104. Avoidance of tax through transactions with non-residents.-
Where any business is carried on between a resident and a non-resident and it appears to the Deputy Commissioner of Taxes that, owing to the close connection between them, the course of business is so arranged that the business transacted between them produces to the resident either no profits or profits less than the ordinary profits which might be expected to yield in that business, the Deputy Commissioner of Taxes shall determine the amount of income which may reasonably be considered to have accrued to the resident from such business and include such amount in the total income of the resident.
105. Avoidance of tax through transfer of assets.-
(1) Any income whichbecomes payable to a non-resident by virtue, or in consequence, of any transfer of assets, whether alone or in conjunction with associated operations, shall be deemed to be the income of the person who-
(a) has acquired, by means of such transfer or associated operations, any right by virtue, or in consequence, of which he has power to enjoy, whether forthwith or in future, the income which becomes so payable to the non-resident, or
(b) has received or is entitled to receive at any time, for reasons attributable to such transactions or associated operations, any sum paid or payable by way of loan or repayment of loan or any other sum, not being a sum paid or payable as income or for full consideration of money or money's worth.
(2) The income which becomes payable to a non-resident and is deemed under sub-section (1), to be the income of the person referred to therein shall be so deemed for all purposes of this Ordinance, whether such income would or would not have been chargeable to tax apart from the provisions of this section.
(3) The provisions of this section shall not operate if it is shown to the satisfaction of the Deputy Commissioner of Taxes-
(a) that neither the transfer nor any associated operation had for its purpose, or for one of its purposes, the avoidance of liability to taxation; or
(b) that the transfer and all associated operations were bona fide commercial transaction and were not designed for the purpose of avoiding liability to taxation.
(4) Where any person has been charged to tax on any income which is deemed under sub-section (1) to be his income, that income shall not again be deemed to form part of his income for the purpose of this Ordinance if it is subsequently received by him whether as income or in any other form.
(5) A person shall, for the purposes of this section, be deemed to have power to enjoy the income payable to a non-resident if-
(a) such income is in fact so dealt with as to be calculated to ensure at any time for the benefit of such person in any form; or
(b) the receipt or accrual of such income operates to increase the value of any assets held by such person or for his benefit; or
(c) such person receives or is entitled to receive at any time any benefit provided or to be provided-
(i) out of such income; or
(ii) out of money which is, or will be, available for the purpose by reason of the effect or successive effects of associated operations on such income and on any assets representing the income ; or
(d) such person has, by means of the exercise of any power of appointment, revocation or otherwise, power to obtain for himself, with or without the consent of any other person, the beneficial enjoyment of such income; or
(e) such person is able to control, directly or indirectly, the application of such income, in any manner whatsoever.
(6) In determining whether a person has power to enjoy income, regard shall be had to the substantial result and effect of the transfer and any associated operations, and to all benefits which may at any time accrue to such person as a result of the transfer and associated operations irrespective of the nature or form of the benefit.
Explanation.- For the purposes of this section-(a) "assets" includes property or rights of any kind and "transfer", in relation to assets being rights, includes creation of those rights;
(b) "associated operation", in relation to any transfer, means an operation of any kind effected by any person in relation to -
(i) any of the assets transferred; or
(ii) any income arising from such assets; or
(iii) any assets representing, directly or indirectly, any of the assets transferred, or the accumulation of the income arising from such assets;
(c) "benefit" includes a payment of any kind;
(d) references to assets representing any assets transferred, or any income or accumulation of income arising there from, includes references to shares in or obligation of any company to which, or the obligation of any other person to whom, any such assets or that income or accumulation of income is or has been transferred; and
(e) any body corporate incorporated outside Bangladesh shall be treated as if it were a non-resident.
I.T. Manual, Part-1 [Sec. 106
106. Avoidance of tax by transactions in securities.- (1) Where the owner of any securities sells or transfers those securities and buys them back or reacquires them, or buys or acquires similar securities, and the result of the transactions is that any interest becoming payable in respect of the original securities sold or transferred by the owner is not receivable by the owner, the interest payable as aforesaid shall be deemed, for all purposes of this Ordinance, to be the income of such owner and not of any other person, whether the interest payable as aforesaid would or would not have been chargeable to tax apart from the provisions of this sub-section.
