Bangladesh: Income tax, VAT measures in Finance Act 2021

Corporate and individual income tax and value added tax measures in Finance Act 2021

Corporate and individual income tax and value added tax measures in Finance Act 2021

The Finance Act 2021 includes corporate and individual income tax and value added tax (VAT) measures.

  • With regard to the rate of corporate income tax, the legislation reflects:
  • A decrease from 32.5% to 30% for non-listed companies
  • A decrease from 25% to 22.5% for listed companies
  • A decrease from 32.5% to 30% for associations of persons
  • A decrease from 32.5% to 25% for a one-person company

Among the VAT-related measures are:

  • A new definition for mobile banking services
  • Repeal of the liability of VAT agents of non-residents
  • Amendments to the input VAT mechanism
  • A reduction of the advance VAT rate and changes to the withholding VAT payment rules
  • New VAT exemptions for manufacturers and extensions of VAT exemptions for certain manufacturers

Read a July 2021 report [PDF 1.8 MB] prepared by the KPMG member firm in Bangladesh

 

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