Preparing and submitting a company tax return in Bangladesh involves more than simply reporting the profit shown in the financial statements. A company must first determine its taxable income under the Income Tax Act, 2023, make the necessary tax adjustments, calculate its income tax liability, adjust tax deducted or collected at source and advance tax, pay any remaining tax payable, and then submit the prescribed income tax return together with the required documents.

The Finance Act, 2026 has introduced several important changes to Bangladesh’s income tax system, including changes to corporate tax rates, the treatment of turnover tax, and the time limit for filing income tax returns.

This article explains the practical process of preparing and submitting a company income tax return in Bangladesh, with reference to the relevant provisions of the Income Tax Act, 2023.

What is a Company Under the Income Tax Act, 2023?

Before discussing the company tax return, it is important to understand what constitutes a “company” for income tax purposes.

Under section 2(31) of the Income Tax Act, 2023, “company” means a company as defined in the Companies Act, 1994 and also includes a much wider range of entities.

The definition includes, among others:

• A company incorporated under the Companies Act, 1994;
• A liaison office, representative office or branch office of a foreign institution;
• A permanent establishment of a foreign entity or person;
• An association or body incorporated outside Bangladesh;
• Banks, insurance bodies and finance companies;
• Industrial and commercial organizations;
• Foundations and societies;
• Cooperative societies;
• Educational institutions;
• Organizations registered with the NGO Affairs Bureau or Microcredit Regulatory Authority;
• Certain firms, associations of persons and joint ventures where a company or foreign entity is involved;
• Statutory government authorities;
• Local authorities;
• Autonomous bodies;
• Entities established or constituted under any law; and
• Other entities covered by the statutory definition.

Therefore, the term “company” for income tax purposes is broader than simply a private limited company or public limited company incorporated in Bangladesh.

What Is a Company Tax Return?

A company tax return is the prescribed statement submitted to the income tax authority containing information about the company’s income, taxable income, tax liability, tax deducted or collected at source, advance tax and other relevant information for an income year.

The return is prepared based on the company’s financial statements, but the taxable income must be determined according to the provisions of the Income Tax Act, 2023.

This distinction is important.

Accounting profit is not necessarily the same as taxable income.

For example, a company may record depreciation, provisions, entertainment expenses, promotional expenses, foreign travel expenses or other expenses in its financial statements. Some of these expenses may be fully deductible, partially deductible or not deductible at all for income tax purposes.

Therefore, the company must prepare a proper tax computation before completing its income tax return.

Need assistance with preparing and submitting Company Income Tax Return in Bangladesh? Our professional team can assist you with accurate corporate income tax return preparation and timely submission. Contact us at +880 1677 970763 (Call & WhatsApp) or email ferdous@fmgaccountants.com.

Income Year and Assessment Year

The first step is to identify the relevant income year and assessment year.

Under section 2(15), the income year generally means the financial year immediately preceding the assessment year.

For most companies, the income year generally runs from 1 July to 30 June.

For example:

Income Year: 1 July 2025 to 30 June 2026

Assessment Year: 2026-2027

There are special rules for banks, insurance companies and finance companies. A subsidiary or holding company connected with a foreign parent company may also, with the approval of the Deputy Commissioner of Taxes, be permitted to follow a different 12-month financial year where necessary for consolidation with its foreign parent.

Step 1: Prepare and Finalize the Company’s Financial Statements

The tax return preparation process should begin after the company’s accounting records have been finalized.

A company should prepare its financial statements in accordance with applicable accounting standards and relevant laws in Bangladesh.

The company should normally have the following records available:

• Trial balance;
• General ledger;
• Statement of profit or loss;
• Statement of financial position;
• Cash flow statement;
• Statement of changes in equity;
• Notes to the financial statements;
• Fixed asset register;
• Inventory records;
• Bank statements and reconciliations;
• Receivables and payables schedules;
• Payroll records;
• Details of loans and finance costs;
• Related-party transaction details; and
• Other supporting accounting records.

For companies required to have their accounts audited, the audited financial statements are an important part of the tax return documentation.

Step 2: Determine Income From Business Under Section 45

For most companies, business income is the primary component of taxable income.

Section 45 of the Income Tax Act, 2023 provides the framework for determining income from business.

It includes profits and gains from a business carried on, or deemed to be carried on, by the assessee during the income year.

