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Tax Holidays For Bangladeshi Coal-Fired Power Projects

by Mary Swire, Tax-News.com, Hong Kong

24 July 2013


While the World Bank is scaling down its financial assistance for new coal-fired power generation projects, Bangladesh has announced that, instead, it will now offer them a tax holiday of up to 15 years from the date they begin production.

In an effort to encourage private investment into such projects, it is reported that the National Board of Revenue in Bangladesh has disclosed that an investing company that completes a contract to build a coal-fired facility before June 2020, and actually generates power from it by June 2023, will be able to obtain the corporate tax exemption.

The tax incentives could also include an income tax exemption for non-Bangladeshi workers at the plants for three years, and an exemption from withholding taxes on interest paid on foreign investment loans. It is also expected that any capital gain from sale of the power-generating facilities, royalties and technical know-how will also be tax-exempt.

With only 2 percent being so produced currently, and a target of increasing that to 24 percent, Bangladesh has adopted a strategy to develop coal-fired power generation, particularly utilizing its domestic resources, as the production of other options, including natural gas, has been decreasing.

TAGS: tax | business | tax incentives | mining | royalties | energy | corporation tax | withholding tax | Bangladesh | tax breaks | individual income tax

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