Capital gains on the sale of a Bangladeshi company are taxed at 15%. There’s no distinction between short-term and long-term holdings for a corporate taxpayer, and no indexation of cost, so a gain built over 10 years is taxed the same as one built over 10 months.
2 features surprise foreign sellers more than the rate does.
The transfer can be blocked. Where a non-resident makes a capital gain on transferring shares, the authority responsible for the transfer cannot effectuate it until the tax on that gain has been paid. The share register does not move first and settle up later.
Selling the offshore parent may still be taxed here. Transferring shares in a non-resident company counts as transferring an asset situated in Bangladesh where the value of those shares is directly or indirectly attributable to Bangladeshi assets.
We model exit tax positions before a sale is agreed, as part of corporate tax services, alongside what NBR expects each year.
How the gain is calculated
The computation has one feature that catches sellers: it doesn’t start with your sale price.
| Item | |
|---|---|
| A | Full value of consideration for the shares transferred |
| B | Open market value (fair market value) of the shares transferred |
| C | Higher of A or B |
| D | Less: cost of acquisition of the shares |
| E | Less: expenditure incurred solely for the transfer |
| Capital gain = C − D − E |
Line C is the one to plan around. You’re taxed on the higher of what you actually received and what the shares were worth. Selling cheaply to a related party, or at a discount for commercial reasons, doesn’t reduce the tax base.
Fair market value means the price the asset would fetch in the open market. Where that can’t be determined, the Deputy Commissioner of Taxes may determine it.
There’s a further backstop. Where fair value exceeds the value you declared by more than 15% or 25%, the DCT may determine the fair market value or offer to purchase the asset. That second option is unusual by international standards and worth knowing before you file a valuation you can’t support.
Where the sale is to a group company, the valuation also has to survive the arm’s-length test, which is covered in arm’s-length pricing between group companies.
What counts as a transfer, and what doesn’t
Transfer covers sale, exchange, relinquishment, and extinguishment of any title to the asset.
3 situations are outside it:
- Transfer by gift, will, bequest, or an irrevocable trust
- Distribution of company assets to shareholders on winding up
- Distribution on dissolution of a firm or other private association, or on partition of a Hindu undivided family
Notional gains are also excluded. A revaluation to fair market value under IFRS or International Accounting Standards, with no actual transfer, doesn’t create a capital gain.
The offshore sale that lands in Bangladesh
A foreign group selling its Bangladeshi operation often prefers to sell the holding company rather than the Bangladeshi shares. That route is covered.
Transferring shares in a non-resident company is treated as transferring an asset situated in Bangladesh where the value of those shares is directly or indirectly attributable to assets in Bangladesh. Taxability runs under the Offshore Indirect Transfer Rules 2022.
“Indirectly” does the work in that sentence. A 3-layer holding structure doesn’t remove the Bangladeshi asset from the valuation chain, and the rules look through to where the value actually sits.
Raise this early in any group restructuring. The question of where the Bangladeshi value sits is far cheaper to answer before the structure is agreed than after heads of terms are signed.
Why the transfer gets blocked
This is the provision that changes deal mechanics for a non-resident seller.
Where capital gains arise in favour of a non-resident from the transfer of shares in a company, the person or authority responsible for the transfer shall not effectuate the transfer until the tax applicable on the gain has been paid.
In practice that means the tax is a completion item, not a post-completion filing. 2 consequences follow:
- The gain has to be computed and agreed before the share register can be updated
- Funds to pay the tax need to be available at completion, which affects how the consideration is structured and when it’s released
A deal timetable that assumes the tax is settled in the next return will stall at the registry.
The exemption most sellers won’t qualify for
One statutory exemption exists in this area, and it’s narrow.
Capital gains from the transfer of all assets of a partnership firm to a new company incorporated under the Companies Act 1994 are exempt, provided the transfer consideration is invested in the equity of that new company.
Both conditions bind. A partial transfer doesn’t qualify, and taking the consideration out in cash rather than equity doesn’t either. It’s a conversion relief rather than a sale relief.
15% on the gain, 27.5% on the trade
The capital gains rate sits well below the corporate rate on trading profit, which is why the characterisation of a receipt matters.
| Receipt | Rate |
|---|---|
| Capital gain on transfer of a capital asset | 15% |
| Business or trading profit, non-listed company | 27.5%, or 25% on the banking condition |
| Dividend received by a company | 20% |
A company that buys and sells assets as its business is trading, not realising capital gains, and the 15% doesn’t apply. Where the line falls depends on the facts rather than on what the contract calls the transaction. The trading rates, including the banking condition, are in the rate on trading profit.
Land given to a developer
One specific arrangement has its own treatment, and it catches companies holding land.
Where a landowner receives cash, apartments, flats or other consideration from a developer under a registered development agreement in exchange for permitting development, that consideration is a capital receipt. Capital gains tax applies at 15%:
(Total consideration received − cost of acquisition of the land) × 15%
Total consideration includes all benefits received, so flats taken in exchange count at their value rather than at nil.
