Bangladesh: local rules

Transfer pricing is in the transfer pricing chapter (Chapter II) of the Income Tax Act, 2023, sections 233 to 239 (penalties in sections 276 to 279). Section 234 says income and expenses from an international transaction are set at the arm's length price. An international transaction is a transaction between associated enterprises where one or both are non-resident. Enterprises are associated if, for example, one holds more than 25% of the votes in the other, one's borrowings from the other exceed 50% of the book value of total assets, or one guarantees more than 10% of the other's borrowings. The 1984 Ordinance was repealed, but rules made under it stay in force until replaced (s. 344(2)(c)). Many guides cite old or wrong section numbers (107A to 107J, or 108 to 117); the official English text uses 233 to 239.

Every person with an international transaction must keep the information, documents and records the rules require (s. 237). The tax officer can demand them by notice, within the time set in the notice. Every such person must also file a statement of international transactions with the income tax return (s. 238), whatever the value. The Deputy Commissioner of Taxes may also order an accountant's report (from a Chartered Accountant or a Cost and Management Accountant) if international transactions in the income year exceed Taka 3 crore (BDT 30 million) in the books (s. 239). This applies only when the officer sends a notice. The Act has no master file, local file or Country-by-Country report. Documentation details (Rule 73 of the old Income Tax Rules, 1984) are from secondary sources.

Five methods plus an other method: comparable uncontrolled price, resale price, cost plus, profit split, transactional net margin, and any other method if none of those can be applied (s. 235(1)). The most appropriate method is chosen. For methods other than profit split and other methods, if there are 6 or more comparables the arm's length range is the 30th to 70th percentile. A price inside the range stands. A price outside the range is moved to the median. With fewer than 6 comparables the arithmetic mean is used. The adjusted price cannot lower total income below what was actually reported (s. 235(3) proviso). The tax officer can set the price if the taxpayer's price, records or data are not reliable, after a show-cause notice. A case can be sent to a Transfer Pricing Officer with Board approval (s. 236).

Up to 1% of the value of each international transaction for not complying with a notice under s. 235 (s. 276) or for not keeping or giving the records under s. 237 (s. 277). Up to 2% of the value of each international transaction for not filing the statement under s. 238 (s. 278). Up to Taka 3 lakh for not giving the accountant's report under s. 239 (s. 279). No penalty can be imposed without a hearing (s. 280). A company return filed after the due date but within the same tax year carries additional tax of 2% of the tax payable or Taka 25,000, whichever is higher (s. 170(2), as substituted by the Finance Act 2026); later late returns cost more (s. 174).

Bangladesh has not enacted Pillar Two. The Income Tax Act, 2023, as amended up to the Finance Act 2026, has no IIR, UTPR or domestic top-up tax and no GloBE information return, and Bangladesh is not an OECD Inclusive Framework member. No Bangladesh filing is due. Bangladeshi subsidiaries of in-scope groups may be covered by top-up tax or GloBE returns filed in other countries.

Income year: 1 July to 30 June for most companies. Banks, insurers and finance companies use the calendar year. A subsidiary or branch of a foreign parent can get approval for a different 12-month year to match its parent. Company return due date: the Finance Ordinance 2025 (from 1 July 2025) repealed the old 'tax day' (15th day of the seventh month) and moved the company date to the 15th day of the ninth month after the income year end, but not before 15 September. The Finance Act 2026 kept this in the new s. 170(2). So 30 June year ends give 15 March, 31 March year ends give 15 December, and 31 December year ends give 15 September of the next year. If the day is a government holiday it moves to the next working day (s. 170(3)). Filing at least 2 months early earns a rebate of 5% of the tax payable, capped at Taka 25,000. From 1 July 2026 the NBR's general power to extend the date by one month was removed; s. 334 now allows extensions only in a declared epidemic, natural disaster or war. In 2026 the NBR moved the 15 March 2026 date for June 2025 year ends to 15 April and then 15 May, but those were one-off orders, so no extension is shown. No safe harbour, advance pricing agreement or secondary adjustment rule was found in the Act. There is a general anti-avoidance rule for dealings with non-residents in s. 240. Country-by-Country reporting has not been introduced, and Bangladesh is not on the OECD Inclusive Framework member list (updated 5 December 2025).