Bangladesh Investment Income Guide 2026

Dividend Taxation

Dividends paid by Bangladeshi companies are subject to withholding tax (WHT) at the following rates:

• Resident individuals: 10% WHT (final tax — no further tax liability; dividend income is not aggregated with other income for IIT purposes)
• Resident companies: 10% WHT (dividends are included in taxable income; credit for WHT is available)
• Non-resident individuals/companies: 20% WHT (or lower rate if a Double Taxation Agreement applies)
• Listed company dividends: 10% WHT (final for resident individuals)
• Unlisted company dividends: 10% WHT (final for resident individuals)

Dividends from foreign sources are taxed at the recipient's applicable IIT rate (0–25%) with foreign tax credit available for withholding taxes paid abroad.

Interest Taxation

Interest income is subject to WHT, with rates varying by the source and recipient:

• Bank deposit interest: 10% WHT (resident individuals and companies). Interest up to BDT 25,000 per year per bank may be exempt from WHT.
• National Savings Certificates (NSC): 10% WHT deducted at source.
• Debentures and bonds: 10% WHT for residents.
• Non-residents: 20% WHT (or lower DTA rate).
• Interest on securities: 10% WHT for government securities (treasury bills, bonds).

Interest income is generally aggregated with other income and taxed at applicable IIT rates, with the WHT credited against the final tax liability. However, for certain categories (e.g., FDR interest below a threshold), the WHT may be treated as final.

Royalty Taxation

Royalties paid for the use of intellectual property, patents, trademarks, copyrights, and know-how are subject to WHT:

• Residents: 10% WHT
• Non-residents: 20% WHT (or lower DTA rate)

Royalty income is taxed on a gross basis (WHT is final for non-residents). For residents, the royalty is included in total income and the WHT is creditable. Bangladesh's DTAs with various countries may reduce the WHT rate on royalties to 10–15%.

Technical Fees Taxation

Technical service fees (fees for technical services, management fees, consultancy fees) paid to non-residents are subject to WHT:

• Non-residents: 20% WHT on gross amount (final tax for non-residents, unless reduced by DTA)
• Residents: 10% WHT (if the service recipient is a company or government entity; otherwise, no WHT required)

Technical fees are distinct from royalty fees. The 20% non-resident rate applies to fees for managerial, technical, or consultancy services of a defined nature. Bangladesh DTAs typically reduce this rate to 10–15%.

Interest on Savings Instruments

Interest earned on various government-approved savings instruments is subject to WHT:

• Sanchayapatra (সঞ্চয়পত্র): 10% WHT on interest income
• Wage Earners' Development Bond: 10% WHT
• US Dollar Premium Bond: 10% WHT
• Pensioner savings certificates: 10% WHT

These instruments are popular among Bangladeshi retail investors for their relatively higher interest rates (typically 3–5% above bank deposit rates) and government guarantee. The WHT is generally final for individual investors.

Double Taxation Agreements (DTAs)

Bangladesh has signed Double Taxation Agreements (DTAs) with over 30 countries, including the UK, USA, Canada, Australia, Japan, South Korea, India, Pakistan, Sri Lanka, Singapore, Malaysia, China, Germany, France, the Netherlands, and Sweden. Key provisions:

• Dividends: Typically reduced to 10–15% WHT
• Interest: Typically reduced to 10–12.5% WHT
• Royalties: Typically reduced to 10–15% WHT
• Technical fees: Typically reduced to 10–15% WHT

A tax residency certificate from the home country is required to claim DTA benefits in Bangladesh.

FAQs

Is dividend income exempt for individuals?

Dividend income is not exempt, but the 10% WHT is treated as a final tax for resident individual taxpayers. This means dividends are not aggregated with other income, and no additional IIT is payable on dividend income. For non-residents, the 20% WHT is also final.

How do I claim a refund of excess WHT?

If the total WHT deducted exceeds the taxpayer's final tax liability, a refund can be claimed by filing the annual income tax return with supporting certificates (e.g., Form 12 for salary, Form 12B for interest WHT, dividend warrants). Refunds are typically processed within 6–9 months.

Are foreign dividends taxable in Bangladesh?

Yes. Resident individuals must declare foreign dividends in their annual tax return. Foreign dividends are aggregated with other income and taxed at the applicable IIT rate (0–25%). A foreign tax credit is available for any withholding tax paid in the source country, limited to the Bangladesh tax rate on that income.

Disclaimer

This guide provides general information about investment income taxation in Bangladesh for the 2026 assessment year. Tax laws, WHT rates, and DTA provisions may change through the annual Finance Act. Always consult with a qualified tax advisor or the NBR directly for advice specific to your situation. InvestmentKit does not provide tax advice.