VAT, Tax and Customs Transactions
Rahman’s Chambers has a long-standing practice of more than a decade of assisting clients on taxation matters. The Chambers Taxes and Financial Department is mostly composed of lawyers who are experienced in dealing with all types of taxation matters. We advise on full range of issues involving VAT, income tax and Customs. Chambers and Partners 2023 Asia Pacific Guide for five consecutive years ranked us for Corporate and Finance. Its 2023 Dispute resolution editorial added: “Rahman’s Chambers defended Larsen & Toubro against a tax penalty amounting approximately to USD1 million, imposed due to Larsen’s delay in filing its tax returns.”
Rahman’s Chambers has been consecutively ranked for Corporate & Finance.
-Chambers & Partners, 2022
“…they are very quick to come back to us with solutions and have been very helpful in giving advice on local laws, regulations and requirements.”
– Chambers & Partners, 2021
“Additionally has a recognized practice in such areas as business formation, projects and energy, real estate and employment matters.”
– Chambers & Partners, 2020
“Offers further capabilities in international trade, commercial litigation and project finance”
– Chambers & Partners, 2019
“Their response times are excellent and they make you feel generally very well informed…”
– Chambers & Partners, 2018
Interview of Mr. Mohammed Forrukh Rahman on matters pertaining to Corporate Taxation and Filing Annual Tax Returns Online in Bangladesh
Rahman’s Chambers whom we have contacted in 2007 seeking assistance for disputes arising with the National Board of Revenue (NBR) Income Tax office, involving rejection of trading account and imposition of estimated profit based on assumption… successfully handled the income tax reference case pending in the High Court and also successfully argued before the Court the legality of such assumptions and rejection of the trading account and its expenditures upon remand. Finally the tribunal, once recommended from the High Court upon perusal of relevant receipts, vouchers, verifiable transactions, passed favorable judgment in our favor…
For full recommendation click here.
Our Completed Experiences are:
DUE DILIGENCE ( TAXATION)
- In 2018 we have successfully advised a major South Korean Construction company and provided due diligence report on applicable customs duty, supplementary duty, advance trade VAT, advance income tax on several types of equipment’s, i.e. bulldozers, generators, pile drivers and extractors etc.
- We have conducted due diligence over VAT, Tax, Customs duties for Sojitz Machinery Corporation, a sogo shosha (General Trading Companies) based in Tokyo, Japan regarding the import of Gantry Crane for Chittagong Port authority.
- We have conducted due diligence over VAT, Tax, Customs duties for Sojitz Machinery Corporation, a sogo shosha (General Trading Companies)based in Tokyo, Japan regarding the import of Gantry Crane for Chittagong Port authority
- Advising Larsen and Toubro Ltd (L&T) a major MNC involving double taxation treaty benefits with its operation of branch office and several projects.
- We have advised Itochu Corporation in the formation of a gratuity deposit fund trust and also assisted in the process of registering the trust with the National Board of Revenue to facilitate the process of claiming tax exemptions applicable for gratuity payment.
Duty and exemptions
- We have conducted due diligence on several spices, sauce preparation, seasonings, etc. for Gourmet Foods FZC, a concern of Shan Foods Private Limited, and advised on the possible classification (HS Code) under Bangladesh laws, after taking into account WCO Conventions and several other multilateral treaties, both international and national
- Advised and conducted due diligence for Trouw Nutrition on several customs duties and exemptions.
- We have conducted due diligence over customs duties etc. on specific products for VVD, India and Godrej,
HS codes and Valuation
- We have advised Phillips Lighting Bangladesh Ltd. on advanced ruling on HS Codes in Bangladesh.
- We have advised G.A.B Limited, a concern of Gildan Active-wear Bangladesh and a Multi-National Company on different custom formalities involving bonded warehouse matters allowing exemption from import duty for 100% export oriented import and extension of a bonded area in different locations.
- We have advised a major South Korean construction company and provided due diligence report on applicable customs duty, supplementary duty, advance trade VAT, advance income tax on several types of equipment, i.e. cranes, bulldozers, generators, pile drivers and extractors etc.
- In 2018 we have advised and provided Legal Opinion to a multinational company regarding the applicability of Bangladeshi laws involving Customs and VAT, Tax on the donation of bi-products.
- We have also successfully assisted several corporate and individual clients in Tax & VAT Assessment and Filling of return.
IMPORTATION/EXPORT POLICY & REGULATION
- We have assisted First Northeast Electric Power Engineering Co. (NEPC) in the conversion of temporarily imported equipment into permanent importation from a project to a subsidiary company as capital machinery subject to availing significant exemption on applicable duty and tax.
- We have successfully advised CCCC on customs matter involving conversation of temporary import into permanent imports.
- In 2018 we have successfully advised OOCL Bangladesh on customs regulation and power of Bangladesh Customs Authority.
Practice Guide – Taxes & Finance
VAT, Tax and Customs related legal support is high in demand in Bangladesh. Particularly for companies, new investors & entrepreneurs knowing the different formalities involving taxation is a big challenge because of its complexity. In particular with income tax, different statutory requirements for e.g. advance tax on income, deduction of tax at source, tax exemptions, tax rebate, procedures for filing annual tax returns along with its assessments, etc and their correlation which may be found difficult without proper knowledge. On the other hand, entirely new regulations are applicable to VAT. Understanding ATV (advance trade VAT), VAT rebate/input at different stages of trade, obligations of consumers, supplier, service provider and different MUSAK filing along with the filing of monthly returns is equally complex. Finally, rules and regulations applicable for various Custom duties, supplementary duties, regulatory duties and its relations with HS code and product valuation is a complex area of law that requires sound knowledge to deal with the issue efficiently. In case of any disputes, legal support is often required for challenging any claim, issues, Order before the Higher Authority or Tribunal which may even go up to the High Court & Appellate Division.
Tax at higher rate is deductible at source at the time of making payment to a non-resident for any income generated in Bangladesh. This raises the question for non-residents whether they need to apply for a certificate of exemption under double taxation treaty if any signed with their country of residence. On the other hand, due to the changes made in the section 75 and section 184A by the Finance Act 2022, a non-resident companies working in a project with no permanent establishment in Bangladesh may still require filing tax returns as it may require a proof of submission of tax return for receiving payments etc. It is also required to review from legal perspective whether a separate TIN is needed/beneficial under double taxation treaty for the projects companies which are already filing tax returns through their branch/liaison office.
Allowability of ‘Research and Development’ expenses clarified to include expenses on systematic, investigative, and experimental study that involves novelty or technical risk carried out in the field of science or technology for acquiring new knowledge and clearly excluded other forms of expenses which could have been interpreted as expenses under this heading. The definition leave limited scope for interpretation hence there should be less disputes involving determining allowable expenses.
in 2022, Penalty for contravention of various provisions of the Customs Act increased. Hopefully, this will reduce the number of disputes increased after pandemic involving fraudulent documentation and mis-declaration etc.
Related Resources - Library
We have a rich library with a mixture of printed and online legal databases. We have printed version of All England Commercial Cases, Indian Digest of Supreme Court cases, Yearbook Commercial Arbitration of Wolter Kluwer and most law reports of Bangladesh. We subscribe to the online legal database Manuputra providing access to most reputed law reports. Read more
Our Reported Cases
- Grameen Danone Foods Ltd Vs. Commissioner of Taxes 6 CLR (HCD) (2018) 25.