or distributed or without declaration or
distribution of any cash divided by a company registered under †Kv¤úvbx AvBb, 1994 (1994
m‡bi 18 bs AvBb) and listed to any stock exchange, tax shall be payable at the rate of ten per
cent on the whole amount of stock dividend declared or distributed in that income year.
1.06 Insertion of new section “Charge of tax on retained earnings, reserves, surplus
etc.”. [Section 16G]
Notwithstanding anything contained in this Ordinance or any other law for the time
being in force, if in an income year, the total amount transferred to retained earnings or
any fund, reserves or surplus, called by whatever name, by a company registered under
†Kv¤úvbx AvBb, 1994 (1994 m‡bi 18 bs AvBb) and listed to any stock exchange exceeds seventy
per cent of the net income after tax, tax shall be payable at the rate of ten per cent on the
total amount so transferred in that income year.
1.07 Changes in deemed income. [Section 19]
1.07.01 Amendment of sub-section (8).
The words “or stocks and shares” have been omitted. The amended version of
this sub-section is as follows:
Where any assets, not being stock in trade are purchased by an assessee from any
company and the Deputy Commissioner of Taxes has reason to believe that the
price paid by the assessee is less than the fair market value thereof the difference
between the price so paid and the fair market value shall be deemed to be income
of the assessee classifiable under the head “Income from other sources”.
1.07.02 Modification of sub-section (21).
The words “advance or deposit of any kind called by whatever name” have been added
after the word loan. The amended version of this sub-section is as follows:
Where any sum is claimed or shown to have been received as loan, advance or
deposit of any kind called by whatever name or gift by an assessee otherwise than by a
bank transfer, the amount so received shall be deemed to be the income of such
assessee for the income year in which such loan, advance or deposit of any kind called
by whatever name or gift was received, and shall be classifiable under the head
“Income from other sources”:
Provided that-
(a) where a loan or part thereof, which was deemed as the income under this
sub-section and included in the total income of the Assessee, is repaid or
converted into consideration for any goods or services in a subsequent income year,
the amount so repaid or converted into consideration for any goods or services shall
be deducted in computing the income of the Assessee for that income year;
(b) a loan shall not be deemed to be an income under this clause if the loan is taken
from a banking company or a financial institution;
(c) a loan or a gift received by an assessee, being an individual, shall not be deemed
to be the income under this sub-section, if-
(i) the aggregate amount of such loan or gift received in an income year does not
exceed five lakh taka; or
(ii) the loan or the gift is received from spouse or parents of the assessee, and a
banking channel or a formal channel is involved in the process of such loan
or gift.
Explanation.- In this sub-section, “bank transfer”, in relation to a loan or a gift,
means transfer from the account of the giver to the account of the receiver, and
such accounts are maintained in a bank or a financial institution legally
authorized to operate accounts.
1.07.03 Insertion of new sub-section (22A).
The newly inserted sub-section is as follows:
Where an assessee, being the owner of a house property, received, from any person to
whom such house property or any part thereof is let out, any amount exceeding taka 2
lakh other than bank transfer which is adjustable against the rent receivable, the amount
shall be deemed to be the “Income from house property” of the assessee for the income year
in which it is received:
Provided that where such amount is received through bank transfer, the amount shall
be adjusted within five years after the year of receipt or the period of agreement whichever
is lower, if after the expiry of the aforesaid period such amount or any part thereof remains
unadjusted, the amount remained so unadjusted shall be deemed to be the “Income from
house property” of the assessee in the income year in which such amount remains
unadjusted.
Explanation.- In this sub-section, “bank transfer” means transfer from the account of
the giver to the account of the receiver, and such accounts are maintained in a bank or
financial institution legally authorised to operate accounts.
1.07.04 Modification in sub-section (31).
New explanation has been inserted at the end of this sub-section. The amended
version of this sub-section is as follows:
Where an assessee files a revised return or an amended return under sections 78,
82BB or 93 and shows in such revised return or amended return any income that
is subject to tax exemption or a reduced tax rate or any income derived from the
sources mentioned in paragraph 33 of Part A of the Sixth Schedule, so much of such
income as exceeds the amount shown in the original return shall be deemed to be
income of the assessee for that income year classifiable under the head "Income
from other sources.
Explanation. - For the purpose of this sub-section income that is subject to tax exemption
or a reduced tax rate does not include the exclusions from total income as mentioned in
Part A of the Sixth Schedule;
1.07.05 Insertion of new sub-section (32).
The newly inserted sub-section is as follows:
Where any payment made for acquiring any asset or constitutes any asset and tax has not
been deducted therefrom in accordance with Chapter VII, such payment shall be deemed
to be the income of the person responsible for making the payment under this Ordinance
and classifiable under the head “Income from other source” in the income year in which
the payment was made.
1.08 Replacement of “Special tax treatment in respect of investment in residential
building, apartment”. [Section 19BBBBB]
The replaced section is as follows:
(1) Notwithstanding anything contained in this Ordinance, source of any sum invested by
any person, in the construction or purchase of any residential building or apartment, shall
be deemed to have been explained if the assessee pays, before the assessment for the
relevant assessment year in which the investment is completed, tax at the following rate –
(a) for building, apartment situated in the area of Gulshan Model Town, Banani,
Baridhara, Motijheel Commercial Area and Dilkusha Commercial Area of Dhaka-
(i) taka four thousand per square meter in the case of a building or an apartment the
plinth area of which does not exceed two hundred square meter;
(ii) taka five thousand per square meter in the case of a building or an apartment the
plinth area of which exceeds two hundred square meter;
(b) for building or apartment situated in the area of Dhanmandi Residential Area,
Defence Officers Housing Society (DOHS), Mahakhali, Lalmatia Housing Society,
Uttara Model Town, Bashundhara Residential Area, Dhaka Cantonment, Kawran
Bazar, Bijaynagar, Segunbagicha, Nikunja of Dhaka, and Panchlaish, Khulshi,
Agrabad and Nasirabad Area of Chattogram-
(i) taka three thousand per square meter in the case of a building or an apartment the
plinth area of which does not exceed two hundred square meter;
(ii) taka three thousand and five hundred per square meter in the case of a building or
an apartment the plinth area of which exceeds two hundred square meter;
(c) for building or apartment situated in the area of any City Corporation other than
areas mentioned in clauses (a) or (b)-
(i) taka eight hundred per square meter in the case of a building or an apartment the
plinth area of which does not exceed one hundred and twenty square meter;
(ii) taka one thousand per square meter in the case of a building or an apartment the
plinth area of which exceeds one hundred and twenty square meter but does not
exceed two hundred square meter;
(iii) taka one thousand and five hundred per square meter in the case of a building or
an apartment the plinth area of which exceeds two hundred square meter;
(d) for building or apartment situated in the area of a Paurasabha of any district
headquarters-
(i) taka three hundred per square meter in the case of a building or an apartment the
(ii) taka five hundred per square meter in the case of a building or an apartment the
(iii) taka seven hundred per square meter in the case of a building or an apartment the
(e) for building or apartment situated in the area other than the areas mentioned in
clauses (a) to (d)-
(i) taka two hundred per square meter in the case of a building or an apartment the
(ii) taka three hundred per square meter in the case of a building or an apartment the
(iii) taka five hundred per square meter in the case of a building or an apartment the
(2) The rate of tax mentioned in sub-section (1) shall be twenty per cent higher in case where
the assessee already owns a building or an apartment in any City Corporation before such
investment is completed; or the assessee makes such investment in two or more buildings
or apartments.
(3) The rate of tax mentioned in sub-section (1) shall be one hundred per cent higher in case,
where-
(a) a notice under section 93 has been issued before submission of such return of income
for the reason that any income, asset or expenditure has been concealed or any
income or a part thereof has escaped assessment;
(b) a notice under clause (f) of section 113 has been issued before submission of such
return of income;
(c) any proceeding under sections 164, 165 or 166 has been initiated before submission
of such return of income.
(4) The provision of this section shall not apply where the source of such investment, made by
the assessee for the construction or purchase of such residential building or apartment is-
(a) derived from any criminal activities under any other law for the time being in force;
or
(b) not derived from any legitimate source.

1.09 Insertion of new section “Special tax treatment in respect of investment in
Economic Zone or Hi-Tech Parks”. [Section 19DD]
The newly inserted section is follows:
Notwithstanding anything contained in this Ordinance or any other law for the time being
in force, no question shall be raised as to the source of any sum invested in any economic
zone declared under section 5 of evsjv‡`k A_©‰bwZK AÂj AvBb 2010 (2010 m‡bi 42 bs AvBb) or
in any hi-tech park declared under section 22 of evsjv‡`k nvB-‡UK cvK© KZ…©cÿ AvBb 2010 (2010
m‡bi 8 bs AvBb) for setting up industrial undertaking engaged in producing goods or
services therein within the period from the first day of July, 2019 and the thirtieth day of
June, 2024 (both days inclusive) by a company, if tax at the rate of ten per cent is paid on
the sum so invested before filing of the return for the concerned income year.
1.10 Change in deduction not admissible in certain circumstances. [Section 30]
The sub-clause (iii) of clause (f) has been omitted. The amended version of clause
(f) is as follows:
any expenditure in respect of the following as is in excess of the amount or rate
prescribed in this behalf and as is not, in the cases of sales and services liable to
excise duty, supported by excise stamp or seal, namely:-
(i) entertainment;
(ii) foreign travels of employees and their dependents for holidaying and
recreation;
(iii) omitted
(iv) distribution of free samples.
1.11 Insertion of new section “Treatment of disallowance”. [Section 30B]
Notwithstanding anything contained in section 82C or any loss or profit computed under
the head “Income from business or profession”, the amount of disallowances made under
section 30 shall be treated separately as “Income from business or profession” and the tax
shall be payable thereon at the regular rate.
1.12 Changes in computation of capital gains. [Section 32]
The words “capital asset” in sub-section (5) have been replaced as “plant,
machinery, equipment, motor vehicle, furniture, fixture, and computer”.
1.13 Changes in income from other sources. [Section 33]
Clause (d) has been modified. The modified version of section 33 is as follows:
The following income of an assessee shall be classified and computed under the
head “Income from other sources”, namely: -
(a) dividend and interest;

(b) royalties and fees for technical services;
(c) income from letting of machinery, plants or furniture belonging to the
assessee, and also of buildings belonging to him if the letting of buildings is
inseparable from the letting of the machinery, plant or furniture;
(d) any income to which section 19 (1), (2), (3), (4), (5), (8), (9), (10), (11), (12), (13),
(21), (24), (27), (29), (31) or (32);
(e) any other income of any kind or from any source which is not classifiable
under any of the other heads specified in section 20.
1.14 Changes in investment tax credit. [Section 44]
Table for investment tax credit in clause (b) of sub-section (2) has been replaced.
The replaced table is as follows:
Total Income Amount of credit

i. if the total income does not exceed taka 15% of the eligible amount;
fifteen lakh
ii. if the total income exceeds taka fifteen 10 % of the eligible amount;
lakh
1.15 Insertion of new section “Exemption from tax of newly established industrial
undertakings set up between the period of July, 2019 and June, 2024, etc. in
certain cases”. [Section 46BB]
(1) Subject to the provisions of this Ordinance, income, profits and gains under section 28
from an industrial undertaking (hereinafter referred to as the said undertaking) set-up
in Bangladesh between the first day of July, 2019 and the thirtieth day of June, 2024
(both days inclusive) shall be exempted from the tax payable under this Ordinance for
the period, and at the rate, specified below:
(i) if the said undertaking is set-up in Dhaka, Mymensingh and Chattogram divisions,
excluding Dhaka, Narayanganj, Gazipur, Chattogram, Rangamati, Bandarban and
Khagrachari districts, for a period of five years beginning with the month of
commencement of commercial production of the said undertaking:
Period of Exemption Rate of Exemption

For the first year 90% of income
For the second year 80% of income
For the third year 60% of income
For the fourth year 40% of income
For the fifth year 20% of income

(ii) if the said undertaking is set-up in Rajshahi, Khulna, Sylhet, Barishal and Rangpur
divisions (excluding City Corporation area) and Rangamati, Bandarban and
Khagrachari districts, for a period of ten years beginning with the month of
commencement of commercial production of the said undertaking:

For the first and second year 90% of income
For the sixth year 50% of income
For the seventh year 40% of income
For the eighth year 30% of income
For the ninth year 20% of income
For the tenth year 10% of income
Provided that any industry engaged in the production of item as referred to in clause
(viii) or clause (xii) of sub section (2) shall be entitled to exemption from tax under the
provision of this section even if it is set up in the districts of Dhaka, Gazipur,
Narayanganj or Chattogram.
(2) For the purpose of this section, "industrial undertaking" means-
(a) an industry engaged in, or in the production of-
(i) active pharmaceuticals ingredient and radio pharmaceuticals;
(ii) agriculture machineries;
(iii) automatic bricks;
(iv) automobile;
(v) barrier contraceptive and rubber latex;
(vi) basic components of electronics (e.g. resistor, capacitor, transistor, integrated
circuit, multilayer PCB etc.);
(vii) bi-cycle including parts thereof;
(viii) bio-fertilizer;
(ix) biotechnology based agro products;
(x) boiler including parts and equipment thereof;
(xi) compressor including parts thereof;
(xii) computer hardware;

