Visa holders · From Bangladesh
Up to $8,000 a year of pay is free of federal income tax for students moving to the US from Bangladesh. Taxes on that pay start when your studies end or you get a green card or citizenship, not when you become a resident alien.
The exemption comes from Article 21(2) of the US-Bangladesh treaty. Students can claim it for any number of years, while business and technical apprentices get two. It covers anyone who was a resident of Bangladesh just before coming to the US mainly to study. Scholarships, grants and money sent from home for your upkeep and studies are exempt as well. A nonresident alien claims it by giving the employer Form 8233, and a resident alien gives the payer Form W-9 with a statement.
Updated · Sources
What Bangladesh can still tax
- 90 days
- in a July-to-June income year make you a Bangladeshi resident for all of it, after 365 days in the four years before.
- 10%
- is the tax Bangladesh deducts from Sanchayapatra profit, the same rate at which the treaty caps its tax on a US resident’s interest.
- 15%
- of the gain is Bangladesh’s tax on land or a flat held over five years, if you file there. A sale within five years is taxed at regular rates.
These are the rules for income year 2026-27, which began on July 1, 2026. A payer may withhold more from a non-resident, so check what was taken.
What does Bangladesh tax in the year you move, and after?
Bangladesh’s income year runs from July 1 to June 30, and residence is decided for the whole year.
You are still in Bangladesh on September 28
If you are there every day from July 1, your 90th day in Bangladesh is September 28. If you spent 365 days there in the four years before, reaching that date keeps you resident until June 30. The US, meanwhile, may treat you as resident from the day you land.
You send your US pay home through a bank
In a year you are still resident, US pay you send home through a bank should stay free of Bangladeshi tax. Bangladesh excludes foreign earnings a Bangladeshi citizen brings home through legal remittance channels. Bangladesh can tax US pay you keep in the US, with a credit for the US tax on it.
You go back for a long visit
The four-year look-back keeps running after you move. A visit of 90 days or more in any of the next four income years can make you resident again. If the US counts you as resident too, Article 4(2)’s tie-breaker decides which country is your residence for the treaty. Claiming it on a US return takes Form 8833.
You leave for good
If you leave for good and expect to earn nothing in Bangladesh, apply to cancel your tax registration (TIN).
After your residence ends, Bangladesh taxes only income that arises there, such as rent, interest and gains on property. Your US salary is not taxed there. If you have no permanent establishment (a fixed place of business) in Bangladesh, you need not file a return there. In that case, from July 1, 2026, the tax deducted at source on that income is your final tax.
A Bangladeshi student who becomes a resident alien can owe no federal income tax on $20,000 of campus pay.
F-1 days usually do not count toward the substantial presence test for five calendar years, and a part year counts as a full one. From the sixth year they usually count, and a student here 183 days that year usually becomes a resident alien.
Years 1 to 5, as a nonresident alien
$12,000
Article 21(2) exempts $8,000. A nonresident alien gets no standard deduction, so the other $12,000 is taxable.
Year 6, as a resident alien on the same F-1
$0
The $8,000 stays exempt for a resident alien still studying, and the standard deduction covers the remaining $12,000.
With a green card
$3,900
A green card ends the Article 21(2) student exemption under the saving clause, so the standard deduction comes off the full $20,000.
Each figure is taxable income under 2026 rules, before any tax rate applies. The nonresident figure uses a standard deduction of zero, under IRC 63(c)(6)(B). The resident figures use the $16,100 single standard deduction for 2026 (Rev. Proc. 2025-32). They assume you are in the US on January 1 of year 6. If you return later, that year is likely dual-status, with no standard deduction. The figures leave out state tax.
What does the US-Bangladesh tax treaty change once only the US counts you as resident?
