A non-resident company is generally taxed in Bangladesh on income that arises or is received in Bangladesh, usually through withholding at source when a Bangladeshi payer makes the payment. Common examples are interest, royalties, technical and service fees, and contract payments. If the company carries on business through a permanent establishment in Bangladesh, such as a branch, project site or dependent agent, the profits attributable to it are taxed by assessment. A double tax treaty may reduce withholding rates or limit when a permanent establishment arises. We analyse each income stream to identify its international tax treatment.

Withholding rates depend on the type of payment and are set by the Income Tax Act 2023 and the annual Finance Act. The Finance Act 2026 reduced withholding on interest paid to non-residents to 10% from 20%. Dividends, royalties, technical fees and other service payments have their own rates, and a double tax treaty may reduce them if the recipient qualifies and provides proof of residence and entitlement. VAT may also apply to imported services. The payer is responsible for withholding and depositing the tax, and failure can lead to disallowance of the expense, interest and penalties.

The recipient usually needs a tax residence certificate from its home country, and the Bangladeshi payer and its bank will expect documentation showing that the recipient is the beneficial owner of the income and meets the treaty's conditions. Depending on the payment and current practice, a certificate or approval from the tax authority may be needed for reduced withholding at source, or a refund claim may be required afterwards. We review the treaty, prepare the supporting documents and advise the payer on its position, because the payer bears the risk if reduced withholding is later challenged.

A permanent establishment may arise where a foreign company has a fixed place of business in Bangladesh, such as an office, branch or factory, a construction or installation project lasting beyond the period set in the relevant treaty, or a dependent agent who habitually concludes contracts on its behalf. Some treaties also cover service permanent establishments based on time spent by staff in Bangladesh. Domestic law can be broader than the treaty where no treaty applies. Liaison offices and visiting project teams need careful management. We assess the facts and recommend practical steps to reduce international tax exposure.

Yes. The Income Tax Act 2023 contains transfer pricing provisions requiring transactions between associated enterprises, including cross-border and certain domestic transactions, to be priced at arm's length. Taxpayers above set thresholds must keep documentation and file statements of international transactions, and the tax authority can adjust prices and impose penalties for non-compliance. Common areas of focus include management fees, royalties, intra-group loans and the pricing of exports through affiliates. We work with accountants and economists to prepare documentation, and defend positions in audits and appeals as part of our international tax practice.

Bangladeshi resident individuals and companies are generally taxed on worldwide income, including foreign salaries, business profits, dividends, interest and gains, subject to specific exemptions such as those for certain remittances. Relief for tax paid abroad may be available under a double tax treaty or domestic rules. Residents also need foreign exchange permission to hold many types of foreign assets or investments, and should disclose assets correctly in their returns. Returning Bangladeshis and dual nationals often need advice on residence status. We advise on international tax filings, relief claims and how to regularise foreign holdings.

The choice between equity and shareholder loans affects tax, foreign exchange approvals and flexibility. Interest on shareholder loans may be deductible for the subsidiary, subject to transfer pricing and other limits, and is now subject to 10% withholding when paid to non-residents under the Finance Act 2026, potentially reduced by treaty. Dividends are paid from post-tax profits and attract their own withholding. Foreign loans need approval and reporting, and repayment depends on proper documentation. Equity is simpler but harder to return to the investor. We model both routes and recommend a funding mix that fits the investor's international tax position.

Most disputes begin with an audit or assessment by the tax authority, followed by an appeal to the appellate authority and then to the Taxes Appellate Tribunal, with a further reference to the High Court Division on questions of law. Writ petitions may be available against unlawful action. Treaty disputes may also be raised with the other country's tax authority under the mutual agreement procedure. Some disputes can be settled through alternative dispute resolution arrangements offered by the tax authority. We prepare the factual and legal record early, because evidence presented at the first stage often decides the outcome.