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Bangladesh: Transfer pricing inquiries of multinational corporations

Bangladesh: Transfer pricing inquiries

The “Transfer Pricing Cell” of the National Board of Revenue (NBR) has initiated transfer pricing-related inquiries to all multinational enterprises (MNEs) operating in Bangladesh.

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The Transfer Pricing Cell recently asked 921 MNEs operating in Bangladesh to submit detailed information about their business profiles and related activities, to allow the tax authorities to scrutinise the MNEs’ international transactions and to determine compliance with the tax laws. Letters were issued to all 921 companies, requesting them to provide details by means of a prescribed format.

The information requested would provide a basic profile of the taxpayer entity—such as information about ownership, the period of operation, its activities, the status of employees, the names of top employees, information about bank accounts, and reports of expenses of Bangladesh operation.

Separately, the NBR announced it would be establishing another Transfer Pricing Cell for purposes of customs and value added tax. This proposed Transfer Pricing Cell would be established to verify the authenticity of transaction values between related parties (associated enterprises). The cell would be charged to investigate whether trade-based money laundering through transfer mispricing is present, and the office responsible for customs compliance would look for customs duty evasion through the mispricing of products in collaboration of two associated enterprises. The cell would further review the customs laws of neighboring countries (including India and Sri Lanka) and make recommendations how to proceed.

Read an April 2020 report prepared by KPMG International

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