Bangladesh: Tax relief measures (COVID-19)

Bangladesh: Tax relief measures (COVID-19)

Governmental agencies announced tax relief and economic relief measures in response to the coronavirus (COVID-19) pandemic.

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The Bangladesh Bank announced a moratorium on loan payments until 30 June 2020 (meaning borrowers will not be in default of their loans during this period). The government announces details of a stimulus package for export-oriented industries, including assistance towards salaries and funding of two-year loans to factory owners at a 2% interest rate.

The following tax relief measures are provided.

  • No import taxes on medical and protective items until 30 June 2020
  • Exemptions or incentives available to power generating companies (other than coal-based energy companies) if commercial production starts during the period 1 January 2020 to 31 December 2022:
    • Income of PPGC is exempt up to 31 December 2034
    • Income of foreign nationals is exempt for three years
    • Interest payment on foreign loans can be paid off without imposition of withholding tax
    • Fees paid for royalties, technical know-how, and technical assistance can be made without withholding tax
    • Capital gains arising from divestment is exempt
  • If commercial production starts during the period 1 January 2023 to 31 December 2024, a 100% exemption from tax if available for the first five years, and then a 50% exemption for the next three years followed by a 25% exemption for the next two years for a total of 10 years of some type of exemption.
  • The withholding tax rate on export cash subsidy is reduced from 10% to 5%.


Read an April 2020 report prepared by KPMG International

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