Tax Aid BD

📢 Important Update for Finance Professionals & Businesses in Bangladesh

FRC Bangladesh moves towards adoption of new IFRS standards — Are you ready?

The Financial Reporting Council (FRC) Bangladesh is strengthening the financial reporting framework by adopting newer IFRS requirements, bringing significant changes for companies preparing financial statements under IFRS.

🔹 IFRS 18 – Presentation and Disclosure in Financial Statements
✅ New structure for Statement of Profit or Loss
✅ Clearer classification of operating, investing & financing activities
✅ Enhanced disclosure requirements

🔹 IFRS 19 – Simplified Disclosures for Eligible Subsidiaries
✅ Reduced disclosure burden while maintaining IFRS recognition & measurement principles

🔹 IFRS S1 & IFRS S2 – Sustainability & Climate-related Disclosures
✅ Reporting on sustainability-related risks
✅ Climate-related financial information
✅ Greater transparency for stakeholders

📌 What does this mean for businesses?
✔ Financial reporting formats may need revision
✔ Finance teams need to review accounting policies
✔ ERP/SAP reporting structures may require updates
✔ Sustainability data collection will become more important

For CFOs, Finance Managers, Accountants and Audit Professionals — this is the time to understand the upcoming changes and prepare your organization.

📊 IFRS compliance is no longer only about numbers — it is about transparency, governance and future readiness.

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📢 Income Tax Update (Proposed): Initial Exemption Limit for Individual & HUF Taxpayers

The proposed changes in the initial tax exemption (non-taxable income) threshold for individual and HUF taxpayers across different assessment years are as follows:

🧾General Taxpayer
AY 2026-27 & 2027-28: Tk. 375,000
AY 2028-29 & 2029-30: Tk. 400,000
AY 2030-31: Tk. 450,000

👩‍🦳Women & Senior Citizens (65+)
AY 2026-27 & 2027-28: Tk. 425,000
AY 2028-29 & 2029-30: Tk. 450,000
AY 2030-31: Tk. 500,000

🏳️‍🌈Third Gender
AY 2026-27 & 2027-28: Tk. 500,000
AY 2028-29 & 2029-30: Tk. 525,000
AY 2030-31: Tk. 575,000

♿Physically Challenged Persons
AY 2026-27 & 2027-28: Tk. 500,000
AY 2028-29 & 2029-30: Tk. 525,000
AY 2030-31: Tk. 575,000

🎖️Gazetted War-Wounded Freedom Fighters & July Warriors
AY 2026-27 & 2027-28: Tk. 525,000
AY 2028-29 & 2029-30: Tk. 550,000
AY 2030-31: Tk. 600,000

📌 Additional Note:
If a parent/legal guardian of a physically challenged dependent is an assessee, an additional exemption of Tk. 50,000 will be applicable (subject to conditions).

📊 Stay updated with the latest tax changes to plan your finances better.

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📢 Important Tax Rebate Update

The Government has recognized 11 organizations as public welfare institutions under the Income Tax Act, 2023.

Donations or contributions made by an individual taxpayer to these approved institutions will be eligible for tax rebate benefits under the applicable provisions of the Income Tax Act, 2023.

✅ Effective from: 01 July 2026
✅ Valid up to: 30 June 2030

Recognized organizations include:
✔ ASHIC – Foundation for Childhood Cancer
✔ Bangladesh Cancer Aid Trust (BANCAT)
✔ Al-Markazul Islami
✔ Disabled Child Foundation (DCF)
✔ Mawna Diabetes Association
✔ Bangladesh Thalassemia Society
✔ Autism Welfare Foundation
✔ BRAC
✔ Sherpur Diabetic Society
✔ Ramakrishna Math & Ramakrishna Mission, Dhaka
✔ Chattogram Maa-O-Shishu Hospital

📌 Tax Tip:
If you are planning charitable donations, make sure the organization is approved under the relevant tax provisions to claim available tax benefits.

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VAT Guidelines for Online Sale of Goods Services

Background:
"Online Sale of Goods" (Service Code S099.60), as defined under SRO No. 186-Law/2019, covers two business models:

1. Online Retail Sale – An online seller purchases goods (with VAT already paid) from manufacturers/suppliers and resells them to customers via an electronic network, without maintaining a physical sales outlet.

2. Marketplace – A digital platform where multiple sellers list products/services and complete transactions, but the platform operator never takes ownership of the goods and has no sales outlet of its own.

