A company paying dividend shall withhold tax at the rate of
— 20% on dividend payable to a non-resident company/fund/trust and resident company,
— 30% on dividend payable to any non-resident other than a company/fund/trust, and
— 10% (subject to furnishing Twelve-Digit Taxpayer’s Identification Number) or 15% on dividend payable to a resident person other than a company.
If stock dividend declared or distributed by a listed company exceeds the cash dividend in any income year, 10% tax on the whole amount of stock dividend will be applicable. Such tax cannot be adjusted with any other tax liability of the company. The provision is also applicable if any cash dividend is not declared or distributed in the income year.
A branch company shall withhold tax at the rate of 20% while remitting profit to Head Office.
However, in cases where dividend is payable to a shareholder resident in a country with which Bangladesh has signed a tax treaty, the rate mentioned in the tax treaty will apply subject to confirmation/certification from NBR.
Further, any distribution from mutual fund or alternative investment fund would be subject to tax like dividend declared by a company.
