Salient Features of Finance Ordinance 2025

What are the salient features of Finance Ordinance 2025 that will impact your tax compliance requirements for the financial year 2025-26?

In this article, today we will focus on corporate tax changes through the Finance Ordinance. We have already published a separate article where we have discussed personal tax changes through Finance Ordinance 2025. And in another article, we have discussed about the major Value Added Tax (VAT) and Supplementary Duty (SD) changes for the financial year 2025-26.

So, to get the full salient features of Finance Ordinance 2025, you have to read three articles including this one.

Ok, let’s start discussing the corporate tax changes for the financial year 2025-26!

Changes related to computation of company tax and filing

Finance Ordinance 2025 proposed a definition to determine the fair market value in replace of the existing definition under section 2(48). Previously, the Board had the discretion to determine the fair market value. But now the fair market value of any capital assets or business or undertakings shall be the price that would ordinarily fetch on sale in the open market on the relevant day.

Where it is not possible, then the DCT may ascertain the price with the approval of the Commissioner of Taxes. This is the same definition returned from section 2(30) of Income Tax Ordinance 1984.

The tax filing deadline has also been changed through the Finance ordinance 2025. A new definition 2(80ka) has been inserted where return filing except individual and Hindu Undivided Family (HUF) shall be on the 15th day of 9^th month following the end of income year. This definition is now clear and easy to follow for the corporate taxpayers.

If your income year ended on 30 June, then your deadline for tax filing will be 15^th March, previously which was 15^th January. So, this group of taxpayers will get two months more to file their tax return. However, the income year ended on 31^st December shall follow the same deadline as 15^th September.

If any taxpayer fails to file tax return within the due date then the Tax Commissioner may extend return filing upto 90 days upon receipt of application from such taxpayer.

For tax filing when you will calculate your corporate tax then following inadmissible expenses limit shall be considered per proposed changes under section 55 through Finance Ordinance 2025.

Perquisite extended to BDT 20 lakh from existing BDT 10 lakh;
Royalty, license fee, technical services fee, technical know-how fee, technical assistance fee or use of intangible assets related expenses shall be 15% of net profit from business instead of 10% or 6% of business turnover; whichever is lower.
No cash payment for salary and rental income but now also included raw materials which was previously BDT 500,000. Except these three items, other expenses shall not exceed 50% of the payment otherwise 25% of such expenses shall be disallowed. This condition will limit the corporate taxpayers to split the amount exceeding BDT 50,000 to make cash payment.

Tax payment before assessment

Each year it’s common to increase withholding tax rates and the current year is also the same. Tax rates at source shall be increased for the following sections:

Section 106 interest income from government securities increased to 10% from existing 5%.
Section 109 rental income at 10% from 5%.
Section 110 convention hall, conference centre etc to 10% from 5%.
Section 117 dividend decreased at 7.5% from 10% having TIN but same for non-TIN holders at 15%.

Tax collection of commercial vehicles under section 138 has also been increased. Each year we publish full TDS rates on this website. You can visit TDS rates chart FY 2025-26 for the full list!

You may know that withholding tax filing was half-yearly but it was made monthly in 2023. There is a good news, it makes quarterly from the next financial year. As per section 166, following will be the deadline for the withholding tax filing.

July, August and September – 25 October;
October, November and December – 25 January;
January, February and March – 25 April; and
April, May and June – 25 July.

Minimum Tax

Minimum tax is the most lucrative area for the government. Inserting this section, the government is collecting revenue from taxpayers which raises the justification of the system. However, Finance Ordinance 2025 amended the section and excluded section 112 and 113 from minimum tax list.

As per section 163(5), the ceiling of gross receipts for Individual taxpayers has been extended to BDT 4 crore from existing BDT 3 crore. And the minimum tax rates on gross receipts have been decreased for mobile phone operators to 1.5% from 2%.

The rate has been increased for the manufacturer of cigarette, bidi, chewing tobacco, smokeless tobacco, gul or any other tobacco product to1% from 0.25% and for any other cases to 1% from 0.60%. That means, most of the companies shall pay minimum tax at 1% on gross receipts.

However, there is a good news for the taxpayer who will pay minimum tax. As per section 163(8) of the Income Tax Act 2023, if the minimum tax is higher than regular tax and such minimum tax shall be adjusted in the following assessment years if only the regular tax is higher than the minimum tax. And minimum tax shall be carried forward to adjust with the regular tax.

Other Corporate Tax Changes

Section 20 of Income Tax Act 2023 has been deleted. So, no additional tax shall be applicable if there is any difference of import, export or investment declaration between the statement shown in the tax file and the actual transactions that happened. Tax was charged at 50% on the difference amount identified.

As per section 67(11) – any loan received by a company from any other person except banking channels shall be considered under income from other sources. Previously it was applicable only for companies but now any person except individual person shall fall under these criteria for taking any advance, loan or any other types of deposits.

As per section 72 method of accounting, there is a minor addition which includes IFRS for SMEs. Now, the small and medium enterprises financial statements shall be prepared following the IFRS for SMEs. And another change per section 51 is that bad debts will be considered if it is recorded following IAS, IFRS and law and regulations applicable in Bangladesh and considered as final by bank or financial institute; and written off in the books of accounts.

If you are interested in tax compliance following the changes of Finance Order 2025, then you can look at our Tax Compliance book which will be published in July 2025. This book will cover full tax compliance for corporate taxpayers. And to complete your salient features of Finance Ordinance 2025, read the VAT and SD changes in our next post.