The US-Bangladesh income tax convention was signed in Dhaka on September 26, 2004, and entered into force on August 7, 2006. It applies to most taxes from January 1, 2007. Once you are a US resident, it limits what Bangladesh may tax. Its saving clause lets the US keep taxing you under its own law.
| Bangladesh | US | |
|---|---|---|
| Interest from a payer in Bangladesh | Up to 10% Article 11(2) | Taxed With a credit for Bangladesh’s tax |
| Dividends from a Bangladeshi company | Up to 15% Article 10(2) | Taxed With a credit for Bangladesh’s tax |
| Gain on land or a flat in Bangladesh | Taxed Article 13(1) | Taxed Figured in dollars |
| Gain on listed Bangladeshi shares, unless the company mainly owns property | Not taxed Article 13(4) | Taxed No Bangladeshi tax to credit |
| A private pension from a past employer | Not taxed Article 19(1) | Taxed |
| A Bangladesh government pension | Exempt Under Bangladesh’s own law | Exempt unless you hold a green card or US citizenship Article 20(2) |
Article 23(1) lets any tax under Bangladesh’s Income Tax Act count toward the US credit, within the Form 1116 limit. Anything a payer withholds above a treaty cap stays outside the US credit, so reclaim it from Bangladesh. No Social Security agreement links the two countries. US Social Security and Medicare therefore generally apply to your US pay once any student exemption ends.
Which Bangladeshi holdings bring extra US forms or tax?
Units in a Bangladeshi mutual fund
Each Bangladeshi mutual fund you own generally needs its own Form 8621 every year. These funds are generally trusts registered with the Bangladesh Securities and Exchange Commission. US rules usually treat such a trust as a corporation, and so as a PFIC (passive foreign investment company). A sale without an election charges the top rate, plus interest, on the gain spread to your earlier US-resident years.
A provident fund paid out after you arrive
A provident fund balance paid before your US residency starting date is generally outside US tax. If it is paid after that date, the employer’s share and the fund’s growth may be US income. The IRS has issued no guidance on these funds. A recognized fund pays out when you leave your employer, and Bangladesh exempts it after five years of continuous service.
Certificates and bonds left off the FBAR
A Sanchayapatra or bond held through a bank, post office or savings bureau is likely an FBAR account. One held outside any account can still go on Form 8938 as a foreign bond. A bond bought in a parent’s name may still be yours to report, since ownership decides who files.
Tax collected when you sell land or a flat
Crediting the registrar’s tax on a property sale in the US is a treaty position you may need to disclose on Form 8833. That tax is based on the property’s area or deed value, not on your gain. The registrar collects it from the seller before registering the sale deed. From July 1, 2026, it is your final Bangladeshi tax if you need not file there. If you do file, your gain is taxed at the 15% or regular rates. Any part of the registrar’s tax above your assessed tax is then refundable.
From your first Form 8233 to a flat sold in Dhaka, we handle the US side of your move.
Valim’s licensed CPAs prepare your US returns, working alongside the accountant who files for you with Bangladesh’s National Board of Revenue.
- We prepare every federal and state return you owe, starting with your first. That first return is a Form 1040-NR, or a dual-status return if residency starts mid-year. While you are an exempt student, we add Form 8843.
- We prepare the Form 8233 that stops withholding on your first $8,000 of pay, and claim the exemption on every return.
- We work out what a green card would add to your US tax while you are still studying. We also time a provident fund payout or a land sale against your residency starting date.
- The FBAR we prepare lists your bank, certificate and fund accounts in Bangladesh, and Form 8938 repeats them above its thresholds. We file Form 8621 for each Bangladeshi fund in every year it is required. We also file Form 5471 for a Bangladeshi company where one is due. Your instant quote prices these forms per account, per fund and per company.
- We count Bangladesh’s final tax on Sanchayapatra profit, dividends, rent or a land sale toward your Form 1116 credit, up to the US limit. We set your quarterly estimated payments to match the profit your certificates and bonds pay out.
- Once you are a US resident, we file Form 3520 whenever gifts from one giver and their relatives pass $100,000 in a year. Tuition your family pays straight to your university does not count toward that line.
- We reply to IRS and state notices on any return we prepared, a challenge to your student exemption included, within the fee.
- Individual return
- from $195
- Business return
- from $495
We quote a flat fee before work starts. We do not bill hourly.
How do the treaty, your salary, Sanchayapatra and family gifts work once you leave Bangladesh?
What is the double taxation treaty in Bangladesh?
For someone moving to the US, it is the US-Bangladesh tax treaty, in force since August 7, 2006. It caps Bangladesh’s tax on a US resident’s interest at 10% and on dividends at 15%. Each country credits the other’s tax where both may tax the same income. Students also keep up to $8,000 a year of US pay free of federal income tax. Under its saving clause, each country still taxes its own residents by domestic law, and the US also taxes its citizens, outside listed exceptions.
