The Non-Domicile Remittance Basis
Tax Advantages for Bangladeshi Entrepreneurs in Ireland
“I’m earning good money from my business in Dublin, but I also have investments back in Bangladesh. How does Irish tax law treat this foreign income?” This question comes up in nearly every consultation I have with Bangladeshi entrepreneurs who’ve established businesses here in Ireland.
The answer lies in understanding a powerful tax concept called the “remittance basis” – a system that could potentially save you thousands of euros in taxes each year when properly utilized.
What Exactly Is the Remittance Basis of Taxation?
The remittance basis is a special tax treatment available to people who are tax resident but non-domiciled in Ireland. As we covered in our previous article regarding tax residency versus domicile, most Bangladeshi entrepreneurs living in Ireland fall into this category.
Under this system:
- Your Irish income (business profits, employment income, Irish rental income) is fully taxable in Ireland
- Your foreign income and capital gains are only taxed in Ireland if and when you bring (“remit”) them to Ireland
- Income earned and kept outside Ireland can legally remain outside the Irish tax net
This creates a legitimate tax planning opportunity that many of my Bangladeshi clients have successfully leveraged.
“I’ve been able to grow my investments in Bangladesh while building my tech business in Dublin. Understanding the remittance basis has been crucial to my financial strategy.” – Tasneem R., Software company founder and DublinLedgers client
How the Remittance Basis Benefits Bangladeshi Entrepreneurs: Real Examples
Let me illustrate how this works with real scenarios I’ve encountered with clients:
Case Study: Kamal’s Dual-Country Income Strategy
(Due to Privacy the names and nature of transactions are changed)
Kamal runs a successful consulting business in Cork while maintaining investments in Bangladesh. His annual financial picture looks like this:
- Irish consulting income: €95,000 (fully taxable in Ireland)
- Rental income from two Dhaka properties: €18,000
- Dividend income from Bangladesh stocks: €5,000
Without proper tax planning, Kamal might have unnecessarily paid Irish tax on his entire €23,000 of Bangladesh income. Instead, by understanding his non-domicile status and the remittance basis:
- He keeps his Bangladesh rental and dividend income in a dedicated Bangladesh bank account
- He uses this growing fund for further investments in Bangladesh
- He only brings to Ireland what he needs for living expenses
- He legally defers Irish taxation on funds kept in Bangladesh
This approach has helped Kamal build significant wealth in Bangladesh while still enjoying entrepreneurial success in Ireland.
What Exactly Counts as a “Remittance” to Ireland?
Understanding what constitutes a “remittance” is crucial for proper tax planning. According to Revenue guidelines, a remittance occurs when:
- You physically bring money from foreign accounts into Ireland
- You transfer money from a foreign account to an Irish account
- You use a credit card linked to a foreign account to pay for goods or services in Ireland
- You pay debts in Ireland using foreign income
- Someone else brings your foreign income into Ireland on your behalf
Common Remittance Misconceptions
Many clients initially misunderstand these rules. For example:
- Using a Bangladesh credit card in Ireland: This IS considered a remittance if the card is paid off with foreign income
- Paying for an Irish investment from a Bangladesh account: This IS a remittance
- Paying for a Bangladesh investment from a Bangladesh account: This is NOT a remittance
- Transferring money between foreign accounts: This is NOT a remittance (as long as the money stays outside Ireland)
Getting these distinctions right is essential for effective tax planning.
The Non-Dom Tax Calendar: Timing Your Remittances
One powerful strategy my clients use is careful timing of remittances. Ireland’s tax year runs from January 1st to December 31st, creating planning opportunities:
Strategic Timing Example:
Farah, a restaurant owner in Galway, needs to bring €30,000 from her Bangladesh savings to Ireland to expand her business. Instead of transferring the full amount in December, she:
- Transfers €15,000 in late December 2025
- Transfers the remaining €15,000 in early January 2026
This splits the tax impact across two tax years, potentially reducing her overall tax rate by keeping her in lower tax brackets each year.
Exceptions to the Remittance Basis Rules You Must Know
While the remittance basis offers significant advantages, it’s not unlimited. Foreign income from certain sources is still taxable in Ireland regardless of whether you bring it to Ireland:
- Employment income for duties performed in Ireland (even if paid to a foreign account)
- Income from Irish real estate
- Director’s fees from Irish companies
- Income from certain offshore structures specifically designed to avoid tax
Understanding these exceptions helps prevent costly compliance mistakes.
Record-Keeping Requirements: The Foundation of Remittance Planning
If you’re using the remittance basis, proper documentation is absolutely essential. Revenue can request proof of the source of your funds during audits.
What records should you maintain?
- Separate bank accounts for Irish and foreign income
- Clear documentation of the source of all foreign income
- Records of all remittances to Ireland
- Evidence supporting your non-domicile status
- Foreign tax payments (for potential double tax relief)
I recommend maintaining these records for at least six years, in line with Revenue’s potential audit timeframe.