(xiii) furniture
(xiv) home appliances (blender, rice cooker, microwave oven, electric oven, washing
machine, induction cooker, water filter etc.);
(xv) insecticides or pesticides;
(xvi) leather and leather goods;
(xvii) LED TV;
(xviii) locally produced fruits and vegetables processing;
(xix) mobile phone;
(xx) petro-chemicals;
(xxi) pharmaceuticals;
(xxii) plastic recycling;
(xxiii) textile machinery;
(xxiv) tissue grafting;
(xxv) toy manufacturing;
(xxvi) tyre manufacturing;
(b) any other category of industrial undertaking as the Government may, by notification
in the official Gazette, specify.
(3) Notwithstanding anything contained in sub-section (2), for the purpose of this section
industrial undertaking shall not include expansion of such an existing undertaking.
(4) The exemption under sub-section (1) shall apply to the said undertaking if it fulfils the
following conditions, namely: -
(a) that the said undertaking is owned and managed by-
(i) a body corporate established by or under any law for the time being in force with its
head office in Bangladesh; or
(ii) a company as defined in †Kv¤úvbx AvBb, 1994 (1994 m‡bi 18 bs AvBb) with its
registered office in Bangladesh and having a subscribed and paid up capital of not
less than two million taka on the date of commencement of commercial production;
(b) that thirty percent of the exempted income under sub-section (1) is invested in the
said undertaking or in any new industrial undertaking during the period of
exemption or within one year from the end of the period to which the exemption
under that sub-section relates and in addition to that, another ten percent of the
exempted income under sub-section (1) is invested in each year before the expiry of
three months from the end of the income year in the purchase of shares of a company
listed with any stock exchange, failing which the income so exempted shall,
notwithstanding the provisions of this Ordinance, be subject to tax in the assessment
year for which the exemption was allowed:

Provided that the quantum of investment referred to in this clause shall be reduced
by the amount of dividend, if any, declared by the company enjoying tax exemption
under this section
(c) that the said undertaking is not formed by splitting up or by reconstruction or
reconstitution of business already in existence or by transfer to a new business of
any machinery or plant used in business which was being carried on in Bangladesh
at any time before the commencement of the new business;
(d) that the said undertaking is approved, and during the relevant income year, stands
approved by the Board for the purposes of this section
(e) that application in the prescribed form for approval for the purposes of this section, as
verified in the prescribed manner, is made to the Board within six months from the
end of the month of commencement of commercial production;
(f) that the said undertaking obtained a clearance certificate for the relevant income year
from the Directorate of Environment;
(g) that the said undertaking maintains books of accounts on a regular basis and
submits return of its income as per provisions laid down in section 75 of this
Ordinance
(5) Notwithstanding anything contained in this section, where an undertaking enjoying
exemption of tax under this section is engaged in any commercial transaction with
another undertaking or company having one or more common sponsor directors, and
during the course of making an assessment of the said undertaking if the Deputy
Commissioner of Taxes is satisfied that the said undertaking has purchased or sold
goods at higher or lower price in comparison to the market price with intent to reduce
the income of another undertaking or company, the exemption of tax of that
undertaking shall be deemed to have been withdrawn for that assessment year in which
such transaction is made.
(6) The Board shall give its decision on an application made under clause (e) of
sub-section (4) within forty five days from the date of receipt of the application by the
Board, failing which the undertaking shall be deemed to have been approved by the
Board for the purposes of this section:
Provided that the Board shall not reject any application made under this section
unless the applicant is given a reasonable opportunity of being heard.
(7) The Board may, on an application of any person aggrieved by any decision or order
passed under sub-section (6), if the application is made within four months of the
receipt of such decision or order, review the previous decision, order or orders and pass
such order in relation thereto as it thinks fit.
(8) The income, profits and gains of the undertaking to which this section applies shall be
computed in the same manner as is applicable to income chargeable under the head

''Income from business or profession'':
Provided that in respect of depreciation, only the allowances for normal depreciation
specified in paragraph 3 of the Third Schedule shall be allowed.
(9) The income, profits and gains of the undertaking to which this section applies shall be
computed separately from other income, profits and gains of the assessee, if any, and
where the assessee sustains a loss from such undertaking it shall be carried forward
and set off against the profits and gains of the said undertaking for the next year and
where it cannot be wholly set off, the amount of the loss not so set off, shall be carried
forward for the following year and so on, but no loss shall be carried forward beyond
the period specified by the Board in the order issued under sub-section (6) or (7).
(10) Unless otherwise specified by the Government, nothing contained in this section
shall be so construed as to exempt the following from tax chargeable under this section,
namely-
(a) any dividend paid, credited or distributed or deemed to have been paid, credited or
distributed by a company to its share-holders out of the profits and gains;
(b) any income of the said undertaking classifiable as ''Capital gains'' chargeable under
the provisions of section 31;
(c) any income of the said undertaking resulting from disallowance made under
section 30.
(11) Where any exemption is allowed under this section and in the course of making
assessment, the Deputy Commissioner of Taxes is satisfied that any one or more of the
conditions specified in this section are not fulfilled or any individual not being a
Bangladeshi citizen is employed or allowed to work without prior approval of any
competent authority of the Government for this purpose, the exemption shall stand
withdrawn for the relevant assessment year and the Deputy Commissioner of Taxes
shall determine the tax payable for such year.
(12) Any such undertaking approved under this section may, not later than one year from
the date of approval, apply in writing to the Board for the cancellation of such
approval, and the Board may pass such order or orders thereon as it may deem fit.
(13) Notwithstanding anything contained in this section, the Board may, in the public
interest, cancel or suspend fully or partially any exemption allowed under this section.
(14) The Board may make rules regulating the procedure for the grant of approval under
sub-section (6), review under sub-section (7), furnish information regarding payment
of other taxes by the said undertaking, and take such other measures connected
therewith or incidental to the operation of this section as it may deem fit.
Explanation. - For the purpose of this section set-up means completion of establishment
of the industry referred to in this section.”

1.16 Insertion of new section “Exemption from tax of newly established physical
infrastructure facility set up between the period of July, 2019 and June, 2024,
etc. in certain cases”. [Section 46CC]
(1) Subject to the provisions of this Ordinance, income, profits and gains under section 28
from physical infrastructure facility, hereinafter referred to as the said facility, set up
in Bangladesh between the first day of July, 2019 and the thirtieth day of June, 2024
(both days inclusive) shall be exempted from the tax payable under this Ordinance for
ten years beginning with the month of commencement of commercial operation, and at
the rate, specified below:

For the first and second year 90% of income
For the sixth year 50% of income
For the seventh year 40% of income
For the eighth year 30% of income
For the ninth year 20% of income
For the tenth year 10% of income
(2) For the purpose of this section, "physical infrastructure facility" means,-
(i) deep sea port;
(ii) elevated expressway;
(iii) export processing zone;
(iv) flyover;
(v) gas pipe line
(vi) Hi-tech park;
(vii) Information and Communication Technology (ICT) village or software technology
zone;
(viii) Information Technology (IT) park
(ix) large water treatment plant and supply through pipe line;
(x) Liquefied Natural Gas (LNG) terminal and transmission line;
(xi) mobile phone tower or tower sharing infrastructure;

(xii) mono-rail;
(xiii) rapid transit;
(xiv) renewable energy (e.g. solar energy plant, windmill);
(xv) sea or river port;
(xvi) toll road or bridge;
(xvii) underground rail;
(xviii) waste treatment plant; or
(xix) any other category of physical infrastructure facility as the Government may, by
notification in the official Gazette, specify.
(3) The exemption under sub-section (1) shall apply to the said facility if it fulfils the
following conditions, namely:-
(a) that the said facility is owned and managed by-
(i) a body corporate established by or under any law for the time being in force with its
head office in Bangladesh; or
(ii) a company as defined in †Kv¤úvbx AvBb, 1994 (1994 m‡bi 18 bs AvBb) with its
registered office in Bangladesh and having a subscribed and paid up capital of not
21 less than two million taka on the date of commencement of commercial
operation;
(b) that thirty percent of the exempted income under sub-section (1) is invested in the
said facility or in any new physical infrastructure facility during the period of
exemption or within one year from the end of the period to which the exemption
under that sub-section relates and in addition to that, another ten percent of the
exempted income under sub-section (1) is invested in each year before the expiry of
three months from the end of the income year in the purchase of shares of a company
listed with any stock exchange, failing which the income so exempted shall,
notwithstanding the provisions of this Ordinance, be subject to tax in the assessment
year for which the exemption was allowed:
Provided that the quantum of investment referred to in this clause shall be reduced
by the amount of dividend, if any, declared by the company enjoying tax exemption
under this section;
(c) that the said facility is approved, and during the relevant income year, stands
approved by the Board for the purposes of this section;
(d) that application in the prescribed form for approval for the purposes of this section,
as verified in the prescribed manner, is made to the Board within six months from the
end of the month of commencement of commercial operation;
(e) that the said facility maintains books of accounts on a regular basis and submits
return of its income as per provisions of section 75 of this Ordinance.
(4) The Board shall give its decision on an application made under clause (d) of
sub-section (3) within forty five days from the date of receipt of the application by the
Board, failing which the facility shall be deemed to have been approved by the Board for
the purposes of this section:
Provided that the Board shall not reject any application made under this section
unless the applicant is given a reasonable opportunity of being heard
(5) The Board may, on an application of any person aggrieved by any decision or order
passed under sub-section (4), if the application is made within four months of the
receipt of such decision or order, review the previous decision, order or orders and pass
such order in relation thereto as it thinks fit.
(6) The income, profits and gains of the facility to which this section applies shall be
computed in the same manner as is applicable to income chargeable under the head
"Income from business or profession":
Provided that in respect of depreciation, only the allowances for normal

depreciation specified in paragraph 3 of the Third Schedule shall be allowed
(7) The income, profits and gains of the facility to which this section applies shall be
computed separately from other income, profits and gains of the assessee, if any, and
where the assessee sustains a loss from such facility, it shall be carried forward and set
off against the profits and gains of the said facility for the next year and where it
cannot be wholly set off, the amount of the loss not so set off, shall be carried forward
for the following year and so on, but no loss shall be carried forward beyond the period
specified by the Board in the order issued under sub-section (4) or (5).
(8) Unless otherwise specified by the Government, nothing contained in this section shall
be so construed as to exempt the following from tax chargeable under this section,
namely-
(a) any dividend paid, credited or distributed or deemed to have been paid, credited or
distributed by a company to its share-holders out of the profits and gains;
(b) any income of the said facility classifiable as "Capital gains" chargeable under the
provisions of section 31;
(c) any income of the said facility resulting from disallowance made under section 30.
(9) Where any exemption is allowed under this section and in the course of making
assessment, the Deputy Commissioner of Taxes is satisfied that any one or more of the
conditions specified in this section are not fulfilled or any individual not being a
Bangladeshi citizen is employed or allowed to work without prior approval of any
competent authority of the Government for this purpose, the exemption shall stand
withdrawn for the relevant assessment year and the Deputy Commissioner of Taxes
shall determine the tax payable for such year.
(10) Any such facility approved under this section may, not later than one year from the

