Location-Based Tax Exemption Rates and Durations: The rates and duration of the tax exemption vary depending on the specific location of the approved entity within Bangladesh:

1. Industries in Dhaka or Chittagong Divisions (excluding specified areas):

If an approved entity is located in any district within the Dhaka or Chittagong divisions (but excluding city corporation areas and the hill districts of Rangamati, Bandarban, and Khagrachari), it is entitled to tax exemption for a period of 10 years from the month of commencement of commercial production, at the following rates:(See, Table 1 to 4)

2. Industries in Dhaka or Chittagong Divisions (alternative scheme, excluding specified areas):

Alternatively, if an approved entity is located in the Dhaka or Chittagong divisions (again, excluding city corporation areas), it may be entitled to tax exemption for a period of 5 years from the month of commencement of commercial production, at the following rates: (See, Table 5 to 9)

3. Tax Exemptions for IT and IT-Enabled Services (Until June 2027):

In addition to the general industrial tax holidays, the government of Bangladesh also provides specific tax exemptions for businesses engaged in Information Technology (IT) and IT-Enabled Services (ITES). These exemptions are typically aimed at fostering the growth of the digital economy. Businesses in the following categories may be eligible for tax exemption on their income derived from these services up to June 30, 2027, subject to specific conditions and notifications by the National Board of Revenue (NBR):

1. AI-based solution development

2. Blockchain-based solution development

3. Robotics process outsourcing

4. Software as a service (SaaS)

5. Cyber security service

6. Digital data analytics and application

7. Development service

8. Mobile Application Development Service

9. Software Development and Customisation

10. Software Test Lab Service

11. Web listing, website development, and service

12. IT assistance and software maintenance service

13. Geographic information service

14. Digital Animation development

15. Digital graphics design

16. Digital Data Entry and Processing

17. E-learning platform and e-publication

18. IT Freelancing

19. Call Center Services

20. Document conversion, imaging, and digital archiving

It is crucial for businesses in these sectors to verify the current applicability and specific requirements for these exemptions with the NBR or a qualified tax advisor, as regulations can be updated.

4. Strategic Importance of Tax Holidays:

These tax holiday provisions are a cornerstone of Bangladesh’s strategy to attract significant investment into targeted industrial sectors. By offering these incentives, the government aims to foster industrial diversification, promote regional development by encouraging businesses to establish operations outside major urban centres, and ultimately contribute to the overall economic growth and prosperity of the nation.