How much tax should I pay on my salary in Bangladesh?
Your salary is taxed at Bangladesh’s resident rates for any July-to-June income year in which Bangladesh still counts you as resident. Under the 2026-27 budget proposals, a resident pays no tax on the first Tk 375,000 of income. The proposed bands after that are 10%, 15%, 20% and 25%, with 30% above Tk 3,575,000. For women and anyone 65 or over, the proposed tax-free amount is Tk 425,000. One-third of your salary is excluded first, up to Tk 500,000. Once you are non-resident for the income year, pay for work you do in the US is not Bangladeshi income at all.
Is interest on my Sanchayapatra or Wage Earner Development Bond taxable in the US?
Yes, the US taxes Sanchayapatra, Wage Earner Development Bond and US dollar bond profit as interest from your US residency starting date. Quarterly or half-yearly profit is taxed in the year it is credited. A 5-year Sanchayapatra that pays only at maturity is likely taxed as the profit builds up. The 10% Bangladesh deducts from Sanchayapatra profit can count toward a foreign tax credit, up to the tax you finally owe there. Bangladesh exempts the bonds’ profit, so no Bangladeshi tax offsets the US tax on them.
Can my parents in Bangladesh send me money tax-free?
Yes, for US tax: a gift is not income, and you owe nothing on it. Once you are a US resident, gifts go on Form 3520 when one giver, together with that giver’s relatives, passes $100,000 in a year. In Bangladesh, a parent’s gift carries no gift tax. While you are still a Bangladeshi resident, it is also free of income tax if both of you show it in your returns. Bangladesh Bank’s September 2025 circular let banks send study money against your I-20, while money for upkeep abroad needed Bangladesh Bank’s prior approval. Ask the bank whether that still applies.
Sources
- US-Bangladesh income tax convention (2004)
- Treasury, technical explanation of the US-Bangladesh convention
- IRS, Publication 901 (Rev. September 2024), U.S. Tax Treaties
- Bangladesh, Income Tax Act 2023 (Ministry of Law, consolidated Bangla text)
- National Board of Revenue, Income Tax Act 2023 (Authentic English Text)
- Bangladesh, Finance Act 2026 (Act No. 96 of 2026)
- Bangladesh, Finance (2025-2026 Financial Year) Act 2026 (Act No. 89 of 2026)
- Ministry of Finance, Budget Speech 2026-27
- Bangladesh, Gift Tax Act 1990
- Directorate of National Savings, savings certificates
- Directorate of National Savings, Wage Earner Development Bond
- Bangladesh Bank, FE Circular No. 37 (September 30, 2025)
- Bangladesh Securities and Exchange Commission, EDGE Bangladesh Mutual Fund 1 prospectus (archived copy)
- IRS, Publication 519 (2025), U.S. Tax Guide for Aliens
- IRS, Instructions for Form 8233 (Rev. December 2025)
- IRS, Form 8843 (2025), Statement for Exempt Individuals
- IRS, Form W-9 (Rev. March 2024), Request for Taxpayer Identification Number and Certification
- IRS, Form 8833 (Rev. December 2022), Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)
- IRS, Rev. Proc. 2025-32 (2026 inflation adjustments)
- 26 U.S.C. § 63, Taxable income defined
- 26 U.S.C. § 7701, Definitions
- 26 U.S.C. § 901, Taxes of foreign countries and of possessions of United States
- 26 C.F.R. § 1.901-2, Income, war profits, or excess profits tax paid or accrued
- IRS, Instructions for Form 1116
- IRS, Publication 550 (2025), Investment Income and Expenses
- 26 U.S.C. § 1272, Current inclusion in income of original issue discount
- 26 U.S.C. § 72, Annuities; certain proceeds of endowment and life insurance contracts
- 26 U.S.C. § 1297, Passive foreign investment company
- 26 C.F.R. § 1.1298-1, Section 1298(f) annual reporting for PFIC shareholders (Form 8621)
- 31 C.F.R. § 1010.350, Reports of foreign financial accounts
- IRS, Instructions for Form 8938
- IRS, Instructions for Form 3520 (Rev. December 2025)
- 26 U.S.C. § 102, Gifts and inheritances
Reviewed and updated October 2026. General information, not advice for your situation.