Banks to cut tax on interest against foreign currency deposits

Staff Correspondent | Published: 00:00, Jul 10,2019


Bangladesh Bank on Tuesday asked all the banks to deduct applicable taxes on the interest that were generated from the deposits in the non-resident foreign currency deposit (NFCD) accounts.

The BB’s instruction was issued in line with a statutory regulatory order of the National Board of Revenue issued on June 23 this year.

The NBR SRO withdrew its earlier instruction of 1982 when it exempted taxes on the interest income generated from the deposits in the NFCD accounts.

As per the general policy of NBR, banks are supposed to deduct 10 per cent tax on the interest income generated from deposits in any account.

If any accountholder does not have any Tax Identification Number, banks charge 15 per cent tax on the interest income.

The policy change would bring equality in taxation between the residents and non-residents, NBR officials said.

Meanwhile, in another circular, BB asked banks to report properly through ‘online international card monitoring system’ of the central bank for the foreign exchange released through international cards (prepaid/debit/credit) for travelling abroad on health ground.

Bangladeshi nationals are allowed to spend $10,000 or equivalent amount of foreign currency while travelling abroad for the medical purpose. They can also use international cards for this purpose.

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