Section-46A-46B Page 1 of 3

Taxation 1
Tax Holiday & Exemption from Tax

Sec.-46A(1): Tax Holiday Scheme for newly established industrial undertakings, tourist
industry and infrastructure facility:
Profit and gains of an industrial undertaking, tourist industry or physical infrastructure facility set up
in Bangladesh between 1 July 1995 and 30 June 2008(Both days inclusive) shall be exempted from
the tax payable under section 46A(1) of the ordinance for the period specified below:-
a. if the said undertaking is set-up in, Dhaka and Chittagong except hill district, for a period of
4 years from the commencement of commercial production.
b. if the said undertaking is set-up in, Rajshahi, Khulna, Sylheyt and Barisal division and the
hill district, for a period of 6 years from the commencement of commercial production.
‘(1A) industrial undertaking, tourist industry, or physical infrastructure facility does not include
expansion of an existing undertaking for the purpose of this section.
Sec.-46A(1) & B(2): Understanding of “industrial undertaking”, “physical infrastructure
facility”, “tourism industry”
a. industrial undertaking” means the following:
(i) Textile
(ii) Textile Machinery
(iii) High value Garments
(iv) Pharmaceuticals
(v) Melamine
(vi) Plastic Products
(vii) Ceramics
(viii) Sanitary ware
(ix) Steel from iron ore
(x) MS Rode
(xi) CI Sheet
(xii) Fertilizer
(xiii) Insecticide and Pesticide
(xiv) Computer Hardware
(xv) Petro-chemicals
(xvi) Basic raw materials of drugs, chemicals pharmaceuticals
(xvii) Agricultural Machine
(xviii) Ship Building
(xix) Boilers and compressors
(xx) Energy Saving bulb
(xxi) Solar energy panel
(xxii) Barrier contraceptive or rubber latex
b. “physical Infrastructure” means the following
(i) Sea or River port
(ii) Container Terminals
(iii) Internal container depot
(iv) Container fright station
(v) LNG Terminal and Terminal line
(vi) CNG terminal and transmission line
(vii) Gas pipe line
(viii) Flyover
(ix) Large water treatment plant
(x) Solar energy plant
(xi) Export processing zone
c. “tourist industry” means Residential hotel having facility of three star or more and any
other category of industrial undertaking as the Government may by notification in the
official Gazette specify.

Md. Sayduzzaman Tuhin, S.F.Ahmed & Co. Mob:-01552-639307, E-mail:tuhinsf@yahoo.com

 Section-46A-46B Page 2 of 3

Sec.-46B(4) & A(2): Condition for Exemption from Tax / Tax holiday:
For Tax Holiday or exemption from tax to the said undertaking if it full fills the followings the
condition 46A(2) & b(4):
a. That the said undertaking is owned and manage by (a)
i) a body corporation established by or under an act of Parliament with its head office
in Bangladesh.
ii) A company as defined in the company act 1994 and having subscribed & paid up
capital not less then 1,00,000/=.
b. 40% of its income should be reinvested, 30% in new or extension of said undertaking within
one year, 10% in share market within three month. (c)
c. The said undertaking must be newly established. (d)
d. The said undertaking is approved by the Board for the purpose of section 46A/B. (e)
e. the application in prescribed form (f)
Sec. 46A(5-6), B(8,9): Condition to fulfilled after getting Tax holiday:
1. The profit and gain of Tax holiday company shall be computed separately,
2. Loss (other than depreciation loss) during Tax holiday period can not be carried forward
beyond the Tax holiday period,
3. Only normal depreciation is applicable for Tax holiday enjoying Companies,
4. 40% of income to be reinvested-
 30% in the same company o new industry, maximum within 1 year from the end of Tax
holiday period.
 10% in the share of listed company in each year, maximum within 3 month from the
end of the income year.

Sec. 46A(8-10): Withdrawal and Cancellation of Tax holiday:

1. In course of assessment, DCT also may withdraw subject to not fulfillment of required
condition (8).
2. Tax holiday shall be deem to have been withdrawn for:[46A(2A)]
 If the company engaged in any commercial transaction with another company having
one or more common sponsor shareholder,
 Purchase or sold of goods at higher or lower price than normal price with the
intention to reduce profit.
3. Any undertaking can write to NBR for cancellation of Tax Holiday within 1 year (9).
4. NBR may cancel or suspend full or partially any tax holiday in public interest (10).

Sec.-46B(1): Exemption from Tax of newly Established Industrial Undertaking Set-up Between
the period of July, 2008to June, 2011:
Profit and gains of an industrial undertaking, tourist industry or physical infrastructure facility set up
in Bangladesh between 1 July 2008 and 30 June 2011(Both days inclusive) shall be exempted from
the tax payable under the Ordinance for the period, and at the rate, specified below:
a. if the said undertaking is set-up in, Dhaka and Chittagong except hill district, for a period of
5 years from the commencement of commercial production.

Period of Exemption Rate of Exemption

Fore the first two years (1,2) 100% of income
For the next two years (3,4) 50% of income
For the last one years (5) 25% of income

b. if the said undertaking is set-up in, Rajshahi, Khulna, Sylheyt and Barisal division and the
hill district, for a period of 7 years from the commencement of commercial production.
c.
Period of Exemption Rate of Exemption
Fore the first three years (1,2 & 3) 100% of income
For the next three years (4,5 & 6) 50% of income

Md. Sayduzzaman Tuhin, S.F.Ahmed & Co. Mob:-01552-639307, E-mail:tuhinsf@yahoo.com

 Section-46A-46B Page 3 of 3

For the last one years (7) 25% of income

Sec.-46A & B(10): Income are not exempted from tax:

a. Dividend paid by any tax holiday company is taxable at the hand of recipient shareholders.
b. In come from “capital gain”.
c. Any income arising from disallowances.

Application procedure for Tax Holiday / Exempted from Tax:

a) Application to be made within 6 months from the date of commercial production/operation
in the form prescribed in 59A in duplicate, duly signed and verified by MD or Director of the
company.
b) NBR shall dispose the decision within 45days, otherwise undertaking shall be deemed to
have been accepted.
c) NBR shall not reject any application without giving reasonable opportunity of being hared.
d) If NBR reject any application, future review application can be submit to the chairman of the
Board within 4 months.
e) In this regards decision of review committee consisting 3 members or NBR self, shall be
considered as final and conclusive.
f) In this case there is mo time limit for disposal.

Document to be submitted with the application: Attested copy of-

- certificate of incorporation
- Memorandum and Article of Association
- Certificate of commencement of business
- Certified copy of Balance sheet and Profit & Loss Account, in case of company already
commenced business
- A complete sanction scheme
- A certified copy of blue print of building
- A certificate that undertaking has not applied or shall not apply for, accelerated depreciation
allowed under Para 7 or 7A of Third schedule of ITO 1984.

Md. Sayduzzaman Tuhin, S.F.Ahmed & Co. Mob:-01552-639307, E-mail:tuhinsf@yahoo.com