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Fiscal incentives :
Following are fiscal incentives available to a taxpayer:-
a) Tax holiday : Tax holiday is allowed for industrial undertaking, tourist industry and physical infrastructure facility established between 1st July 2008 to 30th June 2011 in fulfillment of certain conditions.
Industrial Undertaking Eligible for Tax holiday :
(i) An industry engaged in production of textile, textile machinery, jute goods, high value garments, pharmaceuticals, melamine, plastic products, ceramics, sanitary ware, steel from iron ore, MS Rod, CI Sheet, fertilizer, insecticide & pesticide, computer hardware, petro-chemicals, agriculture machinery, boilers, compressors, basic raw materials of drugs, chemicals and pharmaceuticals, energy savings bulb, solar energy panel, barrier contraceptive or rubber latex.
(ii) An industry engaged in agro-processing, ship building, diamond cutting. Physical Infrastructure Eligible for Tax holiday: Sea or river port, container terminals, internal container depot, container freight station, LNG terminal and transmission line, CNG terminal and transmission line, gas pipe line, flyover, mono rail, underground rail, telecommunication other than mobile phone, large water treatment plant & supply through pipe line, waste treatment plant, solar energy plant, export processing zone. Tourism Industry Eligible for Tax holiday : Residential hotel having facility of three star or more.
b) Accelerated depreciation: Accelerated depreciation on cost of machinery is admissible for new industrial undertaking in the first year of commercial production 50%, in the second year 30% and in the third year 20%.
c) Income derived from any Small and Medium Enterprise (SME) engaged in production of any goods and having an annual turnover of not more than taka twenty four lakh is exempt from tax.
d) Industry set up in EPZ is exempt from tax for a period of 10 years from the date of commencement of commercial production.
e) Income from fishery (excluding income of a company), poultry, cattle breeding, dairy farming, horticulture, floriculture, mushroom cultivation and sericulture are exempt from tax up to 30th June, 2011, subject to investing at least 10% of the exempted income that exceeds one lakh Taka, in government securities or bonds.
f) Income derived from export of handicrafts is exempted from tax up to 30th June, 2011.
g) An amount equal to 50% of the income derived from export business is exempted from tax.
h) Listed companies are entitled to 10% tax rebate if they declare dividend of 20% or more.
i) Income from Information Technology Enabled Services (ITES) business is exempted up to 30th June, 2011.
(j) Income of a private power generation company subject to to certain conditions included in fulfill conditions lies with private sector power generation policy of Bangladesh is exempted from tax for 15 years form the day of commencement of commercial production.
Avoidance of Double Taxation Agreement :
There are agreements on avoidance of double taxation between Bangladesh and 28 countries which are:-
(1) United Kingdom of Great Britain and Northern Ireland,
(2) Singapore
(3) Sweden
(4) Republic of Korea
(5) Canada (6) Pakistan
(7) Romania
(8) Sri Lanka
(9) France
(10) Malaysia
(11) Japan
(12) India
(13) Germany
(14) The Netherlands
(15) Italy
(16) Denmark
(17) China
(18) Belgium
(19) Thailand
(20) Poland (21) Philippines (22) Vietnam (23) Turkey (24) Norway (25) USA (26) Indonesia (27) Switzerland (28)
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