Bangladesh and the Netherlands have signed a new agreement to amend their existing pact in a bid to avoid double taxation and prevent revenue evasion, Daily Sun reported.
These revisions aim to expand the tax base and explore fresh avenues for revenue generation.
Finance Minister Abul Hassan Mahmood Ali and Netherlands’ Minister for Tax Affairs and Tax Administration, MLA van Rij, signed the agreement at the finance ministry on Tuesday.
National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem, Finance Division Secretary Dr Khairuzzaman Mozumder, and other officials were present at the signing ceremony.
The original agreement between Bangladesh and the Netherlands was signed almost 30 years ago, in July 1993. Since then, there have been significant changes in international norms related to double taxation avoidance and revenue evasion prevention, including the OECD and UN models.
Bangladesh’s transition from a least developed to a developing country has also prompted efforts to amend earlier tax avoidance agreements with various nations to address inconsistencies and safeguard Bangladesh's interests.
The process of amending the previous agreement and implementing a new one between Bangladesh and the
Netherlands has resulted in a 33-article agreement.
Important amendments have been made to broaden the scope of taxation, while new articles have been added to cover emerging areas.
Under the new agreement, tax-free benefits are exclusively granted to state-owned enterprises.
Additionally, a provision has been included to ensure the collection of taxes, up to a maximum rate of 10 per cent, for payments related to services.
Capital gains from share transfers are now taxable in Bangladesh, allowing for the collection of taxes on gains earned within Bangladesh.
In cases where income is not covered by existing treaty articles, taxation will be imposed in the country where such income arises, thus protecting Bangladesh's interests.
During the signing ceremony, the finance minister emphasised the advanced bilateral trade and investment partnership between Bangladesh and the Netherlands.
The Netherlands stands as one of Bangladesh's top trading partners, with significant exports and imports between the two countries.
The Netherlands also ranks fourth in terms of Foreign Direct Investment in Bangladesh, with investments spanning various sectors like energy, trade, leather, and cement.
However, in FY23, Bangladesh exported goods worth over $2,000 million to the Netherlands, including knitwear, woven garments, shrimp, footwear, textiles, leather products, and bicycles.
Meanwhile, imports from the Netherlands totalled $300 million, encompassing capital machinery, vegetables, food items, minerals, chemicals, pharmaceuticals, organic chemicals, plastic, and rubber.
The Netherlands ranks fourth in terms of Foreign Direct Investment (FDI) in Bangladesh, with investments exceeding $2,560 million in FY20.
The country is among Bangladesh’s top 15 bilateral development partners, and it stood as the ninth-largest exporting destination for Bangladeshi goods in FY23.
bd-pratidin/GR