The provision also covers certain other amounts, including income from trade or professional associations, benefits arising from business relationships, management fees, certain leasing income, realized foreign exchange gains and income from discontinued business.

A company should therefore review its revenue and other business-related receipts to determine whether they are properly included in income from business under the Act.

Step 3: Consider Special Rules Under Section 46

Section 46 contains special rules relating to certain business income.

For example, the section provides special treatment for gains and losses arising from the disposal of business assets.

Depending on the relationship between the sale proceeds, acquisition cost and written-down value of an asset, part of the amount may be treated as income from business and, in certain circumstances, part may be treated as capital gains.

The section also contains rules concerning insurance, salvage and compensation received in relation to business assets.

This is one reason why the tax computation should not simply reproduce the accounting profit.

Step 4: Apply Special Rules for Certain Businesses Under Section 47

Section 47 provides special rules for certain types of businesses.

For example, special provisions apply to:

• Insurance business; and
• Extraction or exploration of natural gas, petroleum or other mineral resources.

The relevant schedules to the Income Tax Act must also be considered where these provisions apply.

Companies operating in these sectors should therefore prepare their tax computations separately from a standard corporate tax computation.

Step 5: Consider Speculation Business Under Section 48

Where a company carries on speculation business, section 48 treats the speculation business separately for income tax purposes.

This is important when calculating:

• Profit from speculation business;
• Loss from speculation business;
• Set-off of losses; and
• Carry-forward of losses.

A company should therefore identify any speculation-related transactions separately in its tax computation.

Need assistance with preparing and submitting your Company Income Tax Return in Bangladesh? Our professional team can assist you with accurate corporate income tax return preparation and timely submission. Contact us at +880 1677 970763 (Call & WhatsApp) or email ferdous@fmgaccountants.com.

Step 6: Determine Allowable Business Expenses Under Section 49

One of the most important parts of preparing a company tax return is determining which business expenses are deductible.

Under section 49, expenditure incurred wholly and exclusively for the purpose of the business may generally be allowed as a deduction, subject to the specific provisions and restrictions of the Act.

Depending on the nature of the business, allowable expenses may include:

• Cost of raw materials;
• Customs duties;
• Rent;
• Repairs and maintenance;
• Insurance;
• Electricity and utilities;
• Fuel;
• Transportation;
• Clearing and forwarding expenses;
• Commission and brokerage;
• Advertising expenses;
• Employee training expenses;
• Business travel;
• Legal and professional fees;
• Audit fees;
• Telephone and internet expenses;
• Interest and finance costs, subject to applicable restrictions;
• Royalties and technical fees, subject to applicable provisions; and
• Other expenses incurred for business purposes.

However, an expense being recorded in the financial statements does not automatically mean that it is fully deductible for income tax purposes.

The tax treatment of each significant expense should therefore be reviewed against the Income Tax Act.

Step 7: Apply Special Allowances Under Section 50

Section 50 provides for certain special deductions in computing business income.

These may include:

• Depreciation;
• Initial depreciation;
• Accelerated depreciation, where applicable;
• Amortization;
• Research and development expenditure;
• Certain losses relating to depreciable assets; and
• Other deductions specifically permitted under the Act.

Depreciation for tax purposes should be calculated according to the provisions of the Third Schedule, rather than simply adopting the depreciation charged in the financial statements.

Therefore, a company will often need to make a tax adjustment between:

Accounting depreciation

and

Tax depreciation under the Income Tax Act.

Step 8: Review Bad Debts Under Section 51

Bad debts require particular attention when preparing a company tax return.

Under section 51, a bad debt deduction is allowed subject to the conditions prescribed by the Act.

The company should verify whether:

• The debt is genuinely irrecoverable;
• The debt has been properly written off;
• The relevant income was previously taken into account for tax purposes; and
• Other statutory conditions have been satisfied.

Banks and finance companies are subject to specific rules in relation to bad debts and provisions.

Step 9: Review Interest Expenses Under Section 52

Interest paid on borrowed capital used for business purposes may generally qualify as an allowable business expense, subject to the provisions of the Act.

However, if borrowed funds are used partly for non-business purposes, the corresponding portion may not be deductible.

