Exciting news for private renewable energy companies!
On 26 November 2024, the Government of Bangladesh released a gazette for income tax incentives in the renewable energy sector. This gazette replaces the earlier one in October 2024 which granted private power generating companies producing electricity from renewable sources under a Build, Own, Operate (“BOO”) model a phased tax holiday over ten years.
The previous incentives included:
- 100% income tax exemption for the first five years
- 50% for the next three years
- 25% for the following two years
These exemptions would apply if commercial production began between 1 July 2025 and 30 June 2030.
The new gazette introduces significant changes:
Extended Tax Holiday Period: The tax holiday is now expanded from ten years to fifteen years.
- 100% income tax exemption for the first ten years
- 50% for the next three years
- 25% for the following two years
Wider Eligibility: This incentive is no longer limited to companies operating under the BOO model.
No Objection Certificate Requirement: Renewable power companies must now obtain a No Objection Certificate (NOC) from the Power Division under the Ministry of Power, Energy, and Mineral Resources for each project or power plant.
The eligibility period for commercial production commencement remains the same (i.e., between July 1, 2025, and June 30, 2030).
If you have any questions regarding these tax exemptions, please feel free to reach out to us.
