10 Pc Tax Not Applicable For Freelancers: NBR

The National Board of Revenue (NBR) said that 10 percent tax deduction at source is not applicable against foreign income or remittances of freelancers. It is also reported that Bangladesh Bank has not given any instructions in this regard. According to the information published in the media recently, when there was confusion about this, the organization clarified the matter on Saturday (September 30).

In the explanation, it is said that last Wednesday, Bangladesh Bank Foreign Exchange Policy Department issued a circular in this regard. There, as per Income Tax Act, tax deduction at source on remittance amount received from service charge or revenue sharing is mentioned. Income of freelancers is not mentioned. Here the service sector refers to the income earned from shipping lines of Bangladesh by transporting foreign goods and income from indenting business. In no case are freelancers remittances taxed. 

Earlier on Wednesday, the Central Bank has directed authorized dealer banks engaged in foreign exchange transactions to collect tax at source on remittances received for services, revenue sharing as per section 124 of the Income Tax Act, 2023. The directive has been asked to be duly followed in the interests of national revenue collection.

A letter was sent from the tax commissioner's office on September 12 seeking this direction from the central bank. It is said that before remittances are remitted as individuals, a provision is made to deduct tax at source at the rate of 10 per cent. The amount deducted on account of tax will be deposited by the bank in favor of tax zone-11 of Dhaka as per rules.

According to NBR sources, the income of freelancers has also been exempted from tax in the new income tax law. As a result, freelancers do not have to pay any tax even if the money comes in the form of remittance to the country. However, any services from abroad, revenue sharing etc. will be tax deducted at source from remittances received as income from abroad.