In Bangladesh, when making payments to non-residents for services rendered within the country, the payer must deduct a portion of the payment as tax and deposit it to the government. This process is known as Tax Deducted at Source (TDS). The TDS rate for non-residents may vary from year to year. The updated TDS rate for payment to non-residents has been declared at Tax at Source Rule 2024. This article gives the non-resident TDS rate in Bangladesh 2024-2025 in the chart.
Who is Non-Resident?
a great explanation of non-resident and resident definitions is provided as per Section 2(45) and 2(4) of the Income Tax Act. Let’s simplify it further.
Who is a Resident?
According to this section, the following individuals or entities are considered residents:
Individuals Residing in Bangladesh for a Significant Period:
- 183 Days Rule: If a person stays in Bangladesh for at least 183 days in a year, either continuously or intermittently, they are considered a resident.
- 90 Days and Previous Four Years: Alternatively, if a person stays in Bangladesh for at least 90 days in a year and has stayed for a total of at least 365 days in the previous four years, they are also considered a resident.
Hindu Undivided Family, Firm, or Association Controlled from Bangladesh: If a Hindu Undivided Family, firm, or association is controlled and managed entirely from within Bangladesh, it is considered a resident.
Company Controlled from Bangladesh: If a company’s control and management functions are carried out entirely within Bangladesh, it is considered a resident.
Trust, Fund, Entity, or Artificial Person Created under Bangladeshi Law: If a trust, fund, entity, or artificial person is created under Bangladeshi law or its control and management functions are carried out entirely within Bangladesh, it is considered a resident.
Who is a Non-Resident?
If someone doesn’t meet any of the above conditions, they are considered a non-resident.
Non resident TDS rate in Bangladesh 2024-2025
Here is the chart of the TDS rate for payment to non-resident in Bangladesh for FY 2024-2025
| SL No | Description of Services or Payments | Rate |
|---|---|---|
| 1 | Advisory or consultancy service | 20% |
| 2 | Pre-shipment inspection service | 20% |
| 3 | Professional service, technical services, technical know-how or technical assistance | 20% |
| 4 | Architecture, interior design or landscape design, fashion design or process design | 20% |
| 5 | Certification, rating etc. | 20% |
| 6 | Charge or rent for satellite, airtime or frequency, rent for channel broadcast | 20% |
| 7 | Legal service | 20% |
| 8 | Management service including event management | 20% |
| 9 | Commission | 20% |
| 10 | Royalty, license fee or payments related to intangibles | 20% |
| 11 | Interest | 20% |
| 12 | Advertisement broadcasting | 20% |
| 13 | Advertisement making or Digital marketing | 15% |
| 14 | Air transport or water transport except areas mentioned per section 259 and 260 | 7.5% |
| 15 | Manufacturing, process or conversion, construction, engineering or any similar works by contractor, sub- contractor and sub-sub-contractor | 7.5% |
| 16 | Supplier | 7.5% |
| 17 | Capital gain | 15% |
| 18 | Insurance premium | 10% |
| 19 | Rental of machinery, equipment etc. | 15% |
| 20 | Dividend- (a) company, fund and trust (b) any other person not being a company, fund and trust | 20% 30% |
| 21 | Artist, singer or player | 30% |
| 22 | Salary or remuneration | 30% |
| 23 | Exploration or drilling in petroleum operations | 5.25% |
| 24 | Survey for coal, oil or gas exploration | 20% |
| 25 | Fees, etc. of surveyors of general insurance company | 5.25% |
| 26 | Any service for making connectivity between oil or gas field and its export, | 5.25% |
| 27 | Bandwith payment | 10% |
| 28 | Courier services | 15% |
| 29 | Any other payments | 20% |