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Dhaka will be able to collect tax from the capital gains made by any entities of the Netherlands in Bangladesh as the two nations amended an existing double taxation avoidance and prevention of tax evasion agreement on Tuesday.
The amendment to the agreement, which was signed back on July 13, 1993, has been made as there are various changes in the international norms related to the avoidance of double taxation and the prevention of revenue evasion like the OECD model and the UN model.
Finance Minister Abul Hasan Mahmood Ali and Netherlands Minister of Tax Affairs and the Tax Administration M LA van Rij signed the agreement in Dhaka on behalf of their respective governments.
A press release from finance ministry said that the new deal has 33 articles of which some important articles have been amended to widen the scope of taxation, while some new articles have been added to collect tax from new areas.
By amending the existing provision, the new agreement provided for tax-free benefits only to state-owned enterprises. Also, a new article namely technical services fees has been incorporated to ensure collection of tax at the maximum rate of 10 per cent in case of payment of bills against services.
The new treaty has incorporated the provision that capital gains on transfer of shares are taxable in Bangladesh.