4 mistakes on a Bangladeshi exit
1. Pricing the deal and then asking about tax
The tax is computed on the higher of consideration and fair market value, and it has to be paid before the transfer completes. Both facts belong in the term sheet.
2. Assuming an offshore share sale is outside Bangladesh
The Offshore Indirect Transfer Rules 2022 reach transfers of non-resident shares whose value is attributable, directly or indirectly, to Bangladeshi assets.
3. Expecting relief for a long holding period
Corporate taxpayers get no short-term or long-term distinction and no indexation. Inflation over the holding period is taxed as gain.
4. Declaring a value you can’t support
Where fair value exceeds the declared value by more than 15% or 25%, the DCT may set the fair market value or offer to purchase the asset outright.
Modelling the exit before you agree the price
We compute the capital gains position, test the valuation against the fair market value rule, and confirm whether an offshore structure brings the transfer inside Bangladeshi charge, before terms are agreed rather than at completion. Where the seller is non-resident, we sequence the tax payment so the share transfer isn’t held at the registry.
For an exit or a group restructuring involving a Bangladeshi entity, talk to our team.
Rates and rules reflect the Income Tax Act 2023 and the Offshore Indirect Transfer Rules 2022 as currently applied. Tax law changes with each Finance Act. Confirm your position with a qualified adviser before agreeing terms.
Frequently asked questions
What is the capital gains tax rate in Bangladesh?
15% on the gain from transferring a capital asset. For corporate taxpayers there is no short-term or long-term distinction and no indexation of cost, so the length of time the asset was held makes no difference to the rate or the computation.
How is the gain calculated when selling shares in a Bangladeshi company?
Take the higher of the consideration received and the open market value of the shares, then deduct the cost of acquisition and any expenditure incurred solely for the transfer. Tax applies at 15% on the resulting gain, whatever the holding period.
Can a non-resident transfer shares before paying capital gains tax in Bangladesh?
No. Where a capital gain arises in favour of a non-resident on a share transfer, the person or authority responsible cannot effectuate that transfer until the applicable tax has been paid. The payment is a completion item, not a later filing.
Is selling an offshore holding company taxable in Bangladesh?
It can be. Transferring shares in a non-resident company counts as transferring an asset situated in Bangladesh where the value of those shares is directly or indirectly attributable to assets in Bangladesh. The Offshore Indirect Transfer Rules 2022 govern the charge.
Are there any capital gains exemptions in Bangladesh?
One narrow relief applies. Gains from transferring all assets of a partnership firm to a new company incorporated under the Companies Act 1994 are exempt, provided the consideration is invested in the equity of that new company. Partial transfers do not qualify.Capital gains on the sale of a Bangladeshi company are taxed at 15%. There’s no distinction between short-term and long-term holdings for a corporate taxpayer, and no indexation of cost, so a gain built over 10 years is taxed the same as one built over 10 months.
2 features surprise foreign sellers more than the rate does.
The transfer can be blocked. Where a non-resident makes a capital gain on transferring shares, the authority responsible for the transfer cannot effectuate it until the tax on that gain has been paid. The share register does not move first and settle up later.
Selling the offshore parent may still be taxed here. Transferring shares in a non-resident company counts as transferring an asset situated in Bangladesh where the value of those shares is directly or indirectly attributable to Bangladeshi assets.
We model exit tax positions before a sale is agreed, as part of corporate tax services, alongside what NBR expects each year.
How the gain is calculated
The computation has one feature that catches sellers: it doesn’t start with your sale price.
| Item | |
|---|---|
| A | Full value of consideration for the shares transferred |
| B | Open market value (fair market value) of the shares transferred |
| C | Higher of A or B |
| D | Less: cost of acquisition of the shares |
| E | Less: expenditure incurred solely for the transfer |
| Capital gain = C − D − E |
Line C is the one to plan around. You’re taxed on the higher of what you actually received and what the shares were worth. Selling cheaply to a related party, or at a discount for commercial reasons, doesn’t reduce the tax base.
Fair market value means the price the asset would fetch in the open market. Where that can’t be determined, the Deputy Commissioner of Taxes may determine it.
There’s a further backstop. Where fair value exceeds the value you declared by more than 15% or 25%, the DCT may determine the fair market value or offer to purchase the asset. That second option is unusual by international standards and worth knowing before you file a valuation you can’t support.
Where the sale is to a group company, the valuation also has to survive the arm’s-length test, which is covered in arm’s-length pricing between group companies.
What counts as a transfer, and what doesn’t
Transfer covers sale, exchange, relinquishment, and extinguishment of any title to the asset.
3 situations are outside it:
- Transfer by gift, will, bequest, or an irrevocable trust
- Distribution of company assets to shareholders on winding up
- Distribution on dissolution of a firm or other private association, or on partition of a Hindu undivided family
Notional gains are also excluded. A revaluation to fair market value under IFRS or International Accounting Standards, with no actual transfer, doesn’t create a capital gain.
The offshore sale that lands in Bangladesh
A foreign group selling its Bangladeshi operation often prefers to sell the holding company rather than the Bangladeshi shares. That route is covered.