date of approval, apply in writing to the Board for the cancellation of such approval,
and the Board may pass such order or orders thereon as it may deem fit.
(11) Notwithstanding anything contained in this section, the Board may, in the public
interest, cancel or suspend fully or partially any exemption allowed under this section.
(12) The Board may make rules regulating the procedure for the grant of approval under
sub-section (4), review under sub-section (5), furnish information regarding payment
of other taxes by the said facility, and take such other measures connected therewith or
incidental to the operation of this section.”
1.17 Changes in tax deduction at source (TDS)
1.17.01 Deduction from payment to contractors, etc. [Section 52]
In sub-section (1), clause (d) has been inserted after proviso (c) and some other
amendments have been made in sub-section (2). The amended section is as
follows:
(1) Where any payment is to be made by a specified person to a resident on
account of-
(a) execution of a contract, other than a contract for providing or rendering a
service mentioned in any other section of Chapter VII;
(b) supply of goods;
(c) manufacture, process or conversion;
(d) printing, packaging or binding;
The person responsible for making the payment shall, at the time of making
such payment, deduct tax at such rate, not exceeding ten percent (10%) of the
base amount, as may be prescribed:
Provided that–
(a) the rate of tax shall be fifty percent (50%) higher if the payee does not have
the twelve-digit Taxpayer’s Identification Number at the time of making
the payment;
(b) Omitted;
(c) where any imported goods on which tax has been paid at source under
section 53 is supplied, tax at source on the said supply shall be B-A, where-
A= the amount of tax paid under section 53,
B= the amount of tax applicable under this section if no tax were paid under
section 53.
(d) where any goods on which tax has been paid at source under section 53E is
supplied, tax at source on the said supply shall be B-A, where-
A = the amount of tax paid under section 53E,
B = the amount of tax applicable under this section if no tax were paid under section 53E.
(2) In this section-
(a) the specified person means-
(i) the government, or any authority, corporation or body of the government,
including its units, the activities of which are authorized by any Act,
Ordinance, Order or instrument having the force of law in Bangladesh;
(ii) a project, program or activity where the Government has any financial or
operational involvement;
(iii) a joint venture or a consortium;
(iv) a company as defined in clause (20) of section 2 of this Ordinance;
(v) a co-operative bank;
(vi)a co-operative society;
(vii) a financial institution;
(viii) a Non-Government Organization registered with the NGO Affairs
Bureau or a Micro Credit Organisation having licence with Micro Credit
Regulatory Authority;
(ix) a school, a college, an institute or a university;
(x) a hospital, a clinic or a diagnostic center;
(xi) a trust or a fund;
(xii) a firm;
(xiia) an association of persons;
(xiii) a public-private partnership;
(xiv) a foreign contractor, a foreign enterprise or an association or a body
established outside Bangladesh; and
(xv) any artificial juridical person not mentioned above;
(b) “contract” includes a sub-contract, any subsequent contract, an agreement or
an arrangement, whether written or not;
(c) “base amount” means the higher of the-
(i) contract value; or
(ii) bill or invoice amount; or
(iii) payment;
(d) “payment” includes a transfer, a credit or an adjustment of payment.
1.17.02 Deduction from the payment of certain services. [Section 52AA]
New items “Courier service, packing and shifting service” have been added in
SL. No 3 and “wheeling charges for electricity transmission” have been inserted
after SL No. 13 of sub-section (1). The amended version of this section is follows:
(1) Where any payment is to be made by a specified person to a resident on
account of a service as mentioned in this section, the person responsible for
making the payment shall, at the time of making such payment, deduct
income tax at the rate specified in the Table below: -
Rate of deduction of tax
Where base Where base
Sl. No. Description of service and payment amount does amount
not exceed exceeds
Tk. 25 lakh Tk. 25 lakh
1. Advisory or consultancy service 10% 12%

2. Professional service, technical services fee, or technical 10% 12%
assistance fee
i. Catering service;
3.
ii. Cleaning Service;
iii. Collection and recovery service;
iv. Private security service;
v. Manpower supply service;
vi. Creative media service;
vii. Public relations service;
viii. Event management service;
ix. Training, workshop, etc. organization and
management service;
x. Courier service
xi. Packing and shifting service
xii. Any other service of similar nature
(a) on commission or fee 10% 12%
(b) on gross bill amount 1.5% 2%
Media buying agency service
4.
(a) on commission or fee 10% 12%
(b) on gross amount 0.5% 0.65%
5. Indenting commission 6% 8%
6. Meeting fees, training fees or honorarium 10% 12%
Mobile network operator, technical support service
7. provider or service delivery agents engaged in mobile 10% 12%
banking operations
8. Credit rating agency 10% 12%
9. Motor garage or workshop 6% 8%
10. Private container port or dockyard service 6% 8%
11. Shipping agency commission 6% 8%
12. Stevedoring/berth operation commission 10% 12%
13. Transport service, car rental or ride sharing service 3% 4%
13A. Wheeling charge for electricity transmission 4% 5%
14. Any other service which is not mentioned in Chapter VII
of this Ordinance and is not a service provided by any 10% 12%
bank, insurance or financial institutions

Provided that if the amount for services mentioned in SL No. 3 and 4 of the
Table shows both commission or fee and gross bill amount tax shall be the higher
amount between (i) and (ii) where-
(i) tax calculated on commission or fee applying the relevant rate in the
table; and
(ii) B x C x D, where-
B = Gross bill amount
C = 10% for Sl. 3 and 2.5% for Sl. 4, and
D = rate of tax applicable on commission or fee:
Provided further that the rate of tax shall be fifty percent (50%) higher if the
payee does not have a twelve-digit Taxpayer’s Identification Number at the time
of making the payment:
Provided further that where the Board, on an application made in this behalf,
gives certificate in writing that the person rendering such service is otherwise
exempted from tax under any provision of this Ordinance, the payment referred
to in this section shall be made without any deduction or with deduction at a
lesser rate for that income year.
(a) “specified person” shall have the same meaning as in clause (a) of
sub-section (2) of section 52;
(b) “contract” includes a sub-contract, any subsequent contract, an agreement or
an arrangement, whether written or not;
(c) “base amount” means the higher of the-
(i) contract value; or
(ii) bill or invoice amount; or
(iii) payment;
(d) “payment” includes a transfer, a credit or an adjustment of payment;
(e) “professional services” means-
(i) services rendered by a doctor;
(ii) services rendered by a person carrying on any profession or any other
services applying professional knowledge.
1.17.03 Deduction at source from interest on saving instruments. [Section 52D]
TDS on interest of savings instruments has been increased from 5% to 10%.

1.17.04 Collection of tax from brick manufacturers. [Section 52F]
This section has been replaced. The replaced section is follows:
Any person responsible for issuing or renewal of permission for the manufacture of bricks
shall not issue or renew such permission unless the application for issuance or renewal of
such permission is accompanied by a tax clearance certificate of the preceding assessment
year along with the receipt of the tax verified by the Deputy Commissioner of Taxes at the
following rates:
(a) taka forty five thousand for one section brick field;
(b) taka seventy thousand for one and half section brick field;
(c) taka ninety thousand for two section brick field;
(d) taka one lakh and fifty thousand for brick field producing bricks through automatic
machine
Explanation.- For the purpose of this section, the word "section" shall have the same
meaning as defined in †gŠmygx BUfvUv g~j¨ ms‡hvRb Ki wewagvjv, 2004|
1.17.05 Amendment of “Collection of tax by City Corporation or Paurashava at the
time of renewal of trade license”. [Section 52K]
The section is amended. The amended version of this section is below:
Any person responsible for renewal of trade license shall collect tax at the time of
such renewal of each trade license at the rate of –
(a) taka three thousand in Dhaka South City Corporation, Dhaka North City
Corporation or Chittagong City Corporation;
(b) taka two thousand in any othe city corporation;
(c) taka one thousand in any paurashava at any district headquarter;
(d) taka five hundred in any other paurashava.
1.17.06 Replacement of “Deduction of tax for services from convention hall,
conference Centre, etc.“. [Section 52P]
The section is replaced. The new version of the section is as follow:
(1) Where any payment is to be made by a specified person to any other person on
account of renting or using space of convention hall, conference centre, room or, as the
case may be, hall, hotel, community centre or any restaurant, shall deduct tax at the
rate of five per cent from the whole amount of the payment for the services thereof at
the time of making such payment to the payee:
Provided that no deduction shall be made when such amount is paid directly to
the Government.

(a) “specified person” shall have the same meaning as in clause (a) of sub-section (2) of
section 52;
(b) “payment” shall have the same meaning as in clause (d) of sub-section (2) of section 52.
1.17.07 Replacement of “Deduction at source from house property”. [Section 53A]
The section is replaced. The new version of this section is follows:
(1) Where any specified person is a tenant in respect of a house property or hotel
accommodation, the tenant shall deduct tax from the rent of such house property or
hotel accommodation at the rate of five per cent at the time of payment of such rent.
Explanation. - For the purpose of this section, "rent" means any payment, by
whatever name called, under any lease, tenancy or any other agreement or
arrangement for the use of any house property or hotel accommodation including any
furniture, fittings and the land appurtenant thereto.
(2) Where, after the assessment made for the relevant year, it is found that no tax was
payable by the owner of the house property or the amount of tax deducted is in excess
of the amount payable, the amount deducted shall be refunded, -
(a) if no tax was payable, in full; or
(b) if the amount deducted is in excess of the amount payable, to the extent of the excess
deduction to the owner of the house property.
(3) Where the Deputy Commissioner of Taxes, on an application made in this behalf, gives
a certificate in the prescribed form to an owner of house property that, to the best of his
belief, the owner is not likely to have any assessable income during the year or the
income is otherwise exempted from payment of income tax under any provision of this
Ordinance, payment referred to in sub-section (1) shall be made without any
deduction until the certificate is cancelled.
section 52;
(b) “payment” shall have the same meaning as in clause (d) of sub-section (2) of section 52.
1.17.08 Modification in “Deduction of tax at source from export cash subsidy”.
[Section 53DDD]
The rate of tax deduction tax at source on export cash subsidy has been increased
from 3% to 10%.
1.17.09 Changes in “Deduction at source from fees, etc. of surveyors of general
insurance company”. [Section 53GG]
Tax deduction at source on remuneration or fees for conducting any survey
regarding settlement of claim of a general insurance has been reduced from 15%
to 10%.
1.17.10 Replacement in “Deduction at source from rental value of vacant land or
plant or machinery”. [Section 53J]
The section is replaced. The new version of this section is below:
(1) Where any payment is to be made by a specified person to a resident on account of
renting or using any vacant land or plant or machinery, shall deduct tax at the rate of
five per cent from the whole amount of the payment at the time of making such
payment to the payee.
section 52;
(b) “payment” shall have the same meaning as in clause (d) of sub-section (2) of
section 52.
1.17.11 Changes in “Deduction of tax from dividends”. [Section 54]
The words “being resident in Bangladesh” in proviso of section 54 has been omitted.
1.17.12 Deduction from income of non-residents. [Section 56]
Column 2 of Sl. No. 24 of sub-section (1) has been replaced and Sl. No. 24A of
sub-section (1) has been newly inserted. Replaced and newly inserted particulars
and rate of tax are as follows:
24 Survey for coal, oil or gas exploration 5.25%
24A Fees, etc. of surveyors of general insurance company 20%
New proviso has been inserted after the sub-section (1). This new proviso stands
as follows:
Provided that when any capital gain arises from the transfer of any share of a company,
the person or the authority, as the case may be, responsible for effecting the transfer of
shares shall not give any effect in respect of such transfer if tax on such capital gain has
not been paid.
In sub-section (2), the words “may issue a certificate” has been replaced as “within
thirty days from the date of receipt of such application accompanied by all the documents
as required by the Board”. The amended new sub-section (2) is as follows:
(2) where, in respect of any payment under this section, the Board, on an
application made in this behalf, is satisfied that due to tax treaty or any other
reason the non-resident is not be liable to pay any tax in Bangladesh, or is
liable to pay tax at a reduced rate in Bangladesh, the Board may issue a
certificate within thirty days from the date of receipt of such application accompanied
by all the documents as required by the Board to the effect that the payment
referred to in sub-section (1) shall be made without any deduction or, in
applicable cases, with a deduction at the reduced rate as mentioned in the
certificate.

