Bangladesh has introduced new transfer pricing (TP) regulations, effective from July 2014.
- Definition of: associated enterprise, international transaction and arm’s length methodologies
- No APAs or safer harbor rules
- Key documentation requirements include:
- Business relationships between each member of the MNE group
- Consolidated financial statements of the MNE group
- Record of any financial estimates
- De minims requirements for international transactions less than approx. USD 390,000
- New statement of international transactions required in addition to the income statement
- Chartered Accountant’s report
- 1% of value TP penalties
These rules, similar to Singapore’s recent comments for its proposed update for TP legislation, request broad and complex documentation requirements for the MNE group. Accordingly, all MNE’s need to modify global transfer pricing documentation methodologies in response to unilateral legislation of various countries.
Most importantly, the global TP requirements will require attendees in all future audits to be familiar with these global methodologies and information that the tax authorities will have had the chance to review.
A Financial Express summary is included for reference: