2024-03-13 14:07:03
A new agreement has been signed between Bangladesh and the Netherlands to prevent double taxation and revenue evasion. Finance Minister Abul Hasan Mahmud Ali expressed hope that both countries will benefit from this.
The agreement was signed on Tuesday (March 12) in the conference room of the Ministry of Finance. Bangladesh Finance Minister Abul Hasan Mahmud Ali and Netherlands Minister of Tax Affairs and Tax Administration MLA van Rijs signed the agreement on behalf of their respective countries.
At this time, State Minister of Finance Wasika Ayesha Khan, Senior Secretary of Internal Resources Department and Chairman of NBR Abu Hena Md. Rahmatul Munim, Finance Secretary Dr. Md. Khayeruzzaman Majumder, Dutch Charge d’Affaires Sonja Kuip, along with senior officials from both countries were present.
In the event, it was informed that the agreement between Bangladesh and the Netherlands regarding the avoidance of double taxation and prevention of revenue evasion was signed on July 13, 1993, almost 30 years ago. Meanwhile, there have been many changes in the international norms related to the avoidance of double taxation and the prevention of revenue evasion, such as the OECD model or the UN model. Bangladesh is also passing through the graduation period from least developed to developing country. Efforts have been made to amend the double tax avoidance agreements signed with various countries in the past to remove the inconsistencies and to uphold the interests of Bangladesh. In view of that, the process of amending the previously signed agreement between Bangladesh and the Netherlands and executing a new agreement was undertaken.
The new agreement signed between Bangladesh and the Netherlands has 33 articles. In this, some important articles have been changed to expand the scope of taxation, while some new articles have been added to collect tax from new areas.
The new agreement only provides tax-free benefits to state-owned enterprises. Due to inclusion of new article, it will be possible to ensure collection of tax at the maximum rate of 10 percent in case of payment of bill against services.
The new agreement has included a provision that capital gains on transfer of shares are taxable in Bangladesh. As a result, it will be possible to collect tax from the capital gains earned in the source country i.e. Bangladesh.
No article of an existing treaty provides for the taxation of income in the country of which the taxpayer is a resident. It has been amended in the new agreement to protect the interests of Bangladesh. Now provision is made for taxation in the country where such income arises.
Besides, this article has been newly added for cooperation in collection of tax claims. In this case, both the Contracting States shall assist each other in collecting the revenue.
On the occasion, the Finance Minister said that trade and investment partnership relations between Bangladesh and the Netherlands are very advanced. Bangladesh is one of the 15 partner countries of the Netherlands. The Netherlands is Bangladesh’s ninth largest exporting partner country in the fiscal year 2022-2023, with an export value of over 2,000 million US dollars.
He said, among the products exported from Bangladesh to the Netherlands are knitwear, ovens, garments, lobsters, shoes, textiles, leather products, bicycles etc. On the other hand, Bangladesh imported goods worth more than 300 million dollars from the Netherlands in the fiscal year 2022-2023. These include – capital machinery, vegetables, prepared food ingredients, live animals (animals and birds), minerals, chemicals, drugs, organic chemicals, plastics, rubber etc.
The Finance Minister said that the Netherlands ranks fourth in terms of Foreign Direct Investment (FDI) in Bangladesh. The Netherlands has invested more than 2,560 million US dollars in Bangladesh in the fiscal year 2019-2020. Investments in the Netherlands are increasing in energy, trade, leather sector, leather goods, cement etc.