An individual is classified as a resident of Bangladesh if they spend 182 days or more within the country during any given income year. Alternatively, if an individual has resided in Bangladesh for 90 days or more during an income year and had previously lived in the country for more than 365 days within the preceding four years, they are also considered residents for tax purposes.  Residency status in Bangladesh is determined solely based on the duration of stay within its borders, regardless of an individual’s residency status in other countries. Visitors on short-term stays and dependents of foreign nationals who do not earn income in Bangladesh are exempt from taxation and are not obligated to file tax returns in the country.

In essence, any compensation and perks received by an employee residing in Bangladesh or for services provided within the country are subject to taxation. This encompasses various forms of remuneration such as salaries, bonuses, commissions, accommodation allowances, transportation benefits, education allowances for children, employer-provided domestic assistance, and medical allowances. All these forms of income are considered taxable under Bangladeshi tax regulations.

Residents in Bangladesh are subject to income tax based on progressive tax rates, which vary from 5 percent to 25 percent depending on their income level. On the other hand, non-residents, with the exception of Bangladeshi non-residents, are taxed at a flat rate of 30 percent on their income. This means that regardless of the income amount, non-residents are taxed uniformly at the specified rate.

Before entering Bangladesh, individuals are required to apply for a visa, with the specific type of visa depending on the purpose of their visit. Those intending to work in Bangladesh must obtain a work permit, which is granted by the Bangladesh Investment Development Authority (BIDA). Furthermore, there is no concept of social security in Bangladesh.

Section 193 of the Income Tax Act 2023 outlines the process for assessing the income of individuals suspected of leaving Bangladesh permanently or for an extended period, without intent to return. It allows for assessment based on their total income for the relevant period up to the probable date of departure, considering whether they have been previously assessed or not. Assessment is conducted at applicable tax rates and may require filing returns and estimates of income.