Corporation Tax: An Overview

What is Corporation Tax?

Corporation tax is a tax imposed on the profits of companies and corporations. In Bangladesh, it is a key source of revenue for the government and is applicable to both resident and non-resident companies operating within the country.

Why is Corporation Tax Important?

1. Legal Obligation: Paying corporation tax is a legal requirement under the Income Tax Ordinance, 1984.
2. Revenue Generation: Taxes collected contribute significantly to the national budget and fund public services and infrastructure.
3. Market Fairness: It ensures that businesses contribute to the society in which they operate.

Corporation Tax Law in Bangladesh

In Bangladesh, corporation tax is governed by the Income Tax Ordinance, 1984, with the following key features:

• Tax Rates: The general corporate tax rate is 25% for most companies, while certain sectors, like banks and financial institutions, may face higher rates.
• Filing Deadline: Corporations are required to file their tax returns within a specific period after the end of the financial year.
• Taxable Income: Tax is levied on net profits after deducting allowable expenses and exemptions.

Benefits of Paying Corporation Tax

1. Legal Compliance: Meeting tax obligations helps avoid legal issues and penalties.
2. Business Credibility: Companies that pay their taxes build a positive reputation with customers, investors, and regulatory authorities.
3. Access to Government Contracts: Compliance with tax regulations can enhance eligibility for government contracts and grants.
4. Tax Deductions: Paying corporation tax allows businesses to claim deductions for certain expenses, potentially lowering their taxable income.

Risks of Not Paying Corporation Tax

1. Legal Consequences: Non-compliance can lead to fines, penalties, and legal action from tax authorities.
2. Reputation Damage: Failure to pay taxes can harm a company's reputation and trustworthiness.
3. Increased Scrutiny: Non-compliant companies may face increased audits and scrutiny from tax authorities.
4. Loss of Business Opportunities: Non-payment can hinder a company’s ability to secure loans and attract investors.

Importance of Corporation Tax

• Sustaining Public Services: Taxes are essential for funding public infrastructure, healthcare, education, and other essential services.
• Economic Stability: A well-functioning tax system supports economic stability and growth by ensuring that businesses contribute their fair share.

History of Corporation Tax in Bangladesh

The imposition of corporation tax in Bangladesh has evolved since its independence in 1971. The Income Tax Ordinance, 1984 established the framework for corporate taxation, with various amendments introduced to adapt to changing economic conditions and policies.

Our Services for Corporation Tax Compliance

We offer a comprehensive range of services related to corporation tax compliance, including:

1. Consultation: Assessing your business's tax obligations and planning accordingly.
2. Tax Preparation and Filing: Preparing and submitting accurate tax returns within deadlines.
3. Tax Planning: Providing strategies to optimize tax liabilities and ensure compliance.
4. Audit Support: Assisting with any audits or inquiries from tax authorities.

Cost and Timeframes

• Costs: Fees for corporation tax services typically range from BDT 15,000 to 50,000, depending on the complexity and size of the business.
• Duration: The process of preparing and filing corporation tax returns usually takes 2 to 4 weeks, depending on the availability of financial records and the complexity of the return.

Why Choose Us?

• Expertise: Our team has extensive knowledge of Bangladeshi tax laws and corporate regulations.
• Tailored Solutions: We provide customized services based on your business’s specific needs and circumstances.
• High Success Rate: We have a proven track record of successful tax compliance for various businesses.

By ensuring compliance with corporation tax requirements, you not only fulfill your legal obligations but also contribute to the growth and development of the economy. Let us help you navigate the corporation tax process efficiently and effectively!