Key Guidelines-
1. Online Retail Sellers (Sales Channel Model):

These businesses procure both taxable and VAT-exempt goods and act as a delivery/sales channel to end consumers. If VAT (and supplementary duty, where applicable) was already paid at the time of procurement from the original manufacturer/supplier, and the goods are resold to the consumer at the same price, VAT does not need to be paid again on the full value (to avoid double taxation) — provided the seller retains proof of tax payment (VAT challan or treasury challan copy).

2. Trade Margin VAT and Compliance Simplification:

The standard 7.5% trade margin VAT rate (per the Third Schedule, Para 3) applies to online retail sellers, as it does to other traders. Under Section 15, a registered person may opt to pay VAT at the standard 15% rate instead of the reduced/specific rate. Given the impracticality of submitting Input-Output Coefficient Declarations (Mushak-4.3) due to the large number of products handled, online retail sellers are exempted from the mandatory submission of Mushak-4.3 for this service.

3. Marketplaces:

Since marketplaces merely facilitate transactions (without owning, pricing, or selling the goods themselves), 15% VAT applies only to the service charge/commission they receive — not to the value of goods sold. This 15% VAT on commission applies even when the underlying goods are VAT-exempt under the First Schedule (e.g., vegetables, fish, rice, pulses, meat), because the online sale service itself is not exempt — only the goods may be. Marketplaces are not required to retain VAT/treasury challan copies for transactions, but are legally obligated to provide buyer/seller transaction data to VAT officials upon request.

4. General Rule on Commission/Service Fees:

Regardless of whether the goods supplied are taxable or VAT-exempt, 15% VAT is applicable on the commission/service value earned by online sales platforms for delivering goods to customers.

5. Important Proviso If applicable VAT on the procurement of goods/services by an online sales entity has not been paid up to the point of supply, then VAT at the applicable rate must be collected on the total amount paid by the buyer/consumer — i.e., the combined value of the goods/services and the online service charge.

⚠️ This is a general summary for informational purposes only. For compliance decisions, please refer to the original NBR order.

📄 Source: NBR General Order No. 05/VAT/2026, VAT Wing, dated 7 June 2026.

# # General Tax Rebate (Simplified) # #

An individual taxpayer (resident or non-resident) can get a tax rebate on eligible investments and expenditures made during the income year.

The rebate is the lowest of the following:
-3% of total income (A)
-15% of eligible investment/expenditure (B)
-Tk. 10,00,000

Where:
*A = Total income excluding tax-exempt income, reduced tax rate income, and minimum tax income
*B = Total eligible investments and expenditures during the income year

An example is give below for your easy understanding:
Total income (A) = Tk. 20,00,000
Eligible investment (B) = Tk. 6,00,000

Calculation:
3% of A = Tk. 60,000
15% of B = Tk. 90,000
Maximum limit = Tk. 10,00,000

👉 Tax rebate = Tk. 60,000 (lowest amount)

# Important Reminder for Individual Taxpayers #

The current income year is ending soon. If you are planning to make any eligible investments or expenditures to claim a tax rebate, it is important to complete them within the current income year.

For taxpayers following the July–June income year, 30 June 2026 is the last date to make eligible investments and expenditures that can be considered for tax rebate in the upcoming tax return.

Any eligible investment made after this date will generally be considered for the next income year, subject to applicable tax laws.
To make the most of the available tax benefits, taxpayers are encouraged to review their investment plans and complete any intended investments before the end of June 2026.

📢 Income Tax Rates for Individual Taxpayers (Tax Year 2026-27 & Tax Year 2027-28) – Bangladesh

✅ Tax-Free Income Limit (General Individual Taxpayer): BDT 375,000

📊 Tax Slabs:
• First BDT 375,000 – Nil
• Next BDT 300,000 – 10%
• Next BDT 400,000 – 15%
• Next BDT 500,000 – 20%
• Next BDT 2,000,000 – 25%
• Remaining Income – 30%

🎯 Higher Tax-Free Limits:
• Women & Senior Citizens (65+) – BDT 425,000
• Third Gender & Persons with Disabilities – BDT 500,000
• Gazetted War-Wounded Freedom Fighters & Gazetted July 2024 Movement Injured Fighters – BDT 525,000

👨‍👩‍👧 Additional Benefit:
Parents/legal guardians of a person with disability can enjoy an extra tax-free limit of BDT 50,000 per disabled child/dependent.

⚠️ Minimum Tax:
• Regular taxpayers: BDT 5,000
• New taxpayers: BDT 1,000

Note: If taxable income exceeds the tax-free threshold, the applicable minimum tax must be paid even if tax rebates reduce the final tax liability to zero.