A heavily regulated, heavily taxed sector
Telecom operators in Bangladesh work under licences issued by the Bangladesh Telecommunication Regulatory Commission (BTRC) under the Bangladesh Telecommunication Act 2001, while software, fintech and digital service businesses face a mix of tax incentives, Bangladesh Bank rules and sector-specific requirements. Obligations arrive from several directions at once, often through annual budgets and regulatory orders.
The areas below are those we suggest finance and compliance teams monitor continuously. This is general guidance rather than a summary of particular announcements.
Licence conditions and regulatory payments
Licensees should keep a clear record of licence and spectrum fees, revenue sharing and other contributions payable to BTRC, together with the revenue base on which each is calculated. Differences between the operator’s calculation and the regulator’s view can grow into significant claims, so supporting workings should be retained and reviewed each year.
Licence renewals, changes in licensing categories and conditions on infrastructure sharing or quality of service should be tracked by a named owner. Mobile financial services and payment businesses fall under Bangladesh Bank, whose requirements on agents, customer due diligence and settlement need separate monitoring.
Software and IT-enabled service exporters have a different set of obligations. Export receipts should arrive through banking channels with the documentation needed to evidence them as export income, since this record often underpins both foreign exchange compliance and the tax treatment of that income.
VAT, supplementary duty and income tax
Telecom services attract VAT and, for certain services, supplementary duty under the VAT and SD Act 2012, and rates have changed through successive budgets, so billing systems must be updated promptly and tested after each change. Operators must also handle VAT withheld by customers and income tax withheld from vendors. Our VAT and Customs Services support compliance, audits and appeals, and act as VAT agent for non-residents supplying digital services.
For ICT businesses, income tax exemptions under the Income Tax Act 2023 are tied to specific activities and conditions, and claims should be supported by documentation that will stand up at assessment. RRH’s Corporate Tax Services team prepares returns, reviews exemption claims and represents companies in appeals.
Cross-border charges and data
Many technology companies in Bangladesh pay group entities for software licences, brand use, management support and network services. These transactions fall within the transfer pricing provisions of the Income Tax Act 2023 and are an area of attention for the NBR. Our Transfer Pricing Services prepare documentation and benchmarking that support the pricing.
Requirements on data protection and cybersecurity are also developing, and companies should keep their data handling practices under periodic review as those rules take shape.
Related RRH services: VAT and Customs Services, Corporate Tax Services and Transfer Pricing Services.