A company should therefore maintain proper documentation for:

• Bank loans;
• Inter-company loans;
• Working capital facilities;
• Interest expenses;
• Loan agreements; and
• Utilization of borrowed funds.

Step 10: Interest Paid to Associated Enterprises Under Section 53

Companies making interest payments to associated enterprises should pay particular attention to section 53.

Where interest is paid to an associated enterprise, the relevant statutory restrictions and transfer pricing provisions should be considered.

This is particularly important for multinational companies and companies receiving financing from:

• Foreign parent companies;
• Group companies;
• Associated enterprises; or
• Other related parties.

The company should also consider whether the transaction falls within the transfer pricing provisions of the Income Tax Act.

Step 11: General Conditions for Deductions Under Section 54

Even where an expense appears to be a normal business expense, the company must consider the conditions prescribed under section 54.

The basic principle is that an expenditure must satisfy the relevant statutory requirements before it can be allowed as a tax deduction.

A company should therefore distinguish between:

Accounting expense

and

Tax-deductible expense.

This distinction is fundamental to preparing an accurate company tax computation.

Step 12: Identify Expenses Not Allowed as Deduction Under Section 55

Section 55 is one of the most important provisions for corporate tax return preparation because it identifies various expenses that may not be allowed as deductions or may be subject to restrictions.

Common areas requiring review include:

• Expenses where applicable withholding-tax requirements have not been complied with;
• Certain payments to shareholder-directors;
• Employee perquisites exceeding statutory limits;
• Royalty and technical service fees exceeding prescribed limits;
• Head-office expenses;
• Overseas travel expenses;
• Entertainment expenses;
• Promotional expenses;
• Certain payments not made through the prescribed banking channel;
• Personal or non-business expenses;
• Capital expenditure;
• Unsupported expenses;
• Certain impairment losses; and
• Other expenses specifically restricted by the Act.

Why Section 55 Is Important

Suppose a company has accounting profit of BDT 20 million and records BDT 2 million as an expense.

If BDT 500,000 of that expense is not deductible under section 55, the company cannot simply use the accounting profit of BDT 20 million as its taxable income.

The tax computation may instead require:

Accounting profit = BDT 20,000,000

Add: Disallowed expense = BDT 500,000

Adjusted taxable profit = BDT 20,500,000

The actual tax computation will depend on all applicable provisions and adjustments.

Step 13: Consider Special Business Income Under Section 56

Section 56 deals with certain amounts arising from expenditure that has been disallowed under specified provisions.

Certain disallowed expenditure may be treated as special business income.

This is different from simply adding back an expense to accounting profit. The company should therefore examine whether section 56 applies when making adjustments under section 55.

Step 14: Consider Other Heads of Income

A company’s taxable income is not necessarily limited to business income.

Under section 30, income is classified under different heads, including:

1. Income from employment;
2. Income from rent;
3. Income from agriculture;
4. Income from business;
5. Income from capital gains;
6. Income from financial assets; and
7. Income from other sources.

For a company, other taxable income may include:

• Interest income;
• Dividend income;
• Rental income;
• Capital gains;
• Royalties;
• Technical service fees;
• Income from financial assets; and
• Other income.

The company should therefore identify all sources of income before determining its total taxable income.

Step 15: Calculate Capital Gains

Where a company disposes of capital assets, it should consider the provisions relating to capital gains.

The tax treatment of a gain or loss depends on the nature of the asset and the specific provisions applicable to the transaction.

The company should therefore separately review:

• Sale of land;
• Sale of buildings;
• Sale of shares;
• Sale of securities;
• Disposal of other capital assets; and
• Other transactions involving capital assets.

The relevant provisions of the Income Tax Act should be applied before including the resulting amount in the tax computation.

Step 16: Calculate Income From Financial Assets

Companies frequently receive income from financial assets.

Examples include:

• Bank interest;
• Interest on loans;
• Dividend income;
• Interest/profit on securities;
• Sanchaypatra income, where applicable; and
• Other financial returns.

The company should reconcile these amounts with:

• Bank statements;
• Tax deduction certificates;
• Investment statements; and
• Other supporting documents.

Tax deducted at source on these receipts should also be reconciled with the company’s tax records.

Step 17: Set Off and Carry Forward Tax Losses

A company may have a tax loss in one or more years.

However, a tax loss is not necessarily available for set-off against every type of income.

