NBR forms cell to enforce TP law
The National Board of Revenue (NBR) has formed the much-awaited cell recently in a bid to conduct preparatory work for enforcing the transfer pricing (TP) law.
The board has issued an order, ‘Transfer Pricing Cell Order-2014’ by defining nine-point work-plan for the cell.
The cell will work under the supervision of international desk of the NBR. Income tax administration wing will appoint required officials under income tax ordinance of 1984.
It will recommend to the NBR about imparting required capacity building training on transfer pricing issue. The cell will also work as coordinator of training and awareness building programme for taxpayers and other stakeholders.
The cell will assist the tax policy wing on amendment to the TP and issuance of orders, circulars or guidelines.
Officials of the TP cell will communicate with the tax agencies, organizations, departments or other relevant authorities.
The wing will collect and maintain data-base on TP. To check capital flight through abuse of the TP facility, the cell will conduct investigations.
The order, signed by second secretary of income tax, Md Ashraful Islam, was issued after more than one year of its approval by NBR.
Parliament approved the TP law in the budget for fiscal year 2012-13.
The proposal on formation of a cell for TP law got approval in a board meeting of the NBR in October, 2012. Finance Minister AMA Muhith gave his consent for the cell in December, 2012.
On delay in formation of the TP cell, a senior NBR official blamed internal chaos in the board responsible for it.
According to the implementation plan, the NBR is set to enforce the law on pilot basis from upcoming FY.
After enforcing the TP law, multinational companies will have to follow certain rules to send locally earned profit to their home country.
Tax evasion by transfer ‘mispricing’ was a major concern of the taxmen over the last two decades.
According to the TP Law, Multi-national Companies (MNCs’) international transactions will be monitored and assessed carefully by an expert group of taxmen. Their accounts and records will be maintained separately as per the prescribed forms of taxmen.
Credit: The Financial Express