A non-listed company in Bangladesh pays 27.5% corporate income tax, dropping to 25% if every transaction runs through a bank transfer. A listed company that floated 10% or more of its paid-up capital pays 22.5%, or 20% on the same banking condition.
Banks, insurers and financial institutions pay 37.5% or 40%. Tobacco and mobile phone operators pay 45%. A branch of a foreign company pays the unlisted rate, then another 20% when it sends profit home.
Those rates hold from assessment year 2026-27 through assessment year 2030-31, so the figure you plan around today stays put for 5 years.
Corporate tax rates in Bangladesh for AY 2026-27
| Category of taxpayer | Tax rate |
|---|---|
| Listed company that issued 10% or more of paid-up capital through an IPO | 22.5%, or 20% if all transactions are through bank transfer |
| Listed company that issued less than 10% of paid-up capital through an IPO | 25%, or 22.5% if all transactions are through bank transfer |
| All other companies, including private limited companies and subsidiaries | 27.5%, or 25% if all transactions are through bank transfer |
| Listed bank, insurance or financial institution (excluding merchant banks) | 37.5% |
| Non-listed bank, insurance or financial institution | 40% |
| Company producing any tobacco item (cigarette, bidi, chewing tobacco, gul) | 45% |
| Non-company taxpayer manufacturing tobacco products | 45% |
| Mobile phone operator, base rate | 45% |
| Mobile operator that becomes listed by offering 10% of paid-up capital through an IPO, with pre-IPO placement not exceeding 5% | 40% |
| Mobile operator transferring at least 20% of paid-up capital through an IPO | 10% rebate on tax payable in the year of transfer |
| Association of persons, trust, firm | 27.5% |
| Cooperative society registered under the Cooperative Societies Act 2001 | 20% |
| Private university, private medical, dental or engineering college, or a college teaching only information technology | 5% |
Nearly every foreign-owned company we register sits in the 27.5% band. A private limited company and a subsidiary are taxed identically, because a subsidiary is a private limited company with a corporate shareholder. If you’re still choosing a structure, compare the types of company registration before you model the tax.
The banking condition that cuts your rate by 2.5 points
Every rate in the table has a lower figure attached to it, and the condition is the same in each case: all transactions must go through bank transfer.
For a company sitting at 27.5%, meeting that condition moves you to 25%. On BDT 1 crore of taxable profit, that’s BDT 2.5 lakh saved for doing something you should be doing anyway.
The condition covers receipts as well as payments. Cash sales, cash wages, cash vendor settlements, petty cash purchases above the prescribed limits, all of it counts against you. We see companies lose the reduced rate over a handful of cash transactions they never thought about at the time.
Build the banking discipline into your accounting policy from month 1, not at year end when the auditor asks.
Assessment year or income year: which one is your rate?
This trips up almost every foreign investor, and it’s worth 2 minutes of your attention.
Your income year is the 12 months you earned the money in. The standard income year in Bangladesh runs 1 July to 30 June.
Your assessment year is the year you’re assessed and taxed in, and it starts on 1 July after your income year ends.
So income earned between 1 July 2025 and 30 June 2026 falls in assessment year 2026-27. A company on a calendar income year of 1 January 2025 to 31 December 2025 also sits in assessment year 2026-27.
When somebody quotes you a rate “for 2026-27”, ask which one they mean. In this instance the answer doesn’t change the number, because the same rates run from AY 2026-27 to AY 2030-31. In years when rates move, the distinction decides what you actually pay.
A subsidiary or branch of a foreign company can apply to the NBR (National Board of Revenue) for a different income year that matches its parent’s financial year. Worth doing if your group consolidates on a December year end.
Whichever year end you run, the filing obligations that follow it are set out in private limited company compliance.
What a branch office actually pays
A branch of a foreign company is taxed at the rate applicable to an unlisted company, so 27.5%, or 25% on the banking condition. The same rate as a subsidiary.
The difference comes when the money leaves. Remitting after-tax branch profit to head office attracts a branch profit remittance tax of 20% on the amount remitted. Your authorised dealer bank won’t release the remittance until that tax is deposited.
Run the arithmetic on BDT 100 of branch profit:
- Corporate tax at 27.5% leaves BDT 72.50
- Remitting all of it attracts 20%, another BDT 14.50
- BDT 58 reaches head office, an effective burden of 42%
A subsidiary distributing the same profit as a dividend faces dividend withholding instead, which for most foreign parents lands lower and can be reduced further under a tax treaty. This is one of the stronger arguments for incorporating rather than opening a branch, and it rarely appears in the comparison tables foreign investors read before they decide.
Before committing either way, look at what branch office setup involves and what it costs to run.
A branch also files quarterly activity reports with BIDA on top of its tax obligations, which is a separate schedule set out in branch office compliance.
