NBR to use double taxation avoidance deal as a tool

Revenue sleuths have made a decisive move to reclaim siphoned-off assets of Bangladesh tycoons from five countries through claiming taxing rights under the double-taxation-avoidance agreement (DTAA) as the mechanism.
Revenue officials say the Central Intelligence Cell (CIC) has listed the UK, the USA, Canada, Singapore and the UAE, used by launderers as tax havens, and is seeking data from the owners and close associates of top business groups in Bangladesh.
Exchange of Information under DTAA would allow the taxmen to seek information from those countries, officials said.
If required, Mutual Legal Assistance Request can be made to conflate information about the business magnates on probe list.
Under the scanner are Nasa Group owner Nazrul Islam Mazumder and his family members, S. Alam Group owner Md Saiful Alam and his 17 close associates and family members, Summit Group owner Muhammad Aziz Khan and his 10 close associates, including family members, Beximco Group owner Salman Fazlur Rahman and his four family members, Aramit Group owner Saifuzzaman Chowdhury and his eight family members, former chief of the Detective Branch of Police Md Harun-Rashid and his spouse.
The intelligence wing has sent the list to the international tax wing of the National Board of Revenue (NBR) to proceed through the Ministry of Foreign Affairs to dig out and repatriate the assets through the modus operandi being followed.
Names of the business bigwigs fallen from grace following the August uprising that toppled the long-running Awami League regime and their family members along with their taxpayer identification numbers (TINs) have been furnished on the list.
A senior tax official says they are struggling to get detailed information about property and other assets of the persons in those countries.
"It is difficult to find out the individuals on the basis of names and TINs," he told The Financial Express.
Taxmen can seek information of the individuals under Double Taxation Avoidance Agreement signed with those countries.
Enforcement of those tax provisions would help the government at least claim the stolen money as reported by the international media, including Al Jazeera, the taxmen said.
In a confidential correspondence with the international tax wing, CIC Director-General Ahsan Habib wrote initial scrutiny of the tax returns of the conglomerates reveals that the offshore assets as reported by international media have not been shown in tax files.
"As per the Income Tax Act 2023, section 21, any concealed offshore asset is subject to paying taxes equivalent to the fair market price of total stolen assets," reads the letter, obtained by FE.
The Deputy Commissioner of taxes is liable to issue demand notices and realize the taxes, it adds.
"We are continuing the investigations on the basis of intelligence report where existence of offshore assets is suspected," the DG states in the correspondence.
However, tax officials say, the existing DTAAs need a revision as many of those have been signed some two decades ago.
Currently, Bangladesh has the trade-related agreements with 36 countries.
The country signed a DTAA with India in 1993, later updated in 2013.
The DTAA with France was signed in 1989. The deal with the Netherlands was signed in 1994, Singapore in 1982, Switzerland in 2010, Mauritius in 2012, Canada 1985, with the United States in 2007, the UK in 1980, Norway in 2006 and Malaysia in 1990.
Chartered accountant Snehasish Barua, fellow member of the Institute of Chartered Accountants of Bangladesh (ICAB), says the DTAA is enough to seek information of taxpayers from the signatory countries.
"I don't think any further agreement is required to exchange information. It is government-to- government agreement," he adds.
The trade agreement ensures that a person would not pay tax twice in two countries on the same income and, at the same time, s/he would not be able to escape payment of taxes on his income.
DTAA is an important provision in the income-tax ordinance to attract foreign direct investment (FDI) and facilitate transfer of technological know-how.
Provisions of this accord are not identical-it varies from country to country on the basis of the pattern of bilateral relationship.

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