Focus on normative/statistical tax for employees on international assignments, including hypothetical and gross-up calculations.
Expatriates Management Service
As per the existing law, if any business house wants to employ foreign nationals it will have to take prior permission from the Bangladesh Investment Development Authority (BIDA). Expatriates are taxed on income earned for working in Bangladesh, wherever that may be paid, and on foreign income received from Bangladesh sources.
Since payroll processing requires specific knowledge which employers might not have, it may result in extra effort being given by the employer and can be very stressful.
VISA / WORK PERMITS
A visa must be applied for before the individual enters Bangladesh. The type of visa required will depend on the purpose of the individual’s entry into Bangladesh. Foreigners working in Bangladesh must have a work permit. These are issued by the Board of Investment.
All foreign nationals seeking paid employment in Bangladesh must be in possession of a valid work permit. Bangladeshi people are given priority of employment and these permits are usually considered for work that local experts are unavailable or unable to do the work.
Three different government bodies are in charge of issuing work permits for Bangladesh. The Board of Investment issues work permits for an industrial enterprise, branch office and liaison office jobs in the private sector that are outside of the Processing Zone. Employment of expats in the export promotion zones, which include investment opportunities, proposals, and reports, are handled by the Bangladesh Export Processing Zones Authority (BEPZA). For work in any non-governmental organization in Bangladesh, foreigners will be issued a work permit by the NGO Affairs Bureau.
In order to be issued with a work permit, the Bangladeshi embassy must be supplied with a letter of employment from the business in Bangladesh and a confirmation letter of concurrence from the relevant governing body (either BOI, BEPZA or NGOAB). More information and advice can be obtained from the nearest Bangladeshi embassy or from the website of the Ministry of Foreign Affairs.
TAXABLE REMUNERATION
In general, all remuneration and benefits received by an employee who is resident in Bangladesh, or for services rendered in Bangladesh, are taxable. Taxable remuneration and benefits include salary, bonuses, commissions, accommodation allowances, transport benefits, education allowances for children, employer-provided domestic assistance and medical allowances.
Expat Tax / VISA And Work-Permit
There are certain perquisites and allowances must also be included in employment income. Perquisites and allowances are taxed differently under Indian law. Limited deductions from income also exist.
A prerequisite is any benefit received by the employee that is in addition to salary. Perquisites increase taxable income. In general, the taxable value of the perquisites to the employee is their cost to the employer. However, India has given specific rules for the valuation of the following perquisites provided by the employer:
- Residential accommodations
- Motor car
- Utilities
- Free or concessional educational facilities
- Free or concessional travel
- Sweeper, gardener, security, or domestic help
- Interest-free loans
- Meals
- Gifts, vouchers, tokens
- Club memberships
Expat Tax Summary
This Expat Tax Summary for Bangladesh contains comprehensive information about the taxation of expatriate income and serves as a vital resource for Global Mobility managers.
Each Summary Contains:
- Recent tax developments and their effect on employee net income
- Tax concessions available to expatriate employees
- Compulsory Social Security rates and maximum contributions by employees
- Family Allowances
- Typical deductions, allowances, and credits claimed by employees
- Types of taxable employment income
- The impact of marital status and family size on the overall tax burden
- Tax rates and tax brackets currently in effect on employment income
MPBD’s tax offerings focus on normative/statistical tax for employees on international assignments, including hypothetical and gross-up calculations. This targeted approach enables us to deliver tax essentials that are specially tailored for mobility managers. Expat Tax Summaries are updated annually by our dedicated team of licensed CPA and EA tax professionals.