Double Taxation Dodged! New Netherlands Agreement!

Bangladesh Finance Minister Abul Hasan Mahmud Ali and Netherlands Revenue Minister MLA van Rijs signed an agreement at the Ministry of Finance in Dhaka on Tuesday.

The agreement between the Netherlands and Bangladesh 31 years ago did not contain any provision for taxation against technical services. Now a provision of 10 percent tax has been made against such services. Apart from this, in the previous agreement, the interest income of the state-owned enterprises of both countries was exempted from tax. Now only central bank income is kept tax-free. By adding 33 such articles, Bangladesh has signed a new agreement with the Netherlands on the avoidance of double taxation and prevention of revenue evasion.

The previous Article 31 agreement was signed on 13 July 1993. This information is known from the sources of the National Board of Revenue (NBR).

Bangladesh Finance Minister Abul Hasan Mahmud Ali and Netherlands Revenue Minister MLA van Rijs officially signed the agreement on behalf of their respective countries at the Ministry of Finance in Dhaka on Tuesday. At that time the Chairman of the National Board of Revenue (NBR) Abu Hena. Rahmatul Munim, Finance Secretary. Khairuzzaman Majumdar, Charge of the Affairs of the Netherlands posted in Dhaka Sanja Kuip and others were present.

In this regard, the Ministry of Finance said in a circular that Bangladesh is going to become a developing country from a least developed country (LDC). There are inconsistencies in the Double Taxation Avoidance Agreements signed with different countries. The agreements are being amended to eliminate them and to uphold the interests of Bangladesh. As part of that, a new agreement between Bangladesh and the Netherlands has been signed.

The notice also said that until now, Netherlands companies were not taxed if the company was sold or capital gains were realized as a result of the transfer of shares. New contracts are taxed. It has also been said that both countries will cooperate in collecting tax claims from defaulting companies.

According to the Ministry of Finance, the Netherlands ranks fourth in terms of Foreign Direct Investment (FDI) in Bangladesh. The country is Bangladesh’s ninth-largest trading partner. Bangladesh’s bilateral trade with the Netherlands is more than 2 billion dollars. In the fiscal year 2019-20, Bangladesh received more than USD 256 million in FDI. Of this, 15.6%, i.e. 400 million dollars, investment comes from the Netherlands. Some of their investment sectors are energy, leather, cement etc.

Exports from Bangladesh to the Netherlands include knitwear, ovens, garments, lobsters, shoes, textiles, leather goods, bicycles, etc. Capital machinery, vegetables, live animals (animals and birds), minerals, medicines, plastics, rubber etc. are imported from that country.