(2) Where any person has had for any period during an income year any beneficial interest in any securities and the result of any transactions within that year relating to such securities or the income thereof is that no income is received by him, or that the income received by him is less than the sum which the income would have amounted to had the income from such securities accrued from day to day, and been apportioned to the said period, then the income from such securities for the said period shall be deemed to be the income of such person.
(3) Where, any person carrying on a business which consists wholly or partly in dealing in securities buys or acquires any securities from any other person and either sells back or re-transfers those securities, or sells or transfers similar securities, to such other person, and the result of the transactions is that the interest becoming payable in respect of the securities bought or acquired by him is receivable by him but is not deemed to be his income by reason of the provisions of sub-section (1), no account shall be taken of the transactions in computing for any of the purposes of this Ordinance any income arising from, or loss sustained, in the business.
(4) The Deputy Commissioner of Taxes may, by notice in writing, require any person to furnish him, within such time, not being less than twenty-eight days, as may be specified in the notice, such particulars in respect of all securities of which such person was the owner, or in which he had beneficial interest at any time during the period specified in the notice, as the Deputy Commissioner of Taxes may consider necessary for the purpose of ascertaining whether tax has been borne in respect of the interest on all those securities and also for other purposes of this section.
Explanation.- For the purposes of this section,-
(a) "interest" includes dividend;
(b) "securities" includes stocks and shares; and
(c) securities shall be deemed to be similar if they entitle their holders to the same right against the same persons as to capital and interest and the same remedies for the enforcement of these rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or in the manner in which they can be transferred
107. Tax clearance certificate required for persons leaving Bangladesh.-
(1) Subject to such exceptions as the Board may make in this behalf, a person who is not domiciled in Bangladesh, or a person who being domiciled in Bangladesh at the time of his departure is not, in the opinion of an income tax authority likely to return to Bangladesh, shall not leave Bangladesh without obtaining from the Deputy Commissioner of Taxes authorised in this behalf by the Board.-
(a) a tax clearance certificate, or
(b) if he has the intention of returning to Bangladesh, an exemption certificate which shall be issued only if the Deputy Commissioner of Taxes is satisfied that such person has such intention; and such exemption certificate may be either for a single journey or for all journeys within the period specified in the certificate.
(2) The owner or charterer of any ship or aircraft, who issues any authority to any person referred to in sub-section (1) for travel by such ship or aircraft from any place in Bangladesh to any place outside Bangladesh unless such person has a certificate required by that sub-section, shall-
(a) be liable to pay the amount of tax, if any, which has or may become due and payable by such person and also to a penalty which may extend to two thousand taka; and
(b) be deemed, for the purposes of recovery of such tax and penalty, to be an assessee in default, and all the provisions of this Ordinance shall apply accordingly.
Explanation.- For the purposes of this section-
(a) "exemption certificate", in relation to any person, means a certificate to the effect that such person is exempt from the requirement of having a tax clearance certificate for the purpose of the journey or journeys specified therein;
(b) "owner" or "charterer" includes any representative, agent or employee, who may be empowered by the owner or charterer of a ship or aircraft to issue an authority to travel by the ship or aircraft; and
(c) "tax clearance certificate", in relation to a person, means a certificate to the effect that such person has no liability under this Ordinance, the Income-tax Act, 1922 (XI of 1922), the 1[Gift-tax Act, 1963 (XIV of 1963) or দানকর আইন, ১৯৯০ (১৯৯০ সনের ৪৪ নং আইন) or the Wealth-tax Act, 1963 (XV of 1963)], or that satisfactory arrangements have been made for the payment of all or any of such taxes which are or may become payable by such person.
1 Subs. for "the Gift-tax Act. 1963 (XIV of 1963)" F. A. 1999