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| Income deemed to accrue or arise in Bangladesh(ITA-2023) |
Income deemed to accrue or arise in Bangladesh under Section 27 | Bangladesh Income Tax Act -2023:
As per section-27(ITA-2023),
The following types of income shall be treated as income accruing or arising in Bangladesh:
(a) Income from Employment:
Income under the head “Income from employment” shall be deemed to arise in
Bangladesh if:
(i) it is earned in Bangladesh; or
(ii) it is paid by the Government of
Bangladesh or any local authority to a Bangladeshi citizen serving such
government or authority, regardless of where it is paid.
(b) Income from Business, Property, or
Transactions:
Any income arising directly or indirectly from the following sources shall be
considered as arising in Bangladesh:
(i) any permanent establishment in
Bangladesh;
(ii) any property, asset, right, or
source of income (including intangible assets) located in Bangladesh;
(iii) the transfer of assets
situated in Bangladesh;
(iv) the sale of goods or services
through electronic means to customers in Bangladesh;
(v) the use of any intangible
property within Bangladesh.
Explanation: For the purposes of this section—
(a) Shares of a company resident in
Bangladesh shall be treated as property located in Bangladesh, regardless of
ownership.
(b) Intangible property shall be
deemed located in Bangladesh if:
(i) it is
registered in Bangladesh; or
(ii) it is
owned by a non-resident but connected to a permanent establishment in
Bangladesh.
(c) Transfer of shares in a
non-resident company shall be considered a transfer of assets in Bangladesh to
the extent that the share value is attributable to assets located in
Bangladesh.
(d) Dividends:
Any dividend paid outside Bangladesh by a Bangladeshi company shall be treated
as income arising in Bangladesh.
(e) Interest Income:
Interest income shall be deemed to arise in Bangladesh if it is payable:
(i) by the Government of Bangladesh;
(ii) by a resident, except where the
borrowed funds are obtained from outside Bangladesh and used for business or
income generation outside Bangladesh;
(iii) by a non-resident, where the
borrowed funds are used for business or income generation in Bangladesh.
(f) Fees for Technical Services:
Such fees shall be treated as income arising in Bangladesh if payable:
(i) by the Government of Bangladesh;
(ii) by a resident, except where the services are used for business or income
generation outside Bangladesh;
(iii) by a non-resident, where the
services are used for business or income generation in Bangladesh.
(g) Royalty Income:
Royalty shall be deemed to arise in Bangladesh if payable:
(i) by the Government of Bangladesh;
(ii) by a resident, except where it
relates to rights or services used outside Bangladesh or for earning income
from outside Bangladesh;
(iii) by a non-resident, where the
rights or services are used for business or income generation in Bangladesh.
(h) Insurance Premiums:
Insurance or reinsurance premiums accrued
or payable by a resident or non-resident to cover risks within Bangladesh shall
be treated as income arising in Bangladesh.
Frequently Asked Question(FAQs):
1.What is income deemed to accrue or arise in Bangladesh?
Income deemed to accrue or arise in Bangladesh refers to income that is treated as earned within Bangladesh under Section 27, even if it is received outside the country.
2. Which types of income are covered under Section 27?
Section 27 covers employment income, business income, and other earnings connected to Bangladesh, regardless of where they are paid or received.
3. Is foreign income taxable in Bangladesh under Section 27?
Yes, foreign income may be taxable if it is considered to have a source or connection within Bangladesh under the provisions of Section 27.
4. Does salary earned abroad count as income in Bangladesh?
Salary earned abroad can be deemed to accrue in Bangladesh if it relates to services rendered within Bangladesh or is paid by the Bangladesh government.
5. Why is Section 27 important for taxpayers in Bangladesh?
Section 27 ensures proper taxation by defining when income is considered sourced in Bangladesh, helping prevent tax avoidance.