1.18 Modification in “advance payment of tax”. [Section 64]
Threshold limit for payment of advance income tax has been increased from Tk.
four lakh to Tk. six lakh of last assessed income of the assessee.
1.19 Change in return of income. [Section 75]
Sub-clause (x) and (xi) has been added after sub-clause (ix) of clause (c) of
sub-section (1).
The newly inserted sub-clauses are follows:
(x) a Micro Credit Organisation having license with Micro Credit Regulatory Authority;
or
(xi) a non-resident having permanent establishment in Bangladesh.
1.20 Change in return of withholding tax. [Section 75A]
The words “a Micro Credit Organisation having license with Micro Credit Regulatory
Authority, a private university, a private hospital, a clinic, a diagnostic centre, a firm or
an association of persons” has been added after word “Bureau” in sub-section (1) of
section 75A. The amended version of sub-section is follows:
Every person, being a company or a co-operative society or a non-government
organization registered with NGO Affairs Bureau, a Micro Credit Organisation
having license with Micro Credit Regulatory Authority, a private university, a private
hospital, a clinic, a diagnostic centre, a firm or an association of persons, shall file or
cause to be filed, with the Deputy commissioner of Taxes under whose
jurisdiction he is an assessee, a return of tax deducted or collected under the
provisions of Chapter VII of this Ordinance.
1.21 Change in audit of the return of withholding tax. [Section 75AA]
In sub-section (1), the word “Board” has been replaced as “commission”.
1.22 Changes in Universal Self-Assessment. [Section 82BB]
In sub-section (7), the words “except the return of income of a financial institution”
has been inserted after the words “amended return”. The amended version of this
sub-section (7) is follows:
(7) The Board or any authority subordinate to the Board, if so authorised by the
Board in this behalf, may select, in the manner to be determined by the Board,
a number of returns filed under sub-section (1) or of amended returns
accepted under clause (a) of sub-section (4) or of amended returns allowed
under sub-section (5), and refer the same to the Deputy Commissioner of
Taxes for the purpose of audit:
Provided that a return filed or an amended return accepted or allowed under
this section shall not be selected for audit where-

(a) such return or amended return except the return of income of a financial
institution shows at least fifteen percent (15%) higher total income than the
total income assessed in the immediately preceding assessment year; and
(b) such return or amended return-
(i) is accompanied by corroborative evidence in support of income exempted
from tax;
(ii) is accompanied by a copy of bank statement or account statement, as the
case may be, in support of any sum or aggregate of sums of loan
exceeding taka five lakh taken other than from a bank or financial
institution;
(iii) does not show the receipt of gift during the year;
(iv) does not show any income which is subject to tax exemption or reduced
tax rate under section 44; or
(v) does not show or result any refund; and
(c) the assessee has complied with the provisions of sections 75A, 108 and 108A.
1.23 Modification in “Minimum tax”. [Section 82C]
The amended version of this section is follows:
(1) Notwithstanding anything contained in any other provisions of this
Ordinance, minimum tax shall be payable by an assessee in accordance with
the provisions of this section.
(2) Minimum tax on income on sources from which tax has been deducted or
collected under certain sections shall be the following-
(a) any tax deducted or collected at source under the provisions of sections
mentioned in clause (b) shall be the minimum tax on income from the source
or sources for which tax has been deducted or collected;
(b) the tax referred to in clause (a) shall be the tax deducted or collected under
sections 52, 52A, SL No. 1 of the Table of sub-section (1) of section 52AA, 52AAA,
52B, 52C, 52D, 52JJ, 52N, 52O, 52R, 53, 53AA, 53B, 53BB, 53BBB, 53BBBB, 53C,
53CCC, 53DDD, 53E, 53EE, 53F, 53FF, 53G, 53GG, 53H, 53M, 53N, 53P
and 55:
Provided that the tax deducted or collected from the following sources
shall not be the minimum tax for the purpose of this sub-section-
(i) tax collected under section 52 from the following persons-
a. a contractor of an oil company or a sub-contractor to the contractor
of an oil company as may be prescribed;
b. an oil marketing company and its dealer or agent excluding petrol
pump station;
c. any company engaged in oil refinery;

d. any company engaged in gas transmission or gas distribution;
(ii) tax deducted under section 53 from import of goods by an industrial
undertaking, except an industrial undertaking engaged in producing cement,
iron or iron products as raw materials for its own consumption;
(iii) tax deducted under section 53F from a source other than the sources
mentioned in clause (c) of sub-section (1) and sub-section (2) of that
section;
(c) for the sources of income for which minimum tax is applicable, books of
accounts shall be maintained in the regular manner in accordance with the
provisions of section 35;
(d) income from any source, for which minimum tax is applicable under this
sub-section, shall be determined in regular manner and tax shall be
calculated by using applicable rate on such income. If the tax so calculated is
higher than the minimum tax under clause (a), the higher amount shall be
payable on such income:
Provided that income shall be determined and tax shall be calculated for
certain sources in the manner as specified in the following-
Sources of
Serial income as Amount that will Rate or amount
No. mentioned in be taken as income of tax
(1) (2) (3) (4)
1. Section 52C amount of compensation as as mentioned in section 52C
mentioned in section 52C
2. Section 52D amount of interest as as mentioned in section 52D
mentioned in section 52D
amount of export cash
Section 53DDD as mentioned in section
3. subsidy as mentioned in
53DDD
section 53DDD
4. Section 53F(1)(c) amount of interest as
mentioned in section 53f as mentioned in section 53F
and (2)
5. Section 53H deed value as mentioned in as mentioned in section 53H
section 53H less cost of and the rule made thereunder
acquisition
6. Section 53P Any sum paid by real estate As mentioned in section 53P
developer to land owner
(e) income or loss computed in accordance with clause (d) or the proviso of
clause (d) shall not be set off with loss or income, respectively, computed for
any regular source.
(3) Where the assessee has income from regular source in addition to the income
from source or sources for which minimum tax is applicable under sub-
section (2)-

(a) regular tax shall be calculated on the income from regular source;
(b) the tax liability of the assessee shall be the aggregate of the tax as determined
under sub-section (2) and the regular tax under clause(a).
(4) Subject to the provisions of sub-section (5), minimum tax for a firm or a
company shall be the following-
(a) every firm having gross receipts of more than taka fifty lakh or every
company shall, irrespective of its profits or loss in an assessment year, for
any reason whatsoever, including the sustaining of a loss, the setting off of a
loss of earlier year or years or the claiming of allowances or deductions
(including depreciation) allowed under this Ordinance, be liable to pay
minimum tax in respect of an assessment year at the following rate-
Sl. No. Classes of assessee Rate of minimum tax
1. Manufacturer of cigarette, bidi, chewing tobacco, 1% of the gross receipts

smokeless tobacco or any other tobacco products
2. Mobile phone operator 2% of the gross receipts
3. Any other cases 0.60% of the gross receipts:
Provided that such rate of tax shall be zero point one zero percent (0.10%)
of such receipts for an industrial undertaking engaged in manufacturing of
goods for the first three income years since commencement of its commercial
production.
(b) where the assessee has an income from any source that is exempted from tax
or is subject to a reduced tax rate, the gross receipts from such source or
sources shall be shown separately, and the minimum tax under this
sub-section shall be calculated in the following manner-
(i) minimum tax for receipts from sources that are subject to regular tax rate
shall be calculated by applying the rate mentioned in clause(a);
(ii) minimum tax for receipts from sources that enjoys tax exemption or
reduced tax rate shall be calculated by applying the rate mentioned in
clause (a) as reduced in proportion to the exemption of tax or the
reduction of rate of tax;
(iii) minimum tax under this sub-section shall be the aggregate of the
amounts calculated under sub-section (i) and (ii).
Explanation.- For the purposes of this sub-section, ‘gross receipts’ means-
(i) all receipts derived from the sale of goods;
(ii) all fees or charges for rendering services or giving benefits including
commissions or discounts;
(iii) all receipts derived from any heads of income.
(5) Where the provisions of both sub-section (2) and sub-section (4) apply to an
assessee, minimum tax payable by the assessee shall be the higher of

(a) the minimum tax under sub-section (2); or
(b) the minimum tax under sub-section (4).
(6) Minimum tax under this section shall not be refunded, nor shall be adjusted
against refund due for earlier year or years or refund due for the assessment
year from any source.
(7) Where any surcharge, additional interest, additional amount etc. is payable
under provisions of this Ordinance, it shall be payable in addition to the
minimum tax.
(8) Where the regular tax calculated for any assessment year is higher than the
minimum tax under this section, regular tax shall be payable.
(8A) Where tax has been mistakenly deducted and collected in excess or deficit of
the due amount (i.e. the amount to be deducted or collected in accordance
with the provision of Chapter VII), minimum tax under this section shall be
computed based on the due amount of deduction or collection, and provisions
of this section shall apply accordingly.
(a) “regular source” means any source for which minimum tax is not applicable
under sub-section(2);
(b) “regular tax” means the tax calculated on regular income using the regular
manner;
(c) “regular tax rate” means the rate of tax, that would be applicable if the tax
exemption or the reduced tare were not granted.
1.24 Amendment in Tax, etc. escaping payment. [section 93]
In clause (c) of sub-section (4), the word “five” has been replaced as “six. The first
proviso of this section and the word “further” in second provisio has been
omitted. The amended version of this sub-section (4) is follows:
(4) A notice under sub-section (1) may be issued by the Deputy Commissioner of
Taxes-
(a) at any time where, for the relevant assessment year, no return was filed and
no assessment was made;
(b) within six years from the end of the relevant assessment year where, for the
relevant assessment year, no return was filed but assessment is completed;
(c) within six years from the end of the relevant assessment year in any other
cases:
Provided that in a case where a fresh assessment is made for any
assessment year in pursuance of any provision under this Ordinance, the
period referred to in this sub-section shall commence from the end of the
year in which the fresh assessment is made.
1.25 Amendment in “Definition of Transfer Pricing”. [Section 107A]
In clause (b) of sub-section (5), the words “irrespective of whether such other person is
a non-resident or not” have been inserted after the words “with a person”. The
amended version of clause (b) is follows:
(b) a transaction entered into by an enterprise with a person irrespective of whether
such other person is a non-resident or not, other than an associated enterprise, if
there exists a prior agreement in relation to the relevant transaction between
such other person and the associated enterprise, or the terms of the relevant
transaction are determined in substance between such other person and the
associated enterprise;
1.26 Insertion of new sub-section in “computation of arm’s length price”. [Section 107C]
A new sub-section (1A) has been inserted after sub-section (1). The new
sub-section (1A) is as follows:
(1A) Where the most appropriate method applied is a method other than the method
referred to in clause (d) or clause (f) of sub-section (1) and the dataset of the arm’s
length price consists of six or more entries, an arm’s length range beginning from the
thirty percentile of the dataset and ending on the seventy percentile of the dataset shall
be constructed and the arm’s length price shall be-
(i) if the price at which the international transaction has actually been undertaken is
within the range referred as above, then the price at which such international
transaction has actually been undertaken shall be deemed to be the arm’s length
price;
(ii) if the price at which the international transaction has actually been undertaken is
outside the arm’s length range referred as mentioned above, the arm’s length price
shall be taken to be the median of the dataset
In a case the dataset is less than six entries, the arm’s length price shall be the arithmetical
mean of all the values included in the dataset.
1.27 Changes in “Reference to Transfer Pricing Officer”. [Section 107D]
In the proviso to sub-section (4), the words “and in computing the income of a person
that is exempted from tax or is subject to a reduced rate of tax, the adjustment made in
conformity with the arm’s length price so determined by the Transfer Pricing Officer shall
be treated as income of such person and tax shall be payable on such income at the regular
rate” have been added after the word “officer”. The amended proviso stands as
follows:
The Deputy Commissioner of Taxes, upon receipt of the order under sub-section
(3), shall proceed to compute the total income of the assesseee in conformity with
the arm’s length price so determined by the Transfer Pricing Officer and in
computing the income of a person that is exempted from tax or is subject to a reduced rate

of tax, the adjustment made in conformity with the arm’s length price so determined by
the Transfer Pricing Officer shall be treated as income of such person and tax shall be
payable on such income at the regular rate.
1.28 Changes in “Punishment for false statement in verification, etc.”. [Section 165]
In clause (c), the words “first or second proviso to” have been replaced as “proviso
of”. The amended clause (c) is follows:
(c) signs and issues any certificate mentioned in the proviso of section 82 which he
either knows or believes to be false or does not believe to be true;
1.29 Changes in “Punishment for unauthorized employment”. [Section 165C]
The words “Board of Investment or any competent authority of the Government,
as the case may be” has been replaced as “appropriate authority of the Government”.
The amended section is as follows:
A person is guilty of an offence punishable with imprisonment for a term which
may extend to three years, but shall not be less than three months, or with fine up
to taka five lakh, or both, if he employs or allows to work any individual not
being a Bangladeshi citizen without prior approval from appropriate authority of
the Government.
1.30 Changes in “Requirement of twelve-digit Taxpayer’s Identification Number in
certain cases”. [Section 184A]
In sub-section (3), items (vii), (xviii) and (xxxii) have been modified and new item
(xxxiii) has been inserted. The modified and newly inserted items are follows:
(vii) obtaining registration, by a resident, of the deed of transfer, baynanama or
power of attorney or selling of a land, building or an apartment situated
within a city corporation or a paurashava of a district headquarter or
cantonment board, where the deed value exceeds one lakh taka;
(xviii) obtaining or maintaining the connection of electricity in a city corporation,
paurashava or cantonment board;
(xxxiii) releasing overseas grants to a non-government organisation registered with NGO
Affairs Bureau or to a Micro Credit Organisation having license with Micro
Credit Regulatory Authority.
1.31 Insertion of “Requirement of mentioning Twelve-digit Taxpayer’s Identification
Number in certain documents”. [section 184CC]
Notwithstanding anything contained in any other law for the time being in force where
any document relating to the transfer of land, building or apartment situated within a
city corporation, or cantonment board, or a paurashava of a district headquarters, deed

value of which exceeds taka one lakh and required to be registered under the Registration
Act, 1908 (XVI of 1908), such document shall contain twelve-digit Taxpayer’s
Identification Number of both the seller and the purchaser.
1.32 Change in the Second Schedule.
In paragraph 3, the words “applicable to his total income including the said
income or at the rate of twenty per cent, whichever is the lower” is replaced by
the words “of twenty per cent”. The amended version of this paragraph 3 is
follows:
3. Where the total income of an assessee includes any income from “winnings”
referred to in section 19(13) chargeable under the head “Income from other
sources” (hereinafter referred to as the “said income”), the tax payable by him
on the said income shall be at the rate of twenty per cent.
1.33 Changes in Part A of Sixth Schedule.
1.33.01 Modification in paragraph 1
Item (iii) clause (b) of sub-paragraph (2) of paragraph 1 has been replaced. The
new version of item (iii) of clause (b) is as under:
deposited at least fifty per cent of such money in an account with scheduled bank of which
fifty-one per cent or more shares are held by the Government and the rest amount of
money may be deposited in any scheduled bank.
1.33.02 Replacement of paragraph 11A
The replaced paragraph is as follows:
(11A) Any sum or aggregate of sum received as dividend by a person being an individual
from a company or companies listed to any stock exchange in Bangladesh up to taka
fifty thousand.
Sub-paragraph (b) of paragraph 34 has been modified. The modified
sub-paragraph is as under:
(b) the person shall file return in accordance with the provisions of under
sub-section (5) of section 75 of the Ordinance; and
1.33.04 Modification in paragraph 35, 39, 44 and 45
The word “2019” has been replaced as “2024” in paragraph 35, 44 and 45 for
export of handicrafts, Small and Medium Enterprise (SME), Cinema hall or
Cineplex, production of rice bran oil respectively.
In paragraph 39 the words “thirty-six lakh” has been replaced by the words “fifty
lakh”.