Transferring shares in a non-resident company is treated as transferring an asset situated in Bangladesh where the value of those shares is directly or indirectly attributable to assets in Bangladesh. Taxability runs under the Offshore Indirect Transfer Rules 2022.
“Indirectly” does the work in that sentence. A 3-layer holding structure doesn’t remove the Bangladeshi asset from the valuation chain, and the rules look through to where the value actually sits.
Raise this early in any group restructuring. The question of where the Bangladeshi value sits is far cheaper to answer before the structure is agreed than after heads of terms are signed.
Why the transfer gets blocked
This is the provision that changes deal mechanics for a non-resident seller.
Where capital gains arise in favour of a non-resident from the transfer of shares in a company, the person or authority responsible for the transfer shall not effectuate the transfer until the tax applicable on the gain has been paid.
In practice that means the tax is a completion item, not a post-completion filing. 2 consequences follow:
- The gain has to be computed and agreed before the share register can be updated
- Funds to pay the tax need to be available at completion, which affects how the consideration is structured and when it’s released
A deal timetable that assumes the tax is settled in the next return will stall at the registry.
The exemption most sellers won’t qualify for
One statutory exemption exists in this area, and it’s narrow.
Capital gains from the transfer of all assets of a partnership firm to a new company incorporated under the Companies Act 1994 are exempt, provided the transfer consideration is invested in the equity of that new company.
Both conditions bind. A partial transfer doesn’t qualify, and taking the consideration out in cash rather than equity doesn’t either. It’s a conversion relief rather than a sale relief.
15% on the gain, 27.5% on the trade
The capital gains rate sits well below the corporate rate on trading profit, which is why the characterisation of a receipt matters.
| Receipt | Rate |
|---|---|
| Capital gain on transfer of a capital asset | 15% |
| Business or trading profit, non-listed company | 27.5%, or 25% on the banking condition |
| Dividend received by a company | 20% |
A company that buys and sells assets as its business is trading, not realising capital gains, and the 15% doesn’t apply. Where the line falls depends on the facts rather than on what the contract calls the transaction. The trading rates, including the banking condition, are in the rate on trading profit.
Land given to a developer
One specific arrangement has its own treatment, and it catches companies holding land.
Where a landowner receives cash, apartments, flats or other consideration from a developer under a registered development agreement in exchange for permitting development, that consideration is a capital receipt. Capital gains tax applies at 15%:
(Total consideration received − cost of acquisition of the land) × 15%
Total consideration includes all benefits received, so flats taken in exchange count at their value rather than at nil.
4 mistakes on a Bangladeshi exit
1. Pricing the deal and then asking about tax
The tax is computed on the higher of consideration and fair market value, and it has to be paid before the transfer completes. Both facts belong in the term sheet.
2. Assuming an offshore share sale is outside Bangladesh
The Offshore Indirect Transfer Rules 2022 reach transfers of non-resident shares whose value is attributable, directly or indirectly, to Bangladeshi assets.
3. Expecting relief for a long holding period
Corporate taxpayers get no short-term or long-term distinction and no indexation. Inflation over the holding period is taxed as gain.
4. Declaring a value you can’t support
Where fair value exceeds the declared value by more than 15% or 25%, the DCT may set the fair market value or offer to purchase the asset outright.
Modelling the exit before you agree the price
We compute the capital gains position, test the valuation against the fair market value rule, and confirm whether an offshore structure brings the transfer inside Bangladeshi charge, before terms are agreed rather than at completion. Where the seller is non-resident, we sequence the tax payment so the share transfer isn’t held at the registry.
For an exit or a group restructuring involving a Bangladeshi entity, talk to our team.
Rates and rules reflect the Income Tax Act 2023 and the Offshore Indirect Transfer Rules 2022 as currently applied. Tax law changes with each Finance Act. Confirm your position with a qualified adviser before agreeing terms.
Frequently asked questions
What is the capital gains tax rate in Bangladesh?
15% on the gain from transferring a capital asset. For corporate taxpayers there is no short-term or long-term distinction and no indexation of cost, so the length of time the asset was held makes no difference to the rate or the computation.
How is the gain calculated when selling shares in a Bangladeshi company?
Take the higher of the consideration received and the open market value of the shares, then deduct the cost of acquisition and any expenditure incurred solely for the transfer. Tax applies at 15% on the resulting gain, whatever the holding period.
Can a non-resident transfer shares before paying capital gains tax in Bangladesh?
No. Where a capital gain arises in favour of a non-resident on a share transfer, the person or authority responsible cannot effectuate that transfer until the applicable tax has been paid. The payment is a completion item, not a later filing.
Is selling an offshore holding company taxable in Bangladesh?
It can be. Transferring shares in a non-resident company counts as transferring an asset situated in Bangladesh where the value of those shares is directly or indirectly attributable to assets in Bangladesh. The Offshore Indirect Transfer Rules 2022 govern the charge.
Are there any capital gains exemptions in Bangladesh?
One narrow relief applies. Gains from transferring all assets of a partnership firm to a new company incorporated under the Companies Act 1994 are exempt, provided the consideration is invested in the equity of that new company. Partial transfers do not qualify.
