Capital gains tax
Capital gains tax on the sale of shares of listed companies
Capital gain from the transfer of stocks and shares of public limited companies
listed with the stock exchange except listed Govt. securities:
Particulars Rate
a) For resident companies and firms 10%
b) Capital gain tax of non-resident shareholders (refer to section 5.9) 15%
c) For sponsor shareholders and shareholder directors 5%
d) For resident individuals holding at least 10% of the total share capital
of the company
5%
Capital gains tax on the sale of stocks and shares of public limited companies
listed with the stock exchange in respect of resident individual assessee shall be
exempt from tax unless such residents fall in categories (c) and (d) above.
9.13.6.2 Capital gains tax other than the sale of shares of listed companies
In the case of a company, income from capital gains will be separated from
total income and tax at 15% is payable on such capital gains regardless of the
period of holding of the asset from the date of its acquisition.
In the case of an assessee other than a company, if the asset is transferred
before the expiry of five years from the date of acquisition, the capital gains
will be taxed at the usual rate applicable to the assessee’s total income
including the capital gains. If the asset is transferred at any time after the expiry of
five years from the date of its acquisition, the capital gains will be taxed at the
usual rate applicable to the assessee’s total income including the capital gains
or at the rate of 15% on the number of capital gains whichever of the two is
lower.
Capital gains tax
9.13.7 Tax on dividend/remittance of profit
A company paying dividends shall withhold tax at the rate of 20% on dividend
payable to a company and at 10% (subject to furnishing 12-digit Tax Payer’s
Identification Number) or 15% on dividend payable to a resident individual.
A company paying dividends shall withhold tax at the rate of 30% on dividend
payable to any non-resident individual (other than a company).
If the stock dividend declared or distributed by a listed company exceeds the cash
dividend in any income year, a 10% tax on the whole amount of the stock dividend
will be applicable. Such tax cannot be adjusted with any other tax liability of
the company. The provision is also applicable if any cash dividend is not
declared or distributed in the income year.
A branch company shall withhold tax at the rate of 20% while remitting profit
to Head Office.
However, in cases where the dividend is payable to a shareholder resident in a
a country with which Bangladesh has signed a tax treaty, the rate mentioned in
the tax treaty will apply subject to confirmation/certification from NBR
Further, any distribution from a mutual fund or alternative investment fund
would be subject to tax like dividends declared by a company.
9.13.8 Tax on retained earnings
A company (listed in the stock exchange) shall pay tax at the rate of 10% on the
the total amount transferred to retained earnings or any fund, reserve, or surplus, if
such an amount exceeds 70% of the net profit/income after tax in the income year.
9.13.9 Applicability of tax rates
All rates quoted from 2.1 to 2.6 will apply for the assessment year 2019-2020,
unless stated otherwise.
Tax
9.13.10 Charge of additional tax
The additional tax will be charged to the employer who employs or allows an
individual not being a Bangladeshi citizen to work at his business or profession
without prior approval of BIDA or any other competent Government authority.
This additional tax is higher than 50% of the tax payable on his income or Tk
500,000.
9.13.11 Filing of tax return
Filing of tax returns is compulsory for every person who:
in a fiscal year earns total income from all sources exceeding the minimum
threshold;
was assessed for tax for any one of the three years immediately preceding
that income year;
is a company; or a non-government organization registered with NGO
affairs bureau or co-operative society or a firm or an association or persons
or a shareholder director or shareholder-employee of a company, partner of
a firm, an employee of the government or an authority corporation, body or
units of the government who draws a basic salary of Tk 16,000 or more at
any time during the income year, an employee holding an executive or a
management position in a business or profession; a Micro Credit
Organization having a license with Micro Credit Regulatory Authority; a
non-resident having a permanent establishment in Bangladesh; or
is subject to tax exemption or lower tax rate except not being an institution
established solely for a charitable purpose or a fund;
at any time during the relevant income year fulfills any of the following
conditions:
– owns a motor car, owns membership of a club registered under any law
governing value-added tax.
– runs any business or profession having obtained a trade license from any
City Corporation, pourashava, or /and operates a bank account;
– has registered with a recognized professional body as a doctor, lawyer,
income tax practitioner, chartered accountant, cost and management
accountant, engineer, architect or surveyor, or any other similar profession;
– is a member of a chamber of commerce and industry or trade association;
– Runs for an office of any pourashava, city corporation, or a Member of
Parliament;
– participates in a tender floated by the government, semi-government,
autonomous body or local authority;
– Serves on the board of directors of a company or group of companies;
– Participates in a ride-sharing arrangement by providing the motor vehicle.
However, a return of income shall not be mandatory for-
1. An educational institution receiving government benefits under Monthly
Payment Oder (MPO); or
2. a public university; or
3. a fund; or
4. a non-resident, not being a non-resident individual, having no permanent
establishment in Bangladesh; or
5. a non-resident individual having no fixed base in Bangladesh; or
6. Any class of persons which the Board, by order in the official gazette, exempt
from filling out the return.