Bangladesh

Taxable period

The income year in Bangladesh for an individual is 1 July to 30 June.

Tax returns

Individuals are required to file an income tax return in case of the following:

• The taxable income exceeds the tax-free threshold.
• Assessed for any year within the immediately preceding three years.
• Shareholder director or employee of a company, employee in any executive or managerial position, having exempted income or subject to reduced tax rate, partner of a firm, government employee, or any non-resident having a permanent establishment in Bangladesh, etc.
• Required to be registered as a taxpayer.
• Required to furnish Proof of Submission of Return under specified cases.

Individuals are required to file their tax returns within the due date, known as ‘Tax Day’. The due date of filing the income tax return for an individual is the 30th day of November following the end of the income year. In case of failure to file return by the Tax Day, interest is payable at 2% per month on the difference between the tax assessed on the total income and tax already paid or deducted, for the period commencing from the first day immediately following the Tax Day to the date of filing return (where return is filed) or the date of regular assessment (where return is not filed).

The Board has upgraded the e-Return System for the tax year 2024/25, allowing individual taxpayers to file returns online starting from 9 September 2024. The system offers features such as online return preparation, tax payment, and instant proof of filing and requires a Tax Identification Number and a biometric-verified mobile number for registration.

Payment of tax

Final income tax payment will be made on or before the due date of filing of the income tax return.

Moreover, advance tax is required to be paid only if the total income of the last assessed income year is more than BDT 600,000. The taxpayer must pay advance tax during the FY on the basis of estimated income in four instalments: by 15 September (25% of the estimated annual tax liability), by 15 December (25% of the estimated annual tax liability), by 15 March (25% of the estimated annual tax liability), and by 15 June of the tax year (25% of the estimated annual tax liability).

Electronic tax payment is also possible through designated banks or mobile payment applications by generating an A-challan.

Tax audit process

The Board or any authority under the Board is authorised to select returns for audit and send them to the Commissioner of Taxes. The Commissioner of Taxes appoints an inquiry team, an audit team, and an audit curator for each audit case. The Deputy Commissioner of Taxes (DCT) issues a notice to the taxpayer informing her or him of the audit and sends a copy of such notice to the inquiry team. The inquiry team, audit team, and the audit curator undertake the audit procedure. If it is found that the income and assets declared in the return are not accurately reflected and that action should be taken against the taxpayer under any section of the Act, the curator will submit the final audit report along with its recommendations to the DCT to initiate assessment proceedings. However, if the curator finds that all the information in the return is accurate, then the curator will submit his or her report to the Commissioner of Taxes. Based on the report, the Commissioner of Taxes takes a decision, and the DCT informs the taxpayer about the next course of action. The audit process must be completed within two years from the end of the year of selection for the audit.

Statute of limitations

The Board grants a time period of two years from the end of the assessment year to issue a notice for the selection of the audit. The audit is to be completed within two years from the end of the year in which the notice for selection of audit has been issued.

Topics of focus for tax authorities

International taxation is an area witnessing increased attention from the tax authorities. Another area of increased focus of the tax authorities is measures to ensure tax compliance by the taxpayers and increase in the tax base of the country.

Moreover, the tax authorities are also focusing on the implementation of the following:

• Introduction of e-TDS system, under a central WHT unit with a specific number of WHT zones under the central unit.
• Establishing a modern and fully automated tax information unit.
• Mapping the salary mentioned in the work permit with the actual payout made to an individual.