This August 2024 Tax News Flash sets out the income tax exemptions available to non-coal based private power generation companies in Bangladesh under SRO No. 208 dated 26 June 2023, which extended the benefits of the earlier SROs 211 and 212 of 2013 and SRO 05 of 2020.

Companies starting commercial operation between 1 January 2023 and 30 June 2024 are exempt on power generation income until 30 June 2036, on income of foreign employees for three years from arrival, on interest paid on foreign loans, on royalties, technical know-how and technical assistance fees, and on capital gains from transfer of the company's shares. Companies starting commercial operation between 1 July 2023 and 30 June 2025 receive a reducing exemption on power generation income: 100% for the first five years, 50% for the next three and 25% for the next two.

SRO 247 dated 27 June 2024 amended SRO 208 so that companies already exempt under the repealed SROs 211, 212 and 05 keep those benefits on their original terms. Companies that contracted for gas or RLNG combined cycle plants by 30 June 2022 receive a 10-year exemption from commercial operation on electricity sales income, interest on foreign loans, and technical fees. The note reminds companies to keep proper books and records and to comply with the Private Sector Power Generation Policy of Bangladesh.