The words “derived from the operation” have been omitted. The replaced version
of this paragraph is as “Any income of an educational or training institution runs
exclusively for persons with disability.”
The words “being a resident in Bangladesh” has been omitted. The amended
version of this paragraph is as “Any distribution of taxed dividend to a company
if the company distributing such taxed dividend has maintained separate account
for the taxed dividend.”
1.34 Changes in Part B of Sixth Schedule.
Paragraph 23 “investment tax credit for purchase of one computer or one laptop
by an individual assessee” has been omitted.
1.35 Changes in “Deduction of tax from payment to contractors, etc.” [Rule 16]
Table-1 of clause (a) has been replaced. The replaced table-1 is follows:
Sl. No. Amount Rate of deduction of tax

1. Where base amount does not exceed taka 15 lakh 2%
Where base amount exceeds taka 15 lakh but does not
2. exceed taka 50 lakh 3%
3. Where base amount exceeds taka 50 lakh but does not

4%
exceed taka 1 crore
4. Where base amount exceeds taka 1 crore 5%
Sl. No. 6 and 7 have been inserted after Sl. No. 5 of Table-2 of clause (b). The
newly inserted items are follows:
6. In case of an industrial undertaking engaged in producing 3%

cement, iron or iron products except MS Billets
7. In case of an industrial undertaking engaged in the 0.5%

production of MS Billets

1.36 Changes in “Collection of tax from importers”. [Rule 17A]
Table-1 of clause (b) has been replaced. The replaced table is follows:
Sl. No. Heading H.S. Code Description
(1) (2) (3) (4)
1. 27.09 2709.00.00 Petroleum oils and oils obtained from
bituminous minerals, crude
2. 27.10 2710.12.11 Motor spirit of H.B.O.C Type
3. 27.10 2710.12.19 Other motor spirits, including aviation spirit
4. 27.10 2710.12.20 Spirit type jet fuel
5. 27.10 2710.12.31 White spirit
6. 27.10 2710.12.32 Naphtha
7. 27.10 2710.12.39 Other
8. 27.10 2710.12.41 J.P.1 kerosene type jet fuels
9. 27.10 2710.12.42 J.P.4 kerosene type jet fuels
10. 27.10 2710.12.43 Other kerosene type jet fuels
11. 27.10 2710.12.49 Other kerosene
12. 27.10 2710.12.50 Other medium oils and preparations
13. 27.10 2710.12.61 Light diesel oils
14. 27.10 2710.12.62 High speed diesel oils
15. 27.10 2710.12.69 Other
16. 27.10 2710.19.11 Furnace oil
17. 27.10 2710.19.19 Other
18. 27.11 2711.12.00 Propane
19. 27.11 2711.13.00 Butanes
20. 27.13 2713.20.10 Petroleum bitumen-In Drum
21. 27.13 2713.20.90 Petroleum bitumen-Other
22. 41.02 4102.10.00 Raw skins of sheep or lambs-With wool on
23. 41.02 4102.21.00 Raw skins of sheep or lambs-Without wool on: Pickled
24. 41.02 4102.29.00 Raw skins of sheep or lambs-Without wool on: Other
25. 41.03 4103.20.00 Other raw hides and skins- Of reptiles
26. 41.03 4103.90.00 Other raw hides and skins- Other
27. 72.13 All H.S Code Bars and rods, hot-rolled, in irregularly wound
coils, of iron or non-alloy steel
28. 72.14 All H.S Code Other bars and rods of iron or non-alloy steel,
not further worked than forged, hot-rolled,
hot-drawn or hot- extruded, but including those
twisted after rolling

Sl. No. Heading H.S. Code Description
(1) (2) (3) (4)
29. 72.15 All H.S Code Other bars and rods of iron or non-alloy steel
30. 72.16 All H.S Code Angles, shapes and sections of iron or non-alloy steel
31. 84.08 8408.90.10 Engines of capacity 3 to 45 HP
32. 84.08 8408.90.90 Other
33. 84.13 8413.70.00 Other centrifugal pumps; Other pumps; liquid elevators
34. 84.37 8437.10.00 Machines for cleaning, sorting or grading seed,
grain or dried leguminous vegetable; Other machinery
35. 84.67 8467.29.00 Other, Other tools
36. 85.17 8517.12.10 Cellular (Mobile/fixed wireless) telephone set;
37. 85.17 8517.70.00 Loaded Printed Circuit Board/ PCB; Assembled/
Mother Board for Cellular Phone; Key; Keypad
housing; Keypad Dome; Front Shell; Vibrator;
Motor; Touch Panel; Touch Panel Glass for
mobile phone; Liquid Crystal Module; Camera
Module; Input- Output (I/O) Port; Internal
Earphone; Microphone; Antenna; Receiver;
38. 89.01 8901.20.30 Vessels capacity exceeding 5000 DWT for
registration in Bangladesh operating in Ocean
for at least three consecutive years and not older
than 20 years from the date of commissioning;
39. 89.01 8901.90.30 Vessels capacity exceeding 5000 DWT for
registration in Bangladesh operating in Ocean
for at least three consecutive years and not older
than 22 years from the date of commissioning;
Sl. No. 33, 38, 39, 40, 47, 48, 49, 50, 67, 68, 69, 72, 77, 79, 91, 92, 108, 137, 141, 146,
147, 150, 151, 168, 170, 177, 185 & 212 of proviso of Table-3 have been omitted.
1.37 Changes in the form of return of income. [Rule 24]

Replacement of part-1 of sub-rule (2). This replaced part-1 stands as follows:

1.38 Changes in recognition of association of accounts, registration of income tax
practitioners etc. by Board. [Rule 37]
The word “seven” in clause (c) of sub-rule (2) has been replaced by the word “five”.
New sub-rule (2a) has been inserted after sub-rule (2). The newly inserted
sub-rule is follows:
(2a). An income tax practitioner shall be a member of any registered Taxes Bar
Association:
Provided that this provision shall not apply to an income tax practitioner under clause
(c) of sub-rule (2).

Section-II
INDIRECT TAXES
Value Added Tax & Supplementary Duty
CUSTOMS DUTIES
2.00 Value Added Tax & Supplementary Duty
2.01 Implementation of the Value Added Tax & Supplementary Duty (SD) Act, 2012
The new Value Added Tax (VAT) and Supplementary Duty (SD) Act, 2012 and
Value Added Tax (VAT) and Supplementary Duty (SD) Rules, 2016 come into
force from 1 July 2019. The Value Added Tax (VAT) Act 1991 and Value Added
Tax (VAT) Rules 1991, all SROs and Orders issued under this Act have been
repealed from 1 July 2019 by SRO. No. 170-Law/2019-27-Mushak, dated: 13 June
2019.
2.02 VAT Registration and Turnover Tax Enlistment
2.02.01 Threshold for turnover tax enlistment. [Section 2(48)]
The threshold for turnover tax enlistment is now BDT 5 million which was earlier
BDT 3 million as per VAT Act 1991.
2.02.02 Threshold for VAT registration. [Section 2(57)]
The turnover threshold for VAT registration is now BDT 30 million which was
earlier BDT 8 million as per VAT Act 1991.
2.02.03 Mandatory VAT registration. [ Section 4 (2)]
According to section 4 (2) of VAT and SD Act 2012, the following persons
carrying on the economic activity, irrespective of their turnover, shall have to be
registered under VAT:
(a) Supplier, manufacturer or importer of any goods or services subject to
supplementary duty in Bangladesh;
(b) Participant to any tender or work order to supply any goods or services;
(c) Any importer or exporter;
(d) Any other person determined by the board for supplying, manufacturing or
importing defined goods or services in a specific geographical area.
According to General Order-17/Mushak/2019, dated:17 July 2019, the following
person carrying on the economic activity, irrespective of their turnover, shall
have to be registered under VAT:
I. Manufacturer of goods:
Heading No. H.S. Code Products
04.01 to 04.04 All relevant H.S. code Milk products
11.08 All relevant H.S. code starch
13.01, 13.02 All relevant H.S. code Gum
17.02 All relevant H.S. code Glaucus/Dextrose
17.03 All relevant H.S. code Molases
17.04 All relevant H.S. code Chocolate, Chewing gum
18.06 All relevant H.S. code Chocolate

19.02 All relevant H.S. code Noodles and other food items
19.05 All relevant H.S. code Biscuit, Chana Chur and other food items
20.07 All relevant H.S. code Jam and Jelly
21.03, 21.06 All relevant H.S. code Achar, sauce
25.07 All relevant H.S. code China clay
25.21 to 25.22 All relevant H.S. code Lime
25.15, 68.02 All relevant H.S. code Marble Stone
28.28 All relevant H.S. code Lead Oxide
28.33, 33.07 All relevant H.S. code Allam
28.39 All relevant H.S. code Sodium Silicate
29.05 All relevant H.S. code Glycerin
29.15 All relevant H.S. code Acidic acid
29.33 All relevant H.S. code Melamine
30.01 to 30.06 All relevant H.S. code Antiseptic, dyspeptic and medicine
32.07 to 32.12 All relevant H.S. code Pigment, varnishes and polishes
32.15 All relevant H.S. code All types of ink
34.01 to 34.02 All relevant H.S. code All soups including liquid soup
34.02 All relevant H.S. code Detergent
36.05 All relevant H.S. code Firebox
38.08 All relevant H.S. code Mosquito coil
39.21 All relevant H.S. code Foam
39.23 All relevant H.S. code PVC pipe and plastic container
39.26 All relevant H.S. code Plastic products
40.11 to 40.13 All relevant H.S. code Tyre and tube
40.16 All relevant H.S. code Rubber products
42.02, 64.03 All relevant H.S. code Leather products
44.09 to 44.21 All relevant H.S. code Wooden products
44.10 All relevant H.S. code Particle board
48.10 All relevant H.S. code Insulation board
44.11 All relevant H.S. code Hardboard
44.12 All relevant H.S. code Fly wood
47.03 to 47.05 All relevant H.S. code Pulp
48.18 All relevant H.S. code Toilet paper/tissue paper/sanitary napkin
48.19 All relevant H.S. code Packaging material
51.05 All relevant H.S. code Woolen fabrics
52.05 All relevant H.S. code Cotton yarn
52.08 All relevant H.S. code Cotton fabrics
54.04 All relevant H.S. code Synthetic fiber
56.07 All relevant H.S. code Nylon cord
56.08 All relevant H.S. code Fishing net
59 to 62 All relevant H.S. code Knitted and crouched fabrics/scooches/
readymade garments

68.05 All relevant H.S. code Send paper
68.11 All relevant H.S. code Asbestos
69.01 to 69.04 All relevant H.S. code All types of bricks
69.03 All relevant H.S. code Carbon rod
69.05 to 69.14 All relevant H.S. code All types ceramics products and product
made by Focalin
70.13 All relevant H.S. code Glassware
72.04 All relevant H.S. code Scrap
72.10 to 73.26 All relevant H.S. code All types of MS products
73.20 All relevant H.S. code Leaf spring
73.24 All relevant H.S. code Sanitary wear
72.18 All relevant H.S. code Steel ingot
72.25 All relevant H.S. code Stainless steel
73.17, 74.15, 76.16, 79.07 All relevant H.S. code Nails
74.08 to 76.05, 85.44 All relevant H.S. code Cooper and aluminum products
76.04 to 76.06 All relevant H.S. code Aluminum fittings
76.07 All relevant H.S. code Aluminum foil
78.01 All relevant H.S. code Lead ingot
82.08 All relevant H.S. code Blade
83.11 All relevant H.S. code Welding electrode
84.14 All relevant H.S. code Electric fan and its spare parts
84.16 All relevant H.S. code Gas burner
85.04 All relevant H.S. code Electric transformer
85.06, 85.07 All relevant H.S. code Dry cell battery and storage battery
85.07 All relevant H.S. code Battery separator
85.28 All relevant H.S. code Television
85.39 All relevant H.S. code Electric bulb
87.14 All relevant H.S. code Bicycle parts
II. Service provider:

