Bangladesh and the Netherlands renewed their agreement to prevent revenue evasion and avoid double taxes by removing anomalies and implementing required modifications.
At the Finance Ministry in Dhaka on Tuesday, Minister for Tax Affairs and Tax Administration MLA van Rij, representing the Netherlands, and Finance Minister Abul Hassan Mahmood Ali, representing Bangladesh, signed the agreement.
The agreement was first signed in 1993, according to representatives of the Finance Ministry. International standards about avoiding double taxation and preventing revenue evasion have undergone several modifications since that time. Furthermore, Bangladesh is currently going through a phase of change from being a least developed to a developing country.
Inconsistencies in the double tax avoidance agreements negotiated with various countries in the past have been attempted to be removed. A new agreement was signed in that regard, amending the previous one between Bangladesh and the Netherlands.
The new treaty has 33 articles total, with a few more added to increase the reach of taxation and enable the collection of taxes from previously untapped sources.
Only state-owned institutions are eligible for tax-free advantages under the new deal, according to a news release from the Finance Ministry. If bills are paid for services rendered, it will be feasible to guarantee tax collection at a maximum rate of 10 per cent.
A clause in the new agreement states that capital gains on share transfers are subject to Bangladeshi taxation. Tax collection on capital gains made in Bangladesh, the nation of origin, will be feasible.
It further stated that both contracting states will support one another in the recovery of tax claims.
National Board of Revenue Chairman Abu Hena Md Rahmatul Muneem and Finance Secretary Md Khairuzzaman Mazumdar were present at the signing ceremony.
According to the Finance Ministry, Bangladesh is one of the 15 major partner countries of the Also, Bangladesh is among the Netherlands’ top 15 key partner countries. Bangladesh exported US $ 2 billion worth of goods to the Netherlands in the 2022–2023 fiscal year.
When it comes to foreign direct investment (FDI) in Bangladesh, the Netherlands comes in fourth. Up until the 2019–2020 fiscal year, the Netherlands had made around US $ 2.56 billion in investments in Bangladesh. The energy, trade, leather products, cement, and leather sector are among the industries in which the Netherlands is investing more.
