This newsletter covers income tax, VAT and customs changes issued in Bangladesh up to May 2024 under the Income Tax Act 2023 (ITA 2023) and the Customs Act 2023.

Income tax: tax deducted on compensation for property acquired by the Government is again a final discharge of liability, now for individuals only. Reduced tax rates on export income now apply only to export of goods and can no longer support a lower withholding certificate under section 123 of ITA 2023; certificates issued up to 3 March 2024 become invalid. The corporate rate on management fees of asset management companies falls from 27.5% or 30% to 15%. TDS on leather and leather goods exports is cut from 1% to 0.5% until 30 June 2025. Foreign research grants to universities, colleges and research institutions are excluded from income for assessment year 2026-27, and interest earned from Offshore Banking Units by depositors and non-resident lenders is exempt with no time limit. Other items cover advance tax on vehicles owned by government entities and diplomats, charitable spending for assessment year 2023-24, 20% TDS on deposits of local authorities, and TDS on apartments bought from developers.

VAT and customs: advance tax on raw material imports by computer manufacturers is exempted, and the Customs Prearrival Processing Rules 2024 set timeframes and documents for pre-arrival processing.