Heading No. Service Code Description of services
S001 S001.10 Hotel (except exempted by orders)
S001.20 Restaurant (except exempted by orders)
S002 S002.00 Decorators and Caterers
S003 S003.10 Motor Vehicles Garage and Workshop
S003.20 Dockyard
S004 S004.00 Construction Contractor
S005 S005.10 Warehouse
S005.20 Port
S007 S007.00 Advertising Firm
S008 S008.10 Printing Press

S009 S009.00 Auctioneers
S010 S010.10 Land Development Organization
S012 S010.20 Building Construction Organization
S012.10 Telephone
S012.11 Tele-printer
S012.12 Telex
S012.13 Fax
S012.14 Internet Agency
S012.20 SIM Card provider
S013 S013.00 Machine based Laundry
S014 S014.00 Indenting Organization
S015 S015.10 Freight forwards
S015.20 Clearing & Forwarding Agency
S017 S017.00 Community Center
S018 S018.00 Film Studio
S020 S020.00 Survey firm
S021 S021.00 Plant and Capital Equipment Rent
Providing Organization
S022 S022.00 Mistanno Bhandar
S023 S023.10 Cinema Hall
S023.20 Film (Cinema) Distributor
S024 S024.10 Furniture Manufacturer
S024.20 Furniture Sales Centre
S026 S026.00 Goldsmith and silversmith
S027 S027.00 Insurance Company (except exempted by orders)
S028 S028.00 Courier and Express Mail Service
S030 S030.00 Beauty Parlor
S032 S032.00 Consultancy and supervisory firm
S033 S033.00 Lessor
S034 S034.00 Audit and accounting firm
S035 S035.00 Shipping Agent
S036 S036.10 AC Bus service
S036.20 AC Launch service
S036.30 AC Railway service
S037 S037.00 Procurement provider (except exempted by orders)
S038 S038.00 Organizer of cultural program by foreign artist
S039 S039.10 Satellite cable operator
S039.20 Satellite channel distributor
S040 S040.00 Security Services
S043 S043.00 Television and online broadcast program provider
S046 S046.00 Health club and fitness center
S047 S047.00 Organizer of sports

S048 S048.00 Transport contractor (Except transport of food grain)
S049 S049.00 Rent-A-Vehicle
S050 S050.10 Architect, Interior Designers or Interior decorators
S050.20 Graphic Designer
S051 S051.00 Engineering firm
S052 S052.00 Sound and Lighting instrument renter
S053 S053.00 Participants in board meetings
S054 S054.00 Advertisement Broadcasting agency
through Satellite channel
S056 S056.00 Banking and non-banking service provider
S057 S057.00 Electricity distributor (Except electricity
used in irrigation and cold storage)
S058 S058.00 Renter of chartered planes or helicopters
S059 S059.00 Glass-sheet coated organization
S060 S060.00 Purchaser of auctioned goods
S061 S061.00 Credit card providing organization
S062 S062.00 Money changer organization
S063 S063.00 Air-conditioned tailoring shop and tailors
S064 S064.10 Amusement Park and Theme Park
S064.20 Picnic spot and shooting spot
S065 S065.00 Clearing and maintaining agencies of
Building, Floor and Premises
S066 S066.00 Lottery Ticket Seller
S067 S067.00 Immigration advisor
S068 S068.00 Coaching center
S071 S071.00 Program organizer
S072 S072.00 Human resource supplier or management
organization
S074 S074.00 Place and establishment renter
S076 S076.00 Social and Sports Related Club
S078 S078.00 Seller of Readymade Garments
S080 S080.00 Ride Sharing
S080 S099.10 Information Technology Enabled Services
S099 S099.30 Sponsorship services
S099.50 Credit Rating Agency
S099.60 Online Product Sale

III. Irrespective of place of business all Super shop, shopping mall and
supplier of following goods located in any district headquarter or city
corporation:
25.23 All relevant service code Cement
69.05 to 69.14 All relevant service code All types of ceramics products and
products made by porcelain
70.10 to 70.12 All relevant service code GP sheet/ CI sheet
72.13 to 72.16 All relevant service code MS products
73.24 All relevant service code Sanitary wear
76.04. to 76.06 All relevant service code Aluminum fittings
84.15, 84.16, All relevant service code All types of electric and electronics
85.09, 85.16, products including air conditioner,
85.28, 85.29 refrigerator, Television
2.02.04 Central or unit registration. [Section 5]

According to section 5 of VAT and SD Act 2012, if same type of goods or services
are supplied from different locations by a person then he shall take a central
registration. In such case, the person shall maintain all books and records
centrally.
Alternatively, if different types of goods or services are supplied from different
locations by a person then he shall be registered separately for each place.
Transfer of goods or services between one unit to another unit (internal transfer)
by a centrally registered person shall not be treated as supply. Thus, this
transaction shall not result output VAT liability and input VAT credit.
2.02.05 Voluntary VAT registration. [Section 8]
According to section 8 of VAT and SD Act 2012, if any person, providing taxable
supplies in the process of economic activities is not required to be registered
under VAT, may voluntarily take VAT registration upon making application to
the concerned officer of VAT.
2.02.06 Mandatory keeping books and records through software
As per General Order-16/Mushak/2019, dated: 30 June 2019, the person
registered or required to be registered whose previous financial year turnover
exceeds BDT 50 million, shall keep books and records through software
recognized by NBR. The eligible entity shall be used such software from 1
September 2019.
2.03 Imposition of VAT
Generally, VAT rate for taxable import or supply is 15%. However, for certain
goods or services rates varying from 2 % to 10%.
2.03.01 Insertion of new schedule for reduce rate goods or services
Third schedule has been introduced for addressing the reduced VAT rate on
goods or services. Reduced VAT rate for certain services are providing below:
VAT rate VAT rate
Sl. Service under under Increase/
No. Name of services VAT & SD VAT decrease
Code Act, 2012 Act, 1991
S012 S012.14 Internet agency 5% 5% No change
S014 S014.00 Indenting firm 5% 15% Decreased
S024 S024.20 Furniture showroom 5% 5% No change
S026 S026.00 Goldsmith and silversmith 5% 5% No change
S036 S036.20 AC launch services 5% 15% Decreased
S048 S048.00 Transport contractor 5% 5% No change
(petroleum products)
S057 S057.00 Electricity distributor 5% 5% No change
S069 S069.00 English Medium School 5% 5% No change
S080 S080.00 Ride Sharing 5% 5% No change
S099 S099.10 Information Technology 5% 5% No change
Enabled Services
S001 S001.20 Non-AC hotel and restaurant 7.5% 7% Increased
S004 S004.00 Construction contractor 7.5% 7% Increased
S024 S024.10 Furniture manufacturer 7.5% 7% Increased
S037 S037.00 Procurement provider 7.5% 5% Increased
S060 S060.00 Buyer of auctioned goods 7.5% 5% Increased
S064 S064.10 Amusement park and theme park 7.5% 15% Decreased
S078 S078.00 Seller of both own and others 7.5% 5% Increased
brand readymade garments
S003 S003.10 Motor car garage and workshop 10% 10% No change
S003 S003.20 Dockyard 10% 10% No change
S008 S008.10 Printing press 10% 15% Decreased
S009 S009.00 Auction firm 10% 15% Decreased
S013 S013.00 Automated laundry 10% 15% Decreased
S018 S018.00 Film studio 10% 15% Decreased
S023 S023.10 Cinema hall 10% 15% Decreased
S023 S023.20 Film producer 10% 15% Decreased
S031 S031.00 Repair and maintenance 10% 15% Decreased
S040 S040.00 Security service 10% 15% Decreased
S042 S042.00 Automated saw mill 10% 15% Decreased
S047 S047.00 Sports organizer 10% 15% Decreased
S048 S048.00 Transport contractor 10% 10% No change
(except petroleum goods)
S053 S053.00 Board meeting participants 10% 15% Decreased
S063 S063.00 Tailoring shop and tailors 10% 15% Decreased
S065 S065.00 Building, floor, compound cleaning 10% 15% Decreased
or maintenance service provider
S066 S066.00 Lottery ticket seller 10% 15% Decreased
S076 S076.00 Social and sports club 10% 15% Decreased
S010 S010.10 Land developer 2% 3% Decreased
S010 S010.20 Building construction firm
a) Up to 1,600 square feet 2% 2% No change
b) Above 1,600 square feet 4.5% 4.5%
c) Re-registration irrespective of size 2% 2%
However, VAT for local trader shall be 5%.

2.03.02 VAT agent of non-resident. [Section 19]
According to section 19 of VAT and SD Act 2012, a non-resident, who does not
carry on an economic activity from a fixed place in Bangladesh, shall appoint a
VAT agent.
Such VAT agent of a non-resident shall bear all responsibility and carry out all
activities of the non-resident, and shall be jointly and severally liable for the
payment of all dues including taxes, fines, penalties, and interests that may arise.
However, the VAT registration of the economic activities by a VAT agent shall be
in the name of the principal.
2.04 Zero-rated supplies. [Section 21]
Following supplies shall be zero-rated, namely-
• A supply of immoveable property shall be zero-rated if the land to which the
immoveable property relates is outside Bangladesh.
• Supply of any goods for export shall be zero-rated. However, the export of any
goods whether re-imported or intended for re-import shall not be zero-rated.
• Supply of goods for the repair or replacement of a good under warranty shall
be zero-rated upon fulfilling some conditions.
• The supply of a service to outside Bangladesh shall be zero-rated.
2.05 Manner of VAT collection. [Chapter 4]
The Commissioner of Customs or Customs Officer shall collect VAT on the
taxable imports in the same manner and at the same time as he collects customs
duty on such imports under the customs Act even if import duty is not imposable
on such import.
However, a good brought for export, without being released for consumption
inside Bangladesh, shall not be liable to any tax.
2.06 Advance Trade VAT. [Section 31]
Every registered person or a person required to be registered or an enlisted
person, who makes a taxable import for his economic activities, shall make
payment of the VAT or turnover tax in advance payable on the supply of his
imported goods at 5% of the value of the taxable import. As per VAT and SD Act
2012, previously it was 3%, subsequently by the Finance Act 2019 the rate was
replaced as 5% instead of 3%.
2.07 Determination of value of the taxable supply. [Section 32]
The value of the taxable supplies shall be the amount derived by reducing the tax
fraction [VAT rate/ (100+ VAT rate)] from the consideration or fair value.
However, following need to be ensued in determining the base value of taxable
supplies:

• If the transactions take place between associated entities, fair market value of
the taxable supplies.
• If transaction take place between associated entities, without or lower
consideration that market price, value of such supply shall be the fair market
price of such supply, reduced by the tax fraction of that price.
• The value of taxable supply other than the taxable ones shall be the
consideration for such supply.
• Registered and enlisted person shall submit input-output co-efficient to the
VAT authority in prescribed form in case of all taxable supplies.
2.08 Payment of VAT. [Section 33]
Under new VAT Act, the registered person does not require to maintain positive
balance in VAT current account. The registered person under new law shall pay
the net payable amount (increasing adjustment less decreasing adjustment)
within 15 days following the month end at the time of submission of VAT return.
For continuous supply of goods such as electricity, gas, water etc., VAT is to be
deposited within 60 days from the date of issuance of invoice.
2.09 Progressive or periodic supplies. [Section 34]
• Each progressive or periodic supplies shall be treated as a separate supply.
• If each of the progressive or periodic supplies is not readily separable, such
supply shall be treated as a series of separate supplies each corresponding to
the proportion of the supply to which such separate part of the consideration
relates.
• In relation to each part of a supply under a lease or of a right to use any
property, the time required continuously over the period of such lease or
right of use shall be treated as the time of supply.
2.10 Sale of an establishment as a going concern. [Section 36]
Where a person transfers an establishment in Bangladesh as his running business,
such transfer shall not be liable to VAT in Bangladesh, if the running business
establishment has to be acquired with intention to keep economic activity going
after its sale.
2.11 Input tax credit. [Section 46]
Except as provided in the following cases, a registered person shall be entitled to
an input tax credit against the Value Added Tax imposed on a taxable supply or a
taxable import:
• The value of a taxable supply exceeds Taka 1,00,000 (one lakh) only and the
consideration against such supply is paid in cash instead of through a
banking channel.

