BB issues circular to deduct tax from income of foreign individuals, organizations

Bangladesh Bank (BB) has issued directives to deduct tax at prescribed rate from income of non-resident persons or organizations of the country. Alongside, in case of any irregularity in tax rate, additional payment at the rate of two percent per month must be paid.

Foreign Exchange and Policy Division of the central bank issued a circular in this regard on Wednesday (February 09).

The circular has been sent to the authorized dealer banks engaged in foreign exchange transactions, with an attachment of the letter containing instructions from the National Board of Revenue (NBR) regarding tax deduction in case of remittances abroad.

According to the circular, in case of remittance of invoice value through letter of NBR, it has been directed to remit the remaining amount by deducting tax at the applicable rate from the amount of money being remitted under section 56 of Income Tax Ordinance, 1984.

At the same time, the method of calculating the amount of tax deducted and deposited in case of payment of full invoice has been explained with formula. In addition, tax rates have been clarified as applicable against the amount payable in certain sectors.