The company should determine:

• The nature of the loss;
• The year in which the loss arose;
• Whether the loss can be set off against current income;
• Whether the loss can be carried forward; and
• Whether any restriction applies to its utilization.

The tax computation should therefore maintain a proper schedule of brought-forward and current-year losses.

Step 18: Calculate Total Taxable Income

After completing the above steps, the company can calculate its total taxable income.

A simplified tax computation may look like this:

The actual computation will depend on the company’s business, transactions, applicable exemptions, deductions, tax adjustments and other provisions of the Income Tax Act.

Need assistance with preparing and submitting your Company Income Tax Return in Bangladesh? Our professional team can assist you with accurate corporate income tax return preparation and timely submission. Contact us at +880 1677 970763 (Call & WhatsApp) or email ferdous@fmgaccountants.com.

Step 19: Apply the Applicable Corporate Tax Rate

Once taxable income has been determined, the applicable corporate income tax rate must be applied.

For assessment years 2026-2027 and 2027-2028, NBR’s published tax-rate table provides, among others, the following rates:

Certain companies may qualify for a reduced rate subject to specified conditions. The applicable rate should therefore be checked based on the company’s exact category and the current Finance Act and NBR tax-rate notification/paripatra.

For example, if a company has taxable income of BDT 24,000,000 and the applicable tax rate is 27.5%:

Tax liability = BDT 24,000,000 × 27.5%

= BDT 6,600,000

This is only an illustration. The actual corporate tax rate and any applicable minimum/turnover tax, rebate, exemption or other provision must be considered for the particular company.

Step 20: Consider the Changes to Section 163 Introduced by Finance Act, 2026

The Finance Act, 2026 has made a significant change to section 163.

The previous minimum-tax framework has been substantially changed, and the amended section 163 now deals with advance tax, final tax and turnover tax.

Under the amended provisions, where the regular tax liability determined under the applicable provisions is lower than the prescribed turnover tax, turnover tax may become payable based on the gross receipts of the business or profession, where the provision applies.

The applicable turnover tax rate varies according to the nature of the business.

For example, the Finance Act, 2026 provides different rates for:

• Tobacco-product manufacturers;
• Manufacturers of carbonated or sweetened beverages;
• Mobile phone operators and NTTN institutions;
• New industrial manufacturing undertakings during the specified initial period; and
• Other cases.

The general rate for other cases is 1%, while sector-specific rates apply to specified businesses.

Therefore, while preparing a company tax return, the taxpayer should not stop after calculating tax on taxable income. It should also determine whether section 163 and the applicable turnover-tax provisions affect the company’s final tax liability.

Step 21: Adjust Tax Deducted at Source and Advance Tax

After calculating the company’s gross tax liability, the company should reconcile tax already paid or deducted on its behalf.

This may include:

• Tax deducted at source;
• Tax collected at source;
• Advance income tax;
• Tax paid at import stage;
• Tax paid on other transactions; and
• Other allowable tax credits.

For example:

The company should verify the supporting evidence for each tax credit before claiming it in the return.

Step 22: Pay the Balance Tax Before Submitting the Return

This is an important compliance requirement.

Under section 173 of the Income Tax Act, 2023, the tax payable on the basis of the return must be paid on or before the date of filing the return, subject to the statutory calculation and adjustment of tax already paid or deducted.

Therefore, if the company’s tax computation shows:

Gross tax liability = BDT 6,600,000

Less TDS/AIT = BDT 3,500,000

Balance tax payable = BDT 3,100,000

the company should pay the balance BDT 3,100,000 before submitting the return.

The payment evidence should be retained and reconciled with the return.

Step 23: Who Is Required to File a Company Tax Return?

The filing obligation is governed principally by section 166.

Under section 166(1)(c), a company is specifically included among the persons required to file an income tax return.

Therefore, a company generally has a statutory obligation to file an income tax return even if it has:

• No taxable income;
• A tax loss;
• No tax payable; or
• Tax deducted at source that fully covers its tax liability.

The obligation to file should therefore not be confused with whether the company ultimately has tax payable.

Step 24: What Documents Must Be Submitted With a Company Tax Return?

Section 169 contains the general requirements for filing the return.

For a company, the following documents are particularly important:

1. Audited Financial Statements

The company should attach its audited financial statements as required.