• In case of imported supplies, input VAT is not claimed in VAT return.
• Input tax credit is not made either in the tax period in which VAT is paid and
subsequent two tax periods.
• VAT paid on the goods under the custody or procession or occupancy of
another person.
• VAT paid on input that have not been entered into the purchase register
prescribed in rules.
• If name, address, registration number of purchaser and seller are not
mentioned in Tax invoice.
• When supplies are received from importer, bill of entry number is not
mentioned in tax invoice issued by importer or description of supplies
mentioned in tax invoice are not agree with bill of entry.
• In case of inputs released furnishing bank guarantee, VAT involved with bank
guarantee portion, until the cause for which bank guarantee was furnished
have been finally settled.
• VAT paid on input used in the production of exempted goods.
• Turnover tax paid on input received from a turnover taxpayer.
• Supplementary Duty paid on input used in the production of goods or
rendering of services.
• Input tax paid on input used to supply goods or services except goods or
services chargeable to 15% VAT or VAT at specified rate.
• Any input item not mentioned in the input-output VAT co-efficient.
 Input VAT shall not claim on goods against an acquisition or import, if-
• such acquisition or import relates to a passenger vehicle, or its spare parts or
for the repair and maintenance services of such vehicle:
provided that input tax credit may be allowed when dealing in vehicles,
renting them out or supplying transportation services are included in the
economic activities of such person and the vehicle is acquired for that
purpose;
• such acquisition or import relates to entertainment or is used to provide
entertainment:
provided that input tax credit may be allowed when provision of
entertainment relates to such person’s economic activities and the
entertainment is provided in the normal course of his economic activities;

• such acquisition relates to a person’s membership or right of entry in a club,
association, or society, of a sporting, social, or recreational nature;
• such acquisition relates to transportation services.
 A registered person shall, in support of his claims for input tax credit at the time
of filing of returns, be in possession of the flowing documents, namely—
• in case of an import, a bill of entry bearing the name of the importer and the
business identification number.
• in case of a supply, a tax invoice issued by the supplier;
• in case of a withholding entity, a combined tax invoice and withholding
certificate issued by the supplier.
• Treasury challan for proof of payment of tax.
2.11.01 Adjustment of closing balance lying with Account Current Register
(Mushak-18) under Value Added Tax Act, 1991. [Rule 118]
 If there lies closing balance in Account Current Register (Mushak-18) of any
registered person under the Value Added Tax Act, 1991, hereinafter referred to as
the said Act, and if he is unable to adjust the same against the payable tax under
the said Act, then he can take decreasing adjustment of the closing balance
accrued on the date of introduction of the Act in observance of the subsequent
provisions of these Rules.
 Any registered person shall not be able to make decreasing adjustment of the
closing balance under the Act accrued against the Act, if: –
• If he is not registered under this Act;
• If there remains any undisposed case pending against him under the said Act;
• If any appeal or writ remains pending against him under the said Act; or
• If any arrear tax remains unrealized with him under the said Act.
 Any registered person can make decreasing adjustment of the input tax in each tax
period of the maximum 10% (ten percent) amount of the net tax payable under
the Act.
 With the purpose of making decreasing adjustment under Sub-Rule (3), the
registered person shall apply to the Commissioner with submitted return
(Mushak-19) under the said Act.
 The Commissioner shall verify the conditions within one month of the receipt of
the application and shall issue a certificate in form “Mushak-18.6” on the basis of
which the closing balance of the registered person accrued under the said Act
shall be disposed of under the Act.

 In the case of conducting activities under one registration under the Act of more
than one registration under the said Act, the registered person shall be entitled
with making decreasing adjustment under the Act, the accrued closing balance
mentioned against each of the certificate by the Commissioner in form
“Mushak-18.6”.
2.12 Withholding VAT. [Section 49]
There is new regulation made for withholding VAT under VAT and SD Act 2012
by SRO. No. 187-Law/2019/88-Mushak, dated: 13 June 2019. Subsequently this
SRO was amended by SRO. No. 235-Law/2019/71-Mushak, dated: 30 June 2019.
2.12.01 Definition of withholding entity
According to section 2 (21) and section 2 (93) “Withholding Entity” means:
• Ministry, board, authority, semi-government, autonomous body, state owned
entity, local authority or similar types institutions;
• Non-government organization approved by the NGO Affairs Bureau or the
Directorate General of Social Welfare;
• Bank, insurance or similar financial institutions; and
• Any limited company.
2.12.02 Rate of withholding VAT
As per SRO. No. 235-Law/2019/71-Mushak, dated: 30 June 2019, withholding
amount shall be-
• In case of 15% VAT, no withholding shall be required upon receiving
Mushak-6.3.
• In case of reduced or specified VAT rates, the withholding VAT amount shall
be the full amount of VAT.
2.12.03 Applicability of withholding VAT
• In case of service imports from outside Bangladesh by a person who is neither
registered or enlisted nor requires to be registered or enlisted, full VAT
amount shall be deducted by bank which is involved in payment for such
services.
• If purchaser bank paid bill amount on behalf of purchaser through internal
letter of credit or any other means then such bank shall deduct full VAT
amount and shall deposit the deducted amount to Government Treasury on
behalf of its customer.
• Government, Semi-Government, Autonomous Body and Local Authority shall
deduct 15% VAT at the time of issuing and renewing of licenses.
• Place and establishment renter shall deduct 15% VAT on rent amount.

However, withholding VAT shall not be applicable for the supply of utilities like
fuel, gas, water (WASA), electricity, telephone, and mobile bill.
2. 13 Documentation
The following statutory records have to be maintained in the prescribed format:
• Mushak 6.1 Purchase register for all registered person
• Mushak 6.2 Sales register for all registered person other than trader
• Mushak 6.2.1 Purchase and sales accounts for trader
• Mushak 6.5 Stock transfer challan form from one unit to another unit for
entity with centralized registration
• Mushak 6.10 Information related to purchase and sale more than BDT 0.2m
for all registered persons
• Mushak 9.1 Monthly VAT return for all registered person
2. 14 Imposition and collection of turnover tax. [Section-63]
• Every person enlisted or required to be enlisted shall pay turnover tax at the
rate of 4 (four) percent on the turnover of his economic activities.
• The amount of the advance tax paid by such person shall be adjusted against
such turnover tax.
• VAT or turnover tax paid on input purchased by enlisted person shall not
take credit.
2. 15 Carry forward and refund of negative net amount. [Section-68]
• In relation to an economic activity involving construction, house building,
land development, or property development; the excess amount of money
shall be carried forward indefinitely and may be deducted in subsequent tax
periods in accordance with the provision of this section; and
• In relation to other cases; the excess amount of money shall be carried forward
and may be deducted over the following 6 (six) tax periods, after which any
remaining excess money shall be refunded in accordance with the provision
of this section.
• However, if such amount does not exceed taka fifty thousand (50,000) it shall
not be refunded, it shall continue to be carried forward until it is reduced
to nil.
2.16 Exemption on specific goods and services by SROs
2.16.01 Exemption to investors of high-tech parks
As per SRO. No. 191-Law/2019/48-Mushak, dated: 13 June 2019, VAT exemption
continues for supply of the following services to investors in high-tech parks:
• Procurement provider (other than petroleum products)
• Electricity distributor

2.16.02 Exemption to Ruppur Nuclear Power Plant
According to General Order No. 12/Mushak/2019, dated: 13 June 2019, Local
supply of the following goods and services to Ruppur Nuclear Power plant
continues to be exempted from payment of VAT:
• Construction services
• Port
• Freight forwarders
• Clearing and forwarding agent
• Insurance company
• Repair and maintenance services
• Consultancy and supervisory firms
• Procurement providers
• Transport contactors
• Engineering firms
• Banking services
• Human resource suppliers
• Any other services
2.16.03 Exemption to investor organizations of private-public partnership
As per General Order No.11/Mushak/2019, dated: 13 June 2019, the following
services provided to private-public partnership project continues to be exempted
from payment of VAT:
• Construction services
• Consultancy and supervisory firm
• Procurement providers (except petroleum products)
• Legal services
2.16.04 Exemption to investor of BEZA
According to SRO. No. 190-Law/2019/47-Mushak, dated: 13 June 2019, VAT
exemption is allowed for the following services to investors in BEZA:
• Natural gas
• WASA
• Procurement provider (except petroleum products)
2.16.05 Exemption to export oriented entity
exemption continues for supply of the following services to export oriented and
EPZ entities:
• Telephone, telex, fax
• Insurance (only fire insurance)
• Courier and express mail services
• Banking and non-banking services
2.16.06 Exemption to 100% export oriented and EPZ entities
exemption is allowed for the following services to 100% export oriented and EPZ
entities:
• Natural gas
• WASA
• Procurement provider
• Security services
• Rent-A-Car
• Information technology enabled services
• Import of services
• Worker welfare and entertainment expense
• Laboratory testing charges
• Port
• Freight forwarders
• Clearing and forwarding agent
• Insurance company
• Shipping agent
2.16.07 Exemption to some specific industries
By different SROs, VAT exemption continues for purchase of raw materials and
spare parts for the following specific industries:
• Local Manufacturer of Compressor and Air-Conditioner-SRO. No. 173/
Law/2019/33-Mushak, dated: 13 June 2019 and SRO. No. 228-Law/
2019/64-Mushak, dated: 30 June 2019.
o Exemption of all VAT, except advance tax (here advance tax means
advance VAT) on raw materials and spare parts at local supply and
import stage upon fulfilling some conditions mentioned in the SRO.
• Local Manufacturer of Compressor, Refrigerator and Freezer -SRO. No.
174/Law/2019/31-Mushak, dated: 13 June 2019.
o Exemption of all VAT (except advance tax) and supplementary duty on
raw materials and spare parts at import stage upon fulfilling some
conditions mentioned in the SRO.

• Manufacturer of motorcycle and motor vehicle - SRO. No. 175/
Law/2019/32-Mushak, dated: 13 June 2019.
o Exemption of all VAT (except advance tax) on raw materials and spare
parts (except CKD Motorcycle) at import stage mentioned in Table-I & II
of Customs SRO. No. 155-Law/2017/41/ Customs; dated: 01 June 2017
upon fulfilling some conditions mentioned in the VAT SRO.
o Exemption of all VAT on production of motorcycle and motorcycle parts
(except locally assembling of CKD Motorcycle) by using raw materials
and spare parts mentioned in Tables Customs SRO. No. 155-Law/
2017/41/ Customs; dated: 01 June 2017 upon fulfilling some conditions
mentioned in the VAT SRO.
o Exemption of VAT more than 7% on locally produced motorcycle upon
fulfilling some conditions.
• Manufacturer of mobile set - SRO. No. 229/Law/2019/65-Mushak, dated: 30
June 2019.
o Exemption of all VAT (except advance tax) on raw materials and spare
parts at import stage upon fulfilling some conditions mentioned in
table-1 of VAT SRO.
o Exemption of all VAT on locally production of mobile phone set upon
fulfilling some conditions mentioned in table-2 of this VAT SRO.
o Exemption of VAT above than 3% on locally production of mobile phone
set upon fulfilling some conditions mentioned in table-3 of this VAT SRO.
• Manufacturer of polypropylene staple fiber production line- SRO. No. 179/
Law/2019/36-Mushak, dated: 13 June 2019 and SRO. No. 230/ Law/2019/
66-Mushak, dated: 30 June 2019.
o Exemption of all VAT (except advance tax) on main raw materials of
polymer of propylene only at import stage upon fulfilling some
conditions mentioned in the VAT SRO.
2.16.08 Exemption to foreign mission
exemption continues for supply of the following services to foreign missions and
some other international organizations:
• Telephone, telex, fax
• WASA
2.17 VAT implication in transitional period
According to General Order No. 03/Mushak/2019, dated: 13 June 2019, the
following instructions have been made for VAT implication on transitional
period:
2.17.01 Implication in registration
Circumstances under VAT Act 1991 Instruction under VAT and SD Act 2012
Person registered under VAT Act 1991. Shall be re-registered under VAT and SD
Act 2012 as soon as possible. Registered
person shall follow the prescribed
regulation from VAT online project.
Person registered under VAT Act 1991 but To be enlisted as a turnover taxpayer under
annual turnover is less than BDT 30 VAT and SD Act 2012. However, person
million. can take voluntary registration under VAT.
Company was required to be registered To be registered as soon otherwise legal
under VAT Act, 1991 but did not register action shall be taken.
under VAT.
2.17.02 Implication on rebate and current account
Rebate on released goods by using It will be a decreasing adjustment by
11-digit old BIN and purchase of input complying the provisions of law.
goods through Mushak-11 up to 30 June,
2019.
Adjustment of closing balance of VAT According to rule 118 of VAT and SD
current account. Rules 2016, decreasing adjustment shall
be given in the VAT return.
According to new VAT rule 118, The

closing balance of VAT current account as
on 30 June 2019 is allowed to be adjusted
in VAT return as decreasing adjustment,
subject to the Commissioner’s approval,
to the extent of maximum 10% of net tax
payable.
Input VAT rebate on tariff-based goods. Tariff-based goods under previous law, if
now fall under 15% VAT, a decreasing
adjustment can be made for total amount
of VAT including stored input.
Tariff-based goods and services under

previous law, if does not fall under 15%
VAT, no decreasing adjustment shall be
allowed in the VAT return for stored
input.

