Income Tax Act 2023 (New)

The Income Tax Act 2023 (effective 1 July 2024) replaced the Income Tax Ordinance 1984, modernising Bangladesh's direct tax regime after 40 years. Key changes from the 1984 Ordinance: (1) reduced corporate tax rates — non-RMG manufacturers from 30% to 28.5%, RMG exporters retained at 12% (with documentation), (2) introduction of Alternative Minimum Tax (AMT) at 0.6% of turnover for companies with gross receipts above BDT 50 crore, (3) capital gains tax rationalised to 15% for assets held 5+ years, (4) tax holiday for greenfield industries in priority sectors extended to 10 years, (5) simplified return filing via online portal (e-TIN), (6) withholding tax rationalised — fewer rates, broader base, (7) transfer pricing regulations strengthened to align with OECD BEPS Action 13, (8) GAAR (General Anti-Avoidance Rules) introduced. For exporters, the Act maintains the lower corporate tax rate of 12% for documented RMG exporters (vs 28.5% for non-RMG manufacturers). The Act also introduces a 10% tax on royalty income from intellectual property (to encourage IP development).