On 23 December 2021, the Maldives and Bangladesh signed a Double Tax Avoidance Agreement (DTAA).
The signing took place during a ceremony held in the President’s Office. The DTAA was signed by Commissioner General of Taxation Fathuhulla Jameel and the Chairman of the National Board of Revenue of Bangladesh and Senior Secretary of the Internal Resources Division Mr. Abu Hena MD Rahmatul Muneem.
Taxation in cross-border situations are influenced by numerous interrelated factors – issues often arise for individuals and corporations doing business in a state different from its resident state, due to the scope of their respective domestic laws creating overlaps or gaps in cross-border situations.
The main objective of entering into a DTAA is to circumvent such gaps or overlaps and help the states to eliminate double taxation. DTAAs also often attract foreign investments as it is not only limited to providing relief from double taxation, but also offers reduction in tax rates on certain types of income.
From a tax administration’s perspective, some important aspects covered under DTAAs include procedural articles that allow cooperation between tax administrations with the purpose of combating tax evasion and avoidance; exchange of information; and assistance in collection of taxes.
As of now, the effective date of the DTAA has not been revealed and the specific details of the Maldives-Bangladesh DTAA are yet to be published.
Photo Credit: President’s Office