2.17.03 Treatment for Price declaration
Goods produced before 30 June 2019 but Price declaration is not required for the
supplied after 30 June 2019. sale of goods after 1 July 2019 but
required to submit input-output
coefficient in a prescribed form for all
goods.
2.17.04 Withholding VAT

Withholding VAT in case of supply or Withholding VAT regulations under the
invoice issued or payment made on or VAT and SD Act 2012 shall be followed
after 1 July 2019. including issue of invoice.
Adjustment of Mushak-12Kha which is Shall be considered as decreasing
received on or after 1 July 2019. adjustment in the month of issuance of
the certificate.
2.17.05 Goods supplied at a uniform price

VAT implication on goods supplied at a Unsold goods as on 30 June 2019 shall be
uniform price, all the VAT is deposited at updated on the column of closing stock of
first stage of transaction after considering sales register.
of all subsequent value chain of the goods.
VAT paid on the unsold goods shall be
If such kind of goods supplied before 1
reported in the VAT return of June 2019.
July 2019 but remain unsold after 1 July
2019. A copy of sales register where unsold
goods are recorded shall be submitted
with the VAT return of June 2019. Copy of
that shall be reserved for 5 years.
Output VAT shall not be applicable on

such unsold goods as per section 138 (1)
of new VAT Act.
The stock of these goods shall be ended as

soon as possible.

2.17.06 Settlement of VAT disputes (Appeal)
Appeal was filed under VAT Act 1991, Decreasing adjustment shall be made.
depositing 10% VAT at the time of filing
of appeal and if the appellant is the
winner of the case of appeal, order made
after 30 June 2019.
Appeal was filed under VAT Act 1991, Increasing adjustment shall be made.
depositing 10% VAT at the time of filing
of appeal and if the department is the
winner of the case of appeal, order made
after 30 June 2019.
2.17.07 Construction Contractor

Construction contractor for the contract VAT implication will be as usual
made before 1 July 2019. according to section 33 and 49 of VAT and
SD Act 2012.
2.17.08 Duty drawback claimed to Duty Exemption and Drawback Officer (DEDO)
In case of application submitted for It shall be settled in accordance with the
drawback on or before 30 June 2019. VAT Act 1991.
In case of export made under VAT Act An application shall be made to the
1991 on or before 30 June 2019. Director General, Duty Drawback Officer
(DEDO). The director General shall settle
the case under the VAT Act 1991.
In case of duty drawback claimed on or An application shall have to be submitted
after 1 July 2019. to the Director General, Duty Exemption
and Drawback (DEDO) of the Customs
Division of the national Board of
Revenue. The director General shall settle
the case under the regulation of The
Customs Act, 19639.
2.17.09 Comparison of important provision of VAT Act 1991 and VAT and SD Act 2012
Subject matters The VAT Act 1991 The VAT and SD Act 2012 Remarks
Registration VAT registration was If same types of goods Significant
required to obtained for are supplied form changes
each place of business. different locations with
Central VAT registration maintaining books and
could be obtained by records centrally, central
applying to the VAT VAT registration can be
authority. taken, otherwise VAT
registration is required
for each place eparately.

VAT Person having annual Person having turnover Convenient
registration turnover more than BDT more than BDT 30 for business
threshold 8 million was subject to million is subject to VAT
VAT registration. registration.
Turnover tax Person having turnover Person having turnover Supportive
threshold more than BDT 3 million more than BDT 5 million for small and
to BDT 8 million was to BDT 30 million is medium
subject to turnover tax subject to turnover tax business
registration. registration. enterprise
Exemption No exemption threshold Person having turnover Small

for turnover tax and up to BDT 5 million shall organization
threshold
VAT. not subject to VAT. will be out of
VAT system
Turnover Tax Previously it was 3% Currently, it is 4% Increased tax
burden for
enlisted
person
Advance VAT payment Not required to pay any More realistic
was required through advance VAT. and business
VAT Current
VAT current account, Registered person shall friendly
Account always required to deposit net VAT payable
maintain positive amount at the time of
balance in VAT current submission of monthly
account. VAT return.
Internal Internal transfer was Internal transfer of a Practical
Transfer subject to VAT. centrally registered changes
person is not subject to
VAT.
Price Before selling goods, Price declaration is not Reduces some
declaration price declaration with required. Registered hassle for
maintaining input person is required to supplier of
output co-efficient was submit input output taxable
required to submit to coefficient to the supplies
VAT authority. concerned VAT
authority before selling
of goods.
VAT mechanism was VAT is calculated as Convenient
VAT Input VAT+ Treasury Output VAT-Input for Business
Calculation Deposit-Output VAT. VAT+ Increasing
method Adjustment -Decreasing
adjustment
A commercial importer Trade VAT rate is fixed Trader will
or trader can follow one 5%. There is no scope to not take any
Trade VAT of the following follow standard VAT credit. Hence
mechanisms: rate mechanism. VAT burden
a) Standard VAT rate 15% may increase.

b) At 5% rate
c) Proportional method
Scope of The full amount of VAT There is no specific goods Momentous
withholding was required to be or services for changes in
VAT withhold for 39 services. withholding VAT. withholding
VAT system.
Rather it depends on the
rate of VAT applicable on
supplies.
Amount of Full amount was No VAT shall be required Increased
withholding required to be withhold. to withhold for standard complexity for
VAT VAT rate (15% VAT) of business
supplies. organization
Entire VAT amount is
required to withhold
except 15% VAT or fixed
amount of VAT.
Books and Books and records were Books and records are Eliminate some
records required to be required to be maintained burden of
maintained for 6 years. for 5 years businessman
Submission of There was not option to Time of submission of More business
VAT return extend the time limit to return can be extend up to friendly
submit the monthly VAT 1 month by making
return. application to the
commissioner.
However, for the extension
of period, monthly 2%
simple interest shall be
applicable.
Advance Trade Advance trade VAT was Advance VAT 5% is Will increase
VAT 5% only for the required to pay for all burden for
commercial importer or registered person at the manufacturing
trader. time of import of any organization
goods unless exempt by
any order or notification.
Progress and Progressive and periodic Progressive and periodic Acting to the
periodic supply supply was not supply has been defined current
addressed specifically. clearly in order to address business
continuous supply.
Interest for Monthly 2 % on amount Half yearly 2% on amount May increase
default to that was required to that is required to deduct. the tendency of
deduct or deduct. depositing at
deposit delay to
government
treasury

3.00 Customs Duties
3.01 Changes in definition
3.01.01 Replaced of definition of “export manifest”
Clause (kk) of section 2 has been replaced as follows:
“Export manifest” means an export manifest delivered or transmitted under section 53, to
customs computer system or, in manual form where use of customs computer system is
not available, by the registered user and includes an export cargo manifest; transit cargo
and cargo for transshipment; and advance passenger and crew information, in such
manner and with such particulars as the Board may specify.
3.01.02 Replaced of definition of “import manifest”
Clause (ll) of section 2 has been replaced as follows:
“import manifest” means an import manifest delivered or transmitted under sections 43
& 44, to customs computer system or, in manual form where use of customs computer
system is not available, by the registered user and includes an import cargo manifest;
transit cargo and cargo for transshipment; and advance passenger and crew information,
in such manner and with such particulars as the Board may specify.
3.02 Modification of Section 43
Sub-section (5) has been inserted after the sub-section (4) of section 43. The newly
inserted sub-section is as follows:
(5) The Board may, by notification in the official gazette, specify the procedures for
submitting a complete electronic import manifest by the master of the vessel or his
authorized agent prior to the departure of the vessel from the last port of call.
New proviso has been inserted after the section 44. The newly inserted proviso is as follows:
Provided that the Board may, by notification in the official gazette, specify the
procedures for submitting complete electronic cargo, advance passenger manifest and
crew information by the person-in-charge of an aircraft or his authorized agent prior to
the departure of the aircraft from the last port of call.
Replacement of sub-section (4) has been made. The replaced sub-section is as follows:
(4) Warehoused goods other than the goods mentioned in sub-sections (1), (2A) and (3)
may remain in the warehouse for a period not exceeding six months following the date
of execution of the bond under section 86 in respect of such goods.
3.05 Replacement of “Customs Control and Risk Management”. [Section 197A]
Section 197A has been replaced. The replaced section is as follows:
(1) Subject to the directions of the Board, an officer of Customs may, within his lawful
authority, carry out all the Customs control as he deems necessary.
(2) For the purpose of identifying and evaluating the risks, and developing the necessary

counter-measures thereof, the Customs control, including random check, shall
primarily be based on risk analysis done by using electronic data-processing
techniques, if available, according to the criteria developed at local, national or
international level.
(3) The Board shall establish a Customs Risk Management Unit for conducting the overall
customs risk management including automated risk management. For the purpose of
conducting risk management in a coordinated manner with other government agencies
managing international passenger traffic and controlling goods, cargo or transport a
National Risk Targeting Center shall be created and managed by this Unit.
(4) For the purpose of this section, the Board may appoint required number of customs
officers and staffs and, from time to time, formulate rules and operational procedures.
Explanations. -For the purpose of this section, “Customs control” means measures
applied by officers of customs to ensure compliance with this Act governing the import,
export, transit, transfer and storage of goods and passengers including crew between
Bangladesh and other countries or territories, and the presence and movements of
consignments imported into, and exported from, Bangladesh and in transit.
3.06 Insertion of new section “Non-intrusive inspection”. [Section 197B]
Unless exempted by official order, no consignment shall be cleared from customs control
in any customs port or customs station without electronic scanning, and where electronic
scanning system is not installed or functional, competent authority may allow clearance
of such consignment by performing physical examination.
3.07 Insertion of new section “specialized function unit”. [Section 197B]
For the purpose of this Act, the Board may, by general or special order published in the
official gazette, form one or more specialized functional unit(s) to accomplish special
functions, appoint required number of custom officers and specify duties, procedures and
special allowances for those officers.
3.08 Duty exemption on capital machinery.
SRO-128-Law/2017/14/ Customs, dated: 01 June 2017, regarding duty
exemption of capital machinery has been amended by SRO 144-Law/
2019/13/Customs, dated: 30 May 2019. The following Heading of
SRO-128-Law/2017/14/ Customs have been replaced:
Heading H.S. Code

84.33 8433.20.00, 8433.30.00, 8433.40.00, 8433.51.00, 8433.52.00, 8433.53.00,
8433.59.10, 8433.59.90, 8433.60.00, 8533.90.00
85.01 All H.S. Code (excluding 8501.10.10, 8501.10.90, 8501.20.10, 8501.20.91,
8501.31.90, 8501.40.10, 8501.51.00)
*The End*

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Important Changes Introduced

The Finance Act, 2019

SECTION I : DIRECT TAX

1.33.05 Modiﬁcation in paragraph 59..................................................................................................................... 34

SECTION II: INDIRECT TAXES

2. 15 Carry forward and refund of negative net amount. [Section-68] .................................... 52

3.00 Customs Duties ........................................................................................................................ 61

1 Dhaka North City Corporation, Dhaka South City 5,000

Where in the concerned year the 5% of income tax payable on income

Important Changes Introduced by The Finance Act, 2019 Page | 01

c. ii) Mobile phone operator companies (publicly traded by

e. Not publicly traded banks, insurance companies, ﬁnancial 40% 40%

g. Manufacturing companies of cigarette, bidi, jorda, gul and all 45%

j. A Co-operative society registered under the Co-operative

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Total Income Amount of credit

Period of Exemption Rate of Exemption

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Period of Exemption Rate of Exemption

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Period of Exemption Rate of Exemption

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Provided that in respect of depreciation, only the allowances for normal

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1. Advisory or consultancy service 10% 12%

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1. Manufacturer of cigarette, bidi, chewing tobacco, 1% of the gross receipts

Important Changes Introduced by The Finance Act, 2019 Page | 29

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Sl. No. Amount Rate of deduction of tax

3. Where base amount exceeds taka 50 lakh but does not

6. In case of an industrial undertaking engaged in producing 3%

7. In case of an industrial undertaking engaged in the 0.5%

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Important Changes Introduced by The Finance Act, 2019 Page | 35

1.37 Changes in the form of return of income. [Rule 24]

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II. Service provider:

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2.02.04 Central or unit registration. [Section 5]

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Important Changes Introduced by The Finance Act, 2019 Page | 47

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