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10.1. Specific Incentives

Bangladesh offers incentives for  income derived from specified activities, including income from a physical infrastructure facility, ITES, exports of handicrafts, and industries established in an export promotion zone. Incentives are available upon compliance with specified requirements. Incentives are also available to industrial undertakings set up in specified regions.

Information Technology Enabled Services

Income from the business of certain information technology services (ITES), such as software development, information technology process outsourcing, information technology support and software maintenance services, and cybersecurity services, is exempt from tax until June 2024.

Effective 1 July 2021, the tax exemptions granted to the ITES have been extended to providers of cloud services, system integration, e-learning platforms, e-book publications, mobile application development services, and IT freelancing until June 2024, and a 10-year exemption is provided for the production of select IT hardware manufactured in Bangladesh.

Infrastructure Development Sectors

For industrial and physical infrastructure development sectors, tax holidays are introduced in the form of tax exemptions starting at 90%, which is reduced each year. The tax holidays have been extended from 30 June 2019 to 30 June 2024, with the inclusion of additional sectors including manufacturing of agricultural machinery, furniture, home appliances, mobile handsets, toys, leather goods, LED televisions, plastic recycling and export of handicrafts.

Tax incentives are available to power generation companies that begin operations before 31 December 2022 (extended from 31 December 2019), excluding coal-based power generation. The tax incentives include the following:

  • Tax holiday for 15 years on income from power generation business from the beginning of operations until 31 December 2034;
  • Tax exemption on certain payments made by power generation companies, such as interest payments on foreign loans, royalties, technical know-how, technical assistance fees; and
  • Tax exemption on capital gains from the trading of shares in power generation companies.


Effective 1 July 2021, a 10-year tax exemption is introduced for the following specific companies:

  • Companies engaged in the production of three and four-wheelers in Bangladesh. The tax exemption may be extended by a further 10 years on the fulfillment of certain other conditions;
  • Companies engaged in the production of certain home and kitchen appliances as well as light engineering products; and
  • Companies engaged in processing locally grown fruits and vegetables, producing milk and dairy products, producing baby food entirely from locally grown agricultural products, and manufacturing agricultural machinery.