Foreign or non-resident recipients of payments from Bangladesh may be surprised by receiving up-to 30 percent less than the due or invoiced amount.
The remitting banks from Bangladesh is obliged to deduct, mostly 20 percent, which may go as high as 30 percent, depending on the nature and type of the payment, without a specific approval of the Bangladesh tax authority on applicability of the benefit or on the applicable tax rate or a waiver for the foreign or non-resident company, organisation and individual, even from those of the residents in the countries, which have a double taxation agreement with Bangladesh.
In a letter to the governor of the central bank, the Bangladesh tax authority requested the central bank for taking all necessary measures to strictly comply with the directives by all scheduled banks in Bangladesh. In the letter, the authority further specified that obtaining such approval was required under double taxation agreements.
This tax deduction shall be deemed to be the minimum tax liability of the payee in respect of the income for which the deduction is made, and shall not be subject of refund or set off or an adjustment against a demand as per the law. This means the special approval must be obtained before receiving the payment from Bangladesh.
Currently Bangladesh has Double Taxation Avoidance Agreements with Belarus, Belgium, Canada, China, Denmark, France, Germany, India, Indonesia, Italy, Japan, the Kingdom of Saudi Arabia, Malaysia, Mauritius, Myanmar, the Netherlands, Norway, Pakistan, Philippines, Poland, Romania, Singapore, South Korea, Sri Lanka, Sweden, Switzerland, Thailand, Turkey, the United Arab Emirates, the United Kingdom, the USA and Vietnam.
Our legal team can file, process and support waiver application with the concerned authority.