Transfer pricing - Bangladesh

The National Board of Revenue (NBR) has adopted transfer pricing regulations/rules by incorporating a chapter on transfer pricing in its Income Tax Ordinance (Chapter XIA) through Finance Act 2012. Aim of the new rules is to ensure that profits taxable in Bangladesh are not transferred to foreign countries (especially in low –taxation countries) or understated (or losses overstated) by manipulating intra-company/related company transactions. Transfer pricing regulations in Bangladesh have been made effective from 1 July 2014 by SRO 161-Law/Income Tax/2014.

The NBR has established a Transfer Pricing Cell to audit transactions by firms. This cell has been working to educate tax officers and tax payers about the newly introduced transfer pricing regulations as well as to create awareness among the stakeholders.

The NBR has also adopted Customs Valuation (Determination of the Value of Imported Goods) Rules, 2000 in a bid to determine the arm’s length pricing of any transactions (i.e. price actually paid or payable -the transaction value) instead of using discretionary practices of determining prices. The Customs authorities also ask for supporting documentation to confirm the information contained in the value declaration.

Scope of Legislations

The compliance requirements under transfer pricing regulations in Bangladesh include submission of TP return in a prescribed form, maintenance of transfer pricing documentation, and obtaining certificate from an Accountant in certain circumstances. If a company fails to comply with the requirement and regulation of Transfer Pricing, a range of financial penalties will be applicable depending on the nature and extent of the non-compliance.

  • As per section 107EE of the Act, every person who has entered into an international transaction shall furnish, along with the return of income, a statement of international transactions in the form and manner as may be prescribed.

  • The Deputy Commissioner of Taxes may, by notice in writing, require that a person who has entered into international transaction or transactions the aggregate value of which, as recorded in the books of accounts, exceeds three crore taka during an income year shall furnish within the period as may be specified in the notice and in the form and manner as may be prescribed, a report from a Chartered Accountant or a Cost and Management Accountant regarding all or of a part of the information, documents and records furnished under section 107E.

  • As per rules, any international transaction above Taka 3 crore by a multinational or its associated entities from Bangladesh will come under scrutiny of the NBR. A report from a chartered accountant will have to be submitted to the NBR for transactions above Tk. 3 crore in a financial year.

  • Where any person fails to keep, maintain or furnish any information or documents or records as required by section 107D of this Ordinance, without prejudice to the provisions of Chapter XV of this Ordinance, the Deputy Commissioner of Taxes may impose upon such person a penalty not exceeding one per cent of the value of each international transaction entered into by such person.

    Where any person fails to furnish a report from a Chartered Accountant as required by section 107F of Income Tax Ordinance, the Deputy Commissioner of Taxes may impose upon such person a penalty of a sum not exceeding three lakh taka.

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Transfer Pricing compliance requirements by delivering meticulously prepared Documentation as per Local TP Regulations and global standards.

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We help design and implement Global TP Policy / review Agreements for Multinational Corporations. We also provide TP litigation support services.

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We have access to various public financial and company databases, industry and directories which assist us to render comprehensive TP analysis.

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Mosttafa Shazzad Hasan [FCA, CPA, MBA, LL.B., PhD]

Principal - Bangladesh Practice

Mosttafa Shazzad Hasan is a professional accountant, forensic accounting & investigation expert and corporate lawyer working as business advisor, auditor, taxation advisor, corporate legal expert and financial investigator. He has a long hands-on corporate experience in financial administration, project management and business modeling.

Mr. Shazzad has qualified as Chartered Accountant from The Institute of Chartered Accountants of Bangladesh (ICAB) and CPA from Certified Public Accountants Institute of Ireland.  He has studied BBA and MBA in Finance from University of Chittagong and has qualified Bachelor of Laws (LL.B.) from National University of Bangladesh. He has obtained his Diploma in Forensic Accounting from Bentwood College of UK and doing PhD research in Forensic Accounting.

