Is foreign remittance income from freelancing or remote work tax-free or taxable?

"However, the Income Tax Act 2023 outlines a more detailed and structured approach, where the taxability of remote work or BPO-related income depends primarily on the taxpayer's residency status and the source of the income. But the key question is: who is a resident taxpayer? According to Section 26 of the Act, the global income of any person classified as a "resident" is subject to tax in Bangladesh, regardless of where that income is earned."

"Section 2(45) further clarifies that if you live in Bangladesh for at least 183 days in a tax year, or meet the combined 365-day rule over four years with at least 90 days in a tax year, you are a resident. This means that most freelancers and remote employees working from Bangladesh fall under "resident" taxpayer, and therefore must pay tax on all income, even if it comes from abroad."

"Now the question is: when income comes from abroad, can it be considered income of foreign origin? The source of income is a very important factor in determining tax liability. Section 27 states that income deemed to be accrued or arising in Bangladesh is taxable. If you provide services to a foreign institution while staying in the country, the money you receive in return for that service will be considered income earned from sources in Bangladesh, even if it arrives as remittance from abroad."

Bangladesh taxes depend on residency and income source under the Income Tax Act 2023. A person who lives in Bangladesh 183 days in a tax year or meets the 365-day combined rule becomes a resident and is taxed on global income. Section 27 deems income accrued or arising in Bangladesh taxable, and payments for services performed while physically in Bangladesh are treated as Bangladesh-sourced income. Remittances of foreign currency into Bangladesh do not automatically qualify as tax-free remittances. Most freelancers and remote employees working from Bangladesh therefore face Bangladeshi tax obligations on income received from abroad if they meet residency or source criteria.

Read at The Daily Star