How to Calculate the Tax on Remitted Foreign Income
When you do bring foreign income to Ireland, how is it taxed? Here’s the process:
- Foreign income is added to your Irish income for the year of remittance
- The combined income is taxed at your marginal tax rate (up to 40% plus USC and PRSI)
- You may claim relief for foreign tax already paid on that income under relevant double taxation agreements, however as of today, no such agreement is in place between these two countries.
Calculation Example:
Rahim remits €20,000 of Bangladesh interest income to Ireland. He’s already in the higher tax bracket from his Irish business income:
- Irish tax due: €8,000 (40% of €20,000)
- Less foreign tax already paid in Bangladesh: €2,000
- Net additional Irish tax due: €6,000
This is a simplified example – individual circumstances vary, and Ireland’s double taxation agreement with Bangladesh impacts the final calculation.
Common Pitfalls Bangladeshi Entrepreneurs Should Avoid
In my years helping Bangladeshi business owners with their taxes, I’ve seen several common mistakes:
- Assumption 1: “I can use my Bangladesh bank card in Ireland without tax consequences”
- Reality: This counts as a remittance subject to Irish tax
- Assumption 2: “If I’ve paid tax in Bangladesh, I don’t need to declare the income in Ireland”
- Reality: You still need to report it on your Irish return, even if using the remittance basis
- Assumption 3: “Once I’m resident in Ireland for 8+ years, the remittance basis no longer applies”
- Reality: Unlike the UK, Ireland has no time limit on the remittance basis (a significant advantage)
Avoiding these misconceptions is crucial for proper tax compliance.
Long-Term Tax Planning: Making the Most of Your Dual Status
For Bangladeshi entrepreneurs committed to building a life in Ireland while maintaining connections to Bangladesh, consider these longer-term strategies:
- Investment Location Planning: Strategically decide where to hold different types of investments
- Pension Considerations: Evaluate whether to establish pension arrangements in Ireland, Bangladesh, or both
- Business Expansion: Consider tax-efficient structures for expanding your business across both countries
- Estate Planning: Plan for the tax-efficient transfer of assets in both jurisdictions
Each of these deserves careful consideration with professional advice tailored to your circumstances.
What To Do Next: Get a Personalized Remittance Basis Assessment
At DublinLedgers, we’ve developed a specialized approach for Bangladeshi entrepreneurs navigating Irish tax regulations while maintaining assets in Bangladesh.
Our team includes advisors who understand both tax systems and can help you create a comprehensive strategy that:
- Optimizes your tax position across both countries
- Ensures full compliance with all reporting requirements
- Creates a roadmap for wealth building that leverages your non-domicile status
Book a consultation today to receive a personalized assessment of how the remittance basis can work for your specific situation.
Are you already using the remittance basis for your tax planning? What challenges have you faced in managing finances across both countries? Share your experiences in the comments below.
FAQ: Remittance Basis of Taxation for Bangladeshi Entrepreneurs
Does the remittance basis apply automatically if I’m non-domiciled? Yes, if you’re resident but non-domiciled in Ireland, the remittance basis automatically applies to your foreign income and capital gains. However, you still need to correctly report your status on your tax return.
Can Revenue challenge my non-domicile status? Yes, Revenue can examine your circumstances if they believe you’ve become domiciled in Ireland. Maintaining evidence of your continued connection to Bangladesh and your intention to eventually return there can help support your non-domicile claim.
I’ve been in Ireland for 15 years. Can I still use the remittance basis? Yes. Unlike the UK, Ireland doesn’t currently impose time limits or additional charges on long-term residents using the remittance basis, making it particularly valuable for long-term planning.
If I reinvest my Bangladesh income without bringing it to Ireland, is it still tax-free in Ireland? Generally yes. Foreign income that’s reinvested outside Ireland (e.g., in more Bangladesh properties or investments) typically remains outside the Irish tax net under the remittance basis.
Can my non-domicile status affect inheritance tax as well as income tax? Absolutely. Your domicile status has significant implications for inheritance and gift tax planning. This is covered in our article on Inheritance Planning for Bangladeshi Business Owners in Ireland.
If my spouse is Irish-domiciled but I’m Bangladesh-domiciled, how does this affect our taxes? Mixed-domicile couples face special considerations. The non-domiciled spouse can still claim the remittance basis, but careful planning is needed, especially for jointly held assets.
Contact DublinLedgers today for expert tax advice tailored to Bangladeshi entrepreneurs in Ireland. Our specialized team offers consultations in both English and Bengali.
Related Articles:
- Irish Tax Residency vs. Domicile: Essential Guide for Bangladeshi Business Owners
- Legal Ways to Transfer Money from Bangladesh to Ireland: A Complete Guide
- Undisclosed Foreign Assets? Smart Tax-Saving Strategies for Bangladeshi Business Owners in Ireland
- Tax Planning for Bangladeshi Restaurant Owners in Ireland: Managing Income from Multiple Countries