The tax administration has made it mandatory for both local and foreign firms to use a new form from the current fiscal year while filing returns, which will require companies to disclose more information in detail.
“There will be no usefulness of any other forms,” the National Board of Revenue (NBR) said in a notice yesterday.
The tax administration amended the income tax rules three years ago to introduce the new return form, IT-11GHA 2016. It, however, did not make its use compulsory.
In the new form, companies will have to state the areas of tax exempted incomes and the incomes that were granted reduced tax benefits. Exporters will have to highlight the main items they sell abroad.
The NBR has added provisions for multinationals and foreign companies to cite in the return form if they perform any international transactions with their associated or related enterprises abroad.
Multinationals and foreign companies will have to give statements about their international transactions with related entities abroad under the Transfer Pricing (TP) rules, which were framed in 2012 to check illicit profit shifting abroad by foreign companies.
TP is the price at which divisions of a company transact with each other for goods or services. It takes place when two related companies -- such as a parent company and a subsidiary, or two subsidiaries controlled by a common parent -- engage in international trade with each other for goods and services.
An NBR official said companies that carry out international transactions already have to furnish a statement of such transactions separately with tax offices.
“However, they did not have to mention such transactions in the returns. Now companies will declare it in the returns. It will allow taxmen to identify companies with international transactions easily,” he said.
Md Humayun Kabir, a former president of the Institute of Chartered Accountants of Bangladesh, expects that mentioning of international transactions in the returns would yield good result.
The latest data on the returns filed by companies are yet to be published by the NBR. Its annual report 2016-17 published earlier this year showed that 29,215 companies filed returns in 2016-17, up 34 percent year-on-year.