Bangladesh Transfer Pricing Policy

Bangladesh Transfer Pricing Policy

Is your Bangladesh subsidiary necessary to deliver TP (Transfer Pricing) Form? Attach what kinds of documents?
This web page uses Questions and Answers to let you know how to judge.

Email: dac4ww@evershinecpa.com
A-16, 1st Floor, Aruna Asaf Ali Marg, Qutub Institutional Area, Dhaka, 110067, Bangladesh
Manager Punit Singh Negi, speak in Bangladeshn and English.
Skype: cspunitnegi

TP-Q-10
Why kinds of scenarios will be adopted TP policy? What is the relevance between DTA and TP policy?
TP-A-10
When Bangladeshn Tax entity would like to pay out whatever business profits, Royalty, Technical Services fees, Interests, trading amount, etc., it will adopt DTA tax rate. Its judge criteria, please see Bangladesh Tax Treaties with Other Countries. <click me
But if want to verify the above-mentioned amount if reasonable, will adopt Bangladesh’s TP Policy.

TP-Q-20:   

在孟加拉甚麼情況下, WFOE 外商投資企業不需要同時處理TP 申報和文件申報?

What are the scenarios in Bangladesh, that a Wholly Foreign-Owned Entity (WFOE) is exempted from compliance of Transfer Pricing (TP) declaration and TP documentation?

TP-A-20:

*You are exempted from TP declaration if your specified domestic transactions with related enterprises do not exceed INR 20 Crore and you do not have any international transaction.
*You are exempted from TP documentation if your specified domestic transactions with related enterprises do not exceed INR 20 Crore and your international transaction do not exceed INR 1 Crore.

TP-Q-30:   

在孟加拉甚麼情況下, WFOE 外商投資企業需要向該國的稅務局發送TP 申報? 甚麼是申報單名稱?

What are the scenarios in Bangladesh, that a Wholly Foreign-Owned Entity (WFOE) is required to submit a TP declaration to the country’s tax bureau? What is the name of the TP declaration form?

TP-A-30:

Specified domestic transactions with related enterprises exceeding INR 20 Crore or you have at least one international transaction.
It is the TP Report / Form 3CEB.

TP-Q-40:   

在孟加拉甚麼情況下, WFOE 外商投資企業需要向該國稅務局發送TP 申請和文件? 甚麼 declaration 表單名和文檔名?

What are the scenarios in Bangladesh, that a Wholly Foreign-Owned Entity (WFOE) is required to submit TP declaration and TP documentation to the country’s tax bureau? What is the name of the TP declaration form and TP documentation form?

TP-A-40:

(a) Specified domestic transactions with related enterprise exceeding INR 20 Crore OR you have at least one international transaction with related enterprise – TP Report / Form 3CEB

(b) Specified domestic transactions with related enterprise exceeding INR 20 Crore OR international transaction with related enterprise exceeding INR 1 Crore – Local File

(c) Fulfill (b) above and two of the below conditions.

(1) Consolidated Group Revenue exceeding INR 500 Crore and

(2) International transactions exceeding INR 50 Crore OR

(3) Having intangible property exceeding INR 10 Crore

– Master File – Form 3CEAA

(d) Fulfill (b) above and have more than 1 constituent entity in Bangladesh

– Master File – Form 3CEAB

(e) Fulfill (b) above and have Consolidated Group Revenue in previous year >INR 6,400 Crore

(1) When Parent Company is Non-resident

– CbC Report – Form 3CEAC

(2) When Parent company is a resident or Alternate Reporting Entity in Bangladesh

– CbC Report – Form 3CEAD

(3) Designation constituent entity for single filing of CbC report

– CbC Report – Form 3CEAE

Bangladesh TRANSFER PRICING for professionals

Companies involved in the following transactions with Associated Enterprise are mandated to comply with the Transfer Pricing Regulation in Bangladesh and therefore required to prepare Transfer Pricing (TP) Documentation.

  1. Specified Domestic Transactions exceeding INR20 Crore (200 million) per year
  2. International Transactions exceeding INR1 Crore (10 million) per year

Section 92-92F of Income Tax Act 1962 defines the term of transactions above.

Section 92A defines that an Associated Enterprise with relationships involves capital control and management control.
Generally, capital control includes direct or indirect holding of voting shares for at least 26% by the other enterprise or both enterprises by the same person. While management control includes more than 50% of the board of directors are being appointed.

Threshold required for TP report and TP documentation:

  Specified Domestic Transactions International Transactions
TP report/ Form 3CEB INR20 Crore At least 1 transaction
TP documentation INR20 Crore INR1 Crore

Due dates and respective threshold:

TP-Q-10

Why kinds of scenario will be adopted TP policy? What is relevance between DTA and TP policy?

