Dhaka is considering joining BEPS framework of the OECD to check alleged tax evasion committed by the multinational companies through siphoning their profits surreptitiously, officials said.
Getting associated with the Organisation for Economic Cooperation and Development (OECD) oversight mechanism would enable Bangladesh to effectively check the tax evasion by way of interlinking and sharing information with its 35 member-countries, they said.
An invitation from the OECD headquarters in this regard is under review by the government.
The secretary-general of the OECD, in a letter to Finance Minister AMA Muhith, formally invited Bangladesh to be enlisted as a BEPS associate, the sources said.
BEPS (base erosion and profit shifting) refers to tax-planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity.
To be an associate of the arrangement, Bangladesh will have to agree on at least four standards of comprehensive BEPS package.
It will have to commit on implementing those for being enlisted as associate member of the BEPS project of OECD, they said.
The country will have to provide full cooperation on exchange of information and on policymaking decision under the BEPS project, the officials said.
The annual associate-membership fee is 20,000 euro.
A conference of BEPS associates was held from June 29 to July 01 last in Kyoto, Japan, where a Bangladesh delegation was present.
In the letter, the OECD secretary-general requested the Bangladesh government to respond as to whether Bangladesh is interested to be a BEPS-project associate.
Md Sirajul Islam, president of the tax appellate tribunal of the National Board of Revenue (NBR), who joined the conference, said joining as associate member would need permission from the government high-ups including the Prime Minister.
"Bangladesh will inform its decision on the invitation of the OECD in its next conference to be held in France in January next," he added. Currently, there are 35 associate members of BEPS outfit, including neighbouring India, he said.
It has been alleged that multinational companies use BEPS tactics to gain competitive advantage over enterprises that operate at a domestic level. Moreover, when taxpayers see multinational corporations legally avoiding income tax, it undermines voluntary compliance by all taxpayers.
The OECD has established an inclusive framework on BEPS, which allows interested countries and jurisdictions to work with OECD and G20 members on developing standards on BEPS- related issues and reviewing and monitoring the implementation of the whole BEPS Package.
Members of the inclusive framework will develop a monitoring process for the four minimum standards as well as put in place the review mechanisms for other elements of the BEPS Package. The monitoring of the four minimum standards will ensure that all members, as well as jurisdictions of relevance, comply with the standards in order to ensure a level playing field.
All countries and jurisdictions joining the BEPS platform will be able to review their own tax systems and to identify and remove elements raising BEPS risks.
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