Transfer pricing - Kenya

HexaTP was founded by a group of six enthusiastic, diligent professionals from varied domains i.e. finance, economics, legal, science and technology. Despite having varied domain expertise, all our professionals have individually spent a significant part of their career specifically in Transfer Pricing.

These professionals have either worked with Revenue Department or with BIG 4s or in industry and have earned valuable experiences over many years. They have a holistic view across all areas of transfer pricing such as Legislation, Implementation, Planning, Documentation, Negotiation, Litigation, among others.

Cumulatively having more than 100 years of experience in cross border taxation, we are capable in assisting and responding to all transfer pricing related queries and solutions.

Three Cs of Transfer Pricing, Comprehensiveness, Contemporaneous Data, Compliance can be best worked only with mix of efficient use of technology and domain expertise. These have led to the creation of HexaTP.

Transfer Pricing Regulations

Get authentic and reliable analysis curated by expert TP professionals having combined experience of 100+ years HexaTP provide bespoke and comprehensive benchmarking solutions. Team HexaTP having cumulative experience of 100 + years extensively in Transfer Pricing understands the relevance of comprehensive and in-depth benchmarking analysis for determination of arm’s length margin.
  • Section 18(3) of the Income Tax Act CAP 470 provides that, ‘Where a non-resident person carries on business with a related resident person or through its permanent establishment and the course of that business is so arranged such that it produces to the resident person or through its permanent establishment either no profits or less than the ordinary profits which might be expected to accrue from that business if there had been no such relationship, then the gains or profits of that resident person or through its permanent establishment from that business shall be deemed to be the amount that might have been expected to accrue if the course of that business had been conducted by independent persons dealing at arm’s length’.
  • In addition to the above, a multi-national enterprise (MNE) is required to comply with The Income Tax (Transfer Pricing) Rules, 2006 which offer guidelines on how to apply the arm’s
  • The rules prescribe a general overview on the application of transfer pricing rules and Kenya heavily relies on the OECD guidelines which offer a more formulaic expression on implementation.
  • The TP rules empower the Commissioner of Domestic Taxes (KRA) to request for TP documentation to any Multinational enterprise operating in Kenya on transactions where transfer pricing is applicable.
  • Section 18(3) of the Income Tax Act CAP 470 provides that, ‘Where a non-resident person carries on business with a related resident person or through its permanent establishment and the course of that business is so arranged such that it produces to the resident person or through its permanent establishment either no profits or less than the ordinary profits which might be expected to accrue from that business if there had been no such relationship, then the gains or profits of that resident person or through its permanent establishment from that business shall be deemed to be the amount that might have been expected to accrue if the course of that business had been conducted by independent persons dealing at arm’s length’.
  • In addition to the above, a multi-national enterprise (MNE) is required to comply with The Income Tax (Transfer Pricing) Rules, 2006 which offer guidelines on how to apply the arm’s
  • The rules prescribe a general overview on the application of transfer pricing rules and Kenya heavily relies on the OECD guidelines which offer a more formulaic expression on implementation.
  • The TP rules empower the Commissioner of Domestic Taxes (KRA) to request for TP documentation to any Multinational enterprise operating in Kenya on transactions where transfer pricing is applicable.

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    For further information on transfer pricing in Kenya please contact:

    Mohammad Taher Shaikh [FCA, LL.B.]

    Leader - Gulf Practice

    20+ years, experience in International Tax and Transfer Pricing space.
    Worked with A.F. Fergusson, KPMG, Ernst & Young and Deloitte wherein he served numerous Fortune 500 clients in different business space like consumer goods, automotive, IT and ITES. He did his masters in Law with Mumbai University and was part of the Tax Controversy Management Team at Deloitte.
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    Gyan Prakash Srivastava [MBA, LL.B.]

    Leader - South Asia Practice

    7+ years experience in Global Transfer Pricing Documentation, Litigation, BEPS compliance & advisory.
    During his tenure with PwC & Deloitte he has worked for marquee clients.
    Gyan specializes in assisting clients in developing cross border business models based on on-ground commercial facts and legal issues.
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