Regulatory Alerts2013-12-19
Added · Updated
BRPD Circular Letter No. 22: Clarification about Local L/C under Section 52 of Income Tax Ordinance, 1984
All scheduled banks operating in Bangladesh are required to deduct tax at source as advance income tax from amounts payable through Local L/Cs, as mandated by Section 52 of the Income Tax Ordinance, 1984, and Rule 16 of the Income Tax Rules, 1984. This obligation applies even if banks rename such transactions, for example, as Invoice Financing or Supplier Financing. The National Board of Revenue emphasizes that if a transaction is inherently similar to a Local L/C, tax deduction at source is mandatory. Banks are instructed to ensure that all their branches immediately follow these guidelines and ensure compliance.
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