TP-A-10

When Bangladesh Tax entity would like to pay out whatever Business profits, Royalty, Technical Services fees, Interests, Trading amount etc., it will adopt DTA tax rate. Its judge criteria, please see the Bangladesh Treaty Page.
But if want to verify the above-mentioned amount if reasonable, will adopt Bangladesh TP Policy.

TP-Q-20:  

在孟加拉甚麼情況下, WFOE 外商投資企業不需要同時處理TP 申報和文件申報?
What are the scenarios in Bangladesh, that a Wholly Foreign-Owned Entity (WFOE) exempted from compliance of Transfer Pricing (TP) declaration and TP documentation?

TP-A-20:

WFOE is exempted from TP declaration – Statement of international transactions if no international transactions entered.
WFOE is exempted from TP declaration – Report from a chartered or cost and management accountant, if an aggregate value of transactions do not exceed 30 million takas in a financial year.
Bangladesh exempt all WFOE from TP documentation.

TP-Q-30:  

在孟加拉甚麼情況下, WFOE 外商投資企業需要向該國的稅務局發送TP 申報? 甚麼是申報單名稱?
What are the scenarios in Bangladesh, that a Wholly Foreign-Owned Entity (WFOE) required to submit TP declaration to country’s tax bureau? What is the name of the TP declaration form?

TP-A-30:
Statement of international transactions – if international transactions entered.
Report from a chartered or cost and management accountant – Aggregate value of transactions exceeds 30 million takas in a financial year.

TP-Q-40:  

在孟加拉甚麼情況下, WFOE 外商投資企業需要向該國稅務局發送TP 申請和文件? 甚麼 declaration 表單名和文檔名?
What are the scenarios in Bangladesh, that a Wholly Foreign-Owned Entity (WFOE) required to submit TP declaration and TP documentation to country’s tax bureau? What is the name of the TP declaration form and TP documentation form?

TP-A-40:
Same as above.
There are no CbC reporting obligations in Bangladesh.

Bangladesh TRANSFER PRICING for professionals

Overview

In Bangladesh, international transactions are governed and regulated by the transfer pricing provisions under the Ordinance and are required to meet the arm’s length principle generally in line with the OECD’s Transfer Pricing Guidelines and the UN Practical Manual on Transfer Pricing.

TP provisions applied only to international transactions.
If an international transaction is found not to be at arm’s length, the DCT can determine the arm’s length price based on any information, documentation, or other evidence available to him or her.
The DCT may, with prior approval of the NBR, refer the matter to the Transfer Pricing Officer (TPO).
International transaction refers to:

  1. Transaction between associated enterprises, either or both of which are nonresident.
  2. Involving the purchase, sale, or lease of tangible or intangible property, provision of services, financing.
  3. This can be by mutual agreement or arrangement between one or more associated enterprises, or by prior agreement entered by an enterprise with a resident or nonresident person, includes cost contribution/ sharing arrangement.

Associated Enterprise [S.107A(2)]

  1. One enterprise participates, directly or indirectly, or through one or more intermediaries, in the management, control or capital of the other enterprise, or of both enterprises.
  2. The same person or persons participate, directly or indirectly, or through one or more intermediaries, in the management, control or capital of both enterprises.
  3. One enterprise holds, directly or indirectly, shares carrying more than 25% of the voting power in the other enterprise or in both enterprises.
  4. The same person or persons control shares carrying more than 25% of the voting power in both enterprises.

Acceptable Transfer Pricing method

*Comparable Uncontrolled price method (CUP)

*Resale price method (RPM)

*Cost-plus method (CPM)

*Profit split method (PSM)

*Transactional net margin method (TNMM)

Due dates and respective threshold:

  Preparer Due Date Threshold
1. TP declaration forms
1.1 Statement of international transactions UPE and CE in Bangladesh. Submit together with corporate tax return on 15th of the 7th month within the end of the reporting entity’s tax year or 15th September. All taxpayer’s resident in Bangladesh that entered into an international transaction.
1.2 Report from a chartered or cost and management accountant UPE and CE in Bangladesh. Submit together with corporate tax return on 15th of the 7th month within the end of the reporting entity’s tax year or 15th September. Aggregate value of transactions exceeds 30 million takas in a financial year.
2. TP documentation
2.1 Local File N/A N/A Not required.
2.2 Master File N/A N/A Not required.
2.3 Country-by-Country (CbC) Report N/A N/A There are no CbC reporting obligations in Bangladesh.

Please be aware  below Warning:
The above contents are digested by Evershine R&D and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

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A-16, 1st Floor, Aruna Asaf Ali Marg, Qutub Institutional Area, Dhaka, 110067, Bangladesh
Manager Punit Singh Negi , speak in Bangladeshn and English.
Skype: cspunitnegi
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