2. Evidence of Compliance

Evidence of compliance with the criteria prescribed by the Board for verification should be provided where applicable.

3. Tax Computation/Reconciliation

A separate computation sheet should explain the difference between:

Profit or loss shown in the financial statements

and

Income shown in the income tax return.

This is an extremely important document because the accounting profit and taxable income are often different.

4. International Transaction Statement

Where the company has international transactions, the relevant statement of international transactions under section 238 is required to be submitted with the income tax return.

Step 25: Sign and Verify the Company Tax Return

The return must be properly signed and verified.

Under section 169(5), in the case of a company, the return is to be signed and verified by the principal officer of the company.

The company should therefore ensure that the return is properly authorized before submission.

Step 26: File the Return Under Self-Assessment

Under section 170, persons legally required to file a return under section 166 file the return under the self-assessment procedure under section 180.

This means that the company is responsible for determining:

• Its taxable income;
• Tax liability;
• Tax deducted/collected at source;
• Advance tax;
• Balance tax payable; and
• Other relevant tax amounts.

The return should therefore be prepared carefully before submission rather than treating the filing process as a simple formality.

When Should a Company Submit Its Income Tax Return?

The Finance Act, 2026 has changed the filing timetable.

For taxpayers other than individuals and Hindu Undivided Families, including companies, the amended section 170 provides that the return is generally due on:

The 15th day of the ninth month following the end of the income year

or, where that date falls before 15 September:

15 September following the end of the income year.

For a company whose income year ends on 30 June, the practical statutory deadline is therefore generally 15 September following the end of the income year.

For example:

Income Year: 1 July 2025 to 30 June 2026

Company Tax Return Due Date: 15 September 2026

For:

Income Year: 1 July 2026 to 30 June 2027

Company Tax Return Due Date: 15 September 2027

Companies should verify the applicable deadline for the particular assessment year because the Finance Act and subsequent NBR notifications may affect the applicable compliance requirements.

Early Filing Incentive for Companies

The Finance Act, 2026 also introduced an incentive for timely filing.

Where a taxpayer other than an individual or Hindu Undivided Family files the return at least two months before the expiry of the statutory filing deadline, the taxpayer may be entitled to a tax incentive equal to 5% of the payable tax, subject to a maximum of BDT 25,000, according to the amended section 170.

Therefore, companies may benefit from preparing and filing their returns well before the statutory deadline rather than waiting until the last date.

What Happens If a Company Files Its Return Late?

The Finance Act, 2026 also introduced additional tax consequences for delayed filing.

Therefore, a company should not assume that filing after the statutory deadline simply results in an administrative penalty.

Depending on when the return is filed, additional tax may become payable under the amended provisions.

The company should therefore monitor the statutory filing deadline and complete its tax computation, payment and return submission in advance.

Step 27: Submit the Company Tax Return

After completing the tax computation and paying the required tax, the company should submit its return through the prescribed income tax filing system and in the prescribed form.

The practical process can be summarized as follows:

Step 1

Finalize the company’s financial statements.

Step 2

Complete the audit where required.

Step 3

Determine business income under sections 45 to 56.

Step 4

Identify other taxable income.

Step 5

Calculate total taxable income.

Step 6

Apply the applicable corporate tax rate.

Step 7

Consider section 163 and any applicable turnover tax.

Step 8

Adjust TDS and advance tax.

Step 9

Calculate the balance tax payable.

Step 10

Pay the balance tax.

Step 11

Prepare the prescribed tax return.

Step 12

Attach audited financial statements and tax computation.

Step 13

Attach the international transaction statement where applicable.

Step 14

Ensure the return is signed and verified by the company’s principal officer.

Step 15

Submit the return within the statutory deadline.

Step 16

Save the acknowledgement/proof of submission and payment records.

A Simple Example of Company Tax Return Preparation

Suppose a company has the following figures:

Assuming the applicable corporate tax rate is 27.5%:

Regular income tax = BDT 55,000,000 × 27.5%

= BDT 15,125,000

Suppose the company has already paid:

• TDS = BDT 5,000,000
• Advance tax = BDT 4,000,000

Then:

Gross tax liability = BDT 15,125,000

Less: TDS = BDT 5,000,000

Less: Advance tax = BDT 4,000,000

Balance tax payable = BDT 6,125,000

The company should then consider whether any provision under section 163, including turnover tax, changes the final liability.

