Government's revenue authority has found out that some foreign liaison offices operating in Bangladesh to liaise with overseas companies themselves are allegedly doing business here underhandedly.
Sources said tax officials have detected that a number of foreign liaison offices are involved in income-generating activities in Bangladesh without getting on board to evade tax payment.
A senior income tax official said as per income tax law, foreign liaison offices are not supposed to pay tax as they are connecting offices of global businesses. All of their expenditures and salary payments for staffs should come from parent companies.
A horde of such liaison offices are operating in the country and most of them are submitting nil tax returns annually, he said.
Officials said there have been confusions created among the tax officials as to what portion of the global incomes of the liaisons have to be taxed as per law.
To address the problem, the income-tax wing under the National Board of Revenue (NBR) has formed a five-member committee to prepare guidelines for taxing the earnings of the foreign liaison offices.
The committee will have to submit its report by October 30 by clarifying nature of businesses and activity of foreign liaison offices, branch offices and representative offices listed or registered with the then Board of Investment (BoI) and the NBR.
As per section 18 of the income tax ordinance, the prevailing confusions over assessment of incomes of those companies and imposition of income tax have to be cleared by the committee.
A basic structure on tax assessment of those companies and a standardized draft will also have to be prepared by the panel.
Talking to the FE, one of the committee members said some of the tax officials are not clear as to whether income tax should be levied or on which portion of the incomes of the liaison companies.
"The Transfer Pricing Cell under the NBR will look into the issue. The liaison offices have to submit statement of international transactions (SIT) on mandatory basis to the taxmen," he said.
Earlier, the NBR had sought SIT from all multinational companies and liaison offices operating in Bangladesh. None of the liaisons did submit their SIT to the tax authority.
There are some hundred foreign liaison offices operating in Bangladesh.
The international tax wing of the NBR needs to focus on tax-related issues of the liaison offices to bring them under a standardized system, he added.
There are allegations that some of the liaison offices are carrying out business locally escaping the eye of the tax authority.
Tax officials said the allegation would be monitored intensively to check tax dodging.
doulot_akter@yahoo.com
Few foreign liaisons in BD secretly doing business
Doulot Akter Mala | Published: September 21, 2016 00:00:00 | Updated: February 01, 2018 00:00:00
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