Bangladesh Bank on Monday asked all banks to ensure that foreigners have clearance certificates from the National Board of Revenue before allowing them tax benefits under double taxation avoidance agreement.
Foreign Currency Policy Department of the central bank in a letter to the head offices of approved dealer banks suggested that the banks make sure that the taxpayers had NBR certificates before allowing them to send money back to their home countries under the agreement.
Earlier, on July 5, international tax wing of the NBR requested the BB to take necessary measures in this regard.
NBR member Kalipada Halder in the letter to the BB governor said Bangladesh have DTA agreements with 33 countries and taxpayers, organisations and companies of the countries get some reciprocal benefits in income tax including waiver and reduced rate tax under the agreements.
The government through the Finance Act-2018 made the NBR certificate mandatory for taxpayers for getting any tax benefit under the agreements, suspecting that many of them misuse the benefit.
In many cases, banks allow non-resident taxpayers to remit money with tax benefit depending on documents, mainly photocopy of the agreement, provided by the taxpayers without crosschecking with the NBR whether the benefit will be applicable for the taxpayers or not.
Many non-resident taxpayers receive tax benefits though they are not eligible for the benefit taking the advantage of loose mechanism at the banks.
In this context, the NBR took the initiative to tighten monitoring of the process.
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