105. Avoidance of tax through transfer of assets.-

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.

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