If BDT 6,125,000 remains payable after all applicable adjustments, that amount should be paid in accordance with the law before submission of the return.

Company Tax Return Preparation Checklist

Before submitting a company income tax return, the company should ensure that the following matters have been reviewed:

• Final financial statements prepared;
• Financial statements audited where required;
• Accounting profit reconciled with tax computation;
• Business income determined under sections 45 to 56;
• Tax depreciation calculated;
• Accounting depreciation reconciled with tax depreciation;
• Allowable expenses reviewed;
• Disallowed expenses identified;
• Withholding-tax compliance reviewed;
• Interest expenses reviewed;
• Related-party transactions reviewed;
• Transfer pricing requirements considered;
• Capital gains reviewed;
• Financial asset income reviewed;
• Tax losses reviewed;
• Brought-forward losses reconciled;
• Corporate tax rate confirmed;
• Section 163 and turnover tax considered;
• TDS reconciled;
• Advance tax reconciled;
• Balance tax calculated;
• Balance tax paid;
• Audited financial statements attached;
• Tax computation attached;
• International transaction statement attached where applicable;
• Return signed by the principal officer;
• Return submitted within the statutory deadline; and
• Proof of submission and payment retained.

Common Mistakes in Company Tax Return Preparation

Companies should be particularly careful to avoid the following common mistakes:

Treating accounting profit as taxable income

Accounting profit is the starting point, not necessarily the final taxable income.

Claiming accounting depreciation as tax depreciation

Tax depreciation should be calculated under the applicable provisions of the Income Tax Act.

Claiming expenses without considering section 55

Certain accounting expenses may be disallowed or restricted for tax purposes.

Ignoring withholding-tax compliance

Failure to comply with applicable withholding-tax provisions can affect the deductibility of expenses and may create additional tax liabilities.

Failing to reconcile TDS

TDS claimed in the tax return should be supported by appropriate evidence.

Ignoring related-party transactions

Transactions with associated enterprises may trigger transfer pricing and other tax requirements.

Ignoring turnover tax

Following the Finance Act, 2026 changes, companies should consider whether section 163 and the applicable turnover-tax provisions affect their tax liability.

Filing after the deadline

Late filing may result in additional tax and other consequences.

Need assistance with preparing and submitting your Company Income Tax Return in Bangladesh? Our professional team can assist you with accurate corporate income tax return preparation and timely submission. Contact us at +880 1677 970763 (Call & WhatsApp) or email ferdous@fmgaccountants.com.

Final Thoughts

Preparing and submitting a company tax return in Bangladesh is a detailed tax compliance exercise. The process begins with the company’s financial statements but must go beyond the accounting records to determine taxable income under the Income Tax Act, 2023.

The basic process can be summarized as:

Financial Statements

↓

Accounting Profit

↓

Business Income Under Sections 45–56

↓

Add/Remove Tax Adjustments

↓

Other Taxable Income

↓

Total Taxable Income

↓

Applicable Corporate Tax Rate

↓

Consider Section 163 / Turnover Tax

↓

Less TDS and Advance Tax

↓

Balance Tax Payable

↓

Pay Tax

↓

Prepare Return and Supporting Documents

↓

Submit Company Tax Return

For companies operating in Bangladesh, proper tax return preparation is particularly important because the tax computation involves numerous provisions relating to allowable expenses, disallowances, depreciation, withholding tax, related-party transactions, transfer pricing, tax losses and other adjustments.

The Finance Act, 2026 has also introduced significant changes to corporate taxation and return filing. Companies should therefore prepare their returns based on the current Income Tax Act, Finance Act, applicable SROs, NBR circulars and the latest income tax guidance rather than relying on older tax-return practices.

A company should ideally start preparing its tax computation well before the statutory filing deadline. This allows sufficient time to reconcile the financial statements, identify tax adjustments, verify TDS and advance tax, pay the balance tax and submit an accurate return within the prescribed period.

Need assistance with preparing and submitting your Company Income Tax Return in Bangladesh? Our professional team can assist you with accurate corporate income tax return preparation and timely submission. Contact us at +880 1677 970763 (Call & WhatsApp) or email ferdous@fmgaccountants.com.