Minimum tax applies even in a loss year
Making no profit doesn’t mean paying no tax. If the tax on your business income comes to less than the turnover tax below, the turnover tax applies to gross receipts regardless of whether you made a profit or a loss.
| Class of taxpayer | Minimum tax on gross receipts |
|---|---|
| Manufacturer of cigarettes, bidi, chewing tobacco, smokeless tobacco or other tobacco products | 3% |
| Carbonated or sweetened beverages | 2.5% |
| Mobile phone operator, NTTN | 1.5% |
| Any other case | 1% |
| Manufacturing undertaking, first 3 income years from commercial production | 0.2% |
That 0.2% concession for new manufacturers matters if you’re setting up a factory. It runs for the first 3 income years from the start of commercial production, which is exactly the window when a plant is absorbing cost and reporting losses.
Some activities sit outside turnover tax entirely: commission business, delivery order business, money exchange, trading in gold, silver, gems, diamonds or platinum, and the import, distribution or open-market sale of fertiliser and seeds of daily necessities by a government agency or state-owned corporation.
Turnover tax paid above your regular liability isn’t lost. Carry it forward and set it against a later period’s regular tax.
Finding your rate in 4 questions
- Is your company listed on a Bangladeshi exchange? Almost certainly no if you’re a foreign-owned private limited company or subsidiary. Go to the 27.5% row.
- Are you a bank, insurer or financial institution? If yes, 37.5% listed or 40% unlisted, and nothing below applies to you.
- Do you manufacture tobacco, or operate a mobile network? If yes, 45%.
- Does every transaction run through a bank? If yes, take 2.5 points off your rate. If you’re not certain, assume no until your auditor confirms it.
For most of our clients the answer is 27.5%, or 25% with clean banking.
3 mistakes that cost real money
1. Budgeting at the reduced rate before earning it
The 25% figure is conditional, not standard. Companies model cash flow at 25%, then discover at assessment that cash transactions pushed them to 27.5%. Model at the higher rate and treat the saving as upside.
2. Forgetting minimum tax in the startup years
A company burning cash in year 1 still owes 1% of gross receipts if that exceeds its calculated tax. Foreign parents funding a loss-making subsidiary regularly leave this out of the budget.
3. Treating the branch remittance tax as optional
It isn’t a filing formality. The bank blocks the outward remittance until the 20% is paid, so a branch that hasn’t planned for it finds its profit stuck in Dhaka.
Where rates meet deadlines
Knowing your rate is half the job. The other half is paying advance tax on time in 4 quarterly instalments, then filing the annual return, which is where the interest charges bite. We manage both sides for clients under the KAC Corporate Compliance Architecture.
Every statutory date for the year sits in the Bangladesh compliance calendar.
If you haven’t incorporated yet, how to register a company in Bangladesh walks through the RJSC process end to end.
Get your tax position modelled before you commit
We’ve advised foreign investors on Bangladeshi entry structures since 2012, and the rate on the page is rarely the whole answer. Repatriation route, treaty position, minimum tax exposure and the banking condition all move the effective number.
Send us your structure and expected revenue and we’ll model the effective rate for both a subsidiary and a branch. See corporate tax services, or talk to our team.
Rates stated are those applicable for assessment years 2026-27 to 2030-31. Tax law changes with each Finance Act. Confirm your position with a qualified adviser before filing.
Frequently asked questions
What is the corporate tax rate in Bangladesh for a private limited company?
27.5% for a non-listed private limited company, reduced to 25% where all transactions are made through bank transfer. A subsidiary of a foreign company is taxed at the same rate, since it’s a private limited company with a corporate shareholder rather than a separate category.
Is the corporate tax rate different for a foreign-owned company in Bangladesh?
No. A foreign-owned subsidiary pays the same 27.5% as a locally owned private limited company. Residence, not ownership, determines the rate. A branch of a foreign company also pays 27.5%, plus a 20% branch profit remittance tax when profit is sent abroad.
How do I qualify for the reduced 25% corporate tax rate?
Every transaction, both receipts and payments, must be routed through bank transfer. Cash sales, cash wages and cash vendor payments break the condition and return you to 27.5%. The test applies across the whole income year, so the discipline has to start from day 1.
What is the minimum tax if my company makes a loss in Bangladesh?
Minimum tax is 1% of gross receipts for most businesses, payable whether you profit or not. Manufacturers pay 0.2% for their first 3 income years from commercial production. Tobacco pays 3%, beverages 2.5%, and mobile operators 1.5% of gross receipts.
What is the difference between assessment year and income year in Bangladesh?
Your income year is when you earned the money, normally 1 July to 30 June. The assessment year begins on 1 July after that income year ends. Income earned from 1 July 2025 to 30 June 2026 is assessed in assessment year 2026-27.
