FEPD Circular Letter No. 11: Tax Deduction from Resident Tax Paying Shipping Business

Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka. www.bb.org.bd

FEP Circular Letter No. 11 Date: Magh 30, 1431 February 13, 2025

To: All Approved Dealer Banks Engaged in Foreign Exchange Transactions Head Office / Principal Office.

Dear Sir,

Subject: Deduction of tax from resident taxpayers' shipping business and deposit into the government treasury.

With reference to the subject cited above, it is brought to the notice of all concerned that a new order has been issued by the National Board of Revenue (NBR), revoking all previous orders issued in the field of tax deduction/collection at source. The issued new order directs that a tax of 5% be deducted and deposited into the government treasury on the total cargo of any passenger, livestock, mail, or goods transport ship owned or leased by a resident taxpayer, as described in Section 102 of the Income Tax Act-2023 (Section 53AA of the erstwhile Income Tax Ordinance, 1984), when entering Bangladesh or destined for foreign countries. In the case of transport by two or more countries, a 3% rate is applied.

2. In this regard, it is advised that the tax deducted from ships owned or leased by resident taxpayers of all districts of the country, except Chittagong district, for passenger, livestock, mail, or goods transport entering Bangladesh or destined for foreign countries, at a rate of 5% and 3% respectively for transport by two or more countries, should be deposited into the government revenue deposit code under the jurisdiction of Tax Circle-19, Dhaka, according to the NBR's jurisdictional order. The codes are: (for individuals - 1110215142633-1111101 and for companies - 1110215142633-1112201).

Please inform all concerned parties about this matter.

Yours faithfully,

(Signature) (Md. Harun-Or-Rashid) Director (FEPD) Phone: 9530123

Enclosure: As described.

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(Replaced by the same memo and date) Government of the People's Republic of Bangladesh Office of the Additional Commissioner of Tax Tax Circle-19, Tax Bhavan-13, Dhaka. E.A. Tower (3rd Floor), 01, Purana Paltan, Dhaka.

File No.: Tax Deduction/Jurisdiction-1/Tax-19/2024-2025/ Date: 13 Magh, 1431 Bangabda 27 January, 2025 AD

Sender: Additional Commissioner of Tax (Inspector) Inspector Range-1 Tax Circle-19, Dhaka.

Recipient: Director Foreign Exchange Operations Department Bangladesh Bank Motijheel, Dhaka.

Subject: Directions to scheduled banks regarding deduction of tax from resident taxpayers' shipping business and deposit into the government treasury.

Reference: National Board of Revenue File No. 08.01.0000.027.09.011.23.740, Date: 18 December, 2023 AD

I draw your kind attention to the subject and reference cited above.

1. Through the referenced letter, the National Board of Revenue (NBR) has issued a new order revoking all previous orders issued in the field of tax deduction/collection at source (copy of the order is attached). The issued new order directs that a tax of 5% (five percent) be deducted and deposited into the government treasury on the total cargo of any passenger, livestock, mail, or goods transport ship owned or leased by a resident taxpayer, as described in Section 102 of the Income Tax Act, 2023 (Section 53AA of the erstwhile Income Tax Ordinance, 1984), when entering Bangladesh or destined for foreign countries. In the case of transport provided by two or more countries, a 3% (three percent) rate is applied.

2. Except for resident taxpayers of Chittagong district, the tax deducted at source from the shipping business of resident taxpayers of all other districts of the country falls under the jurisdiction of Tax Circle-19, Dhaka.

3. In this regard, it is requested that all scheduled banks be directed to deposit the tax deducted at a rate of 5% (five percent) and 3% (three percent) on the total cargo of ships owned or leased by resident taxpayers of all districts of the country, except Chittagong district, for passenger, livestock, mail, or goods transport entering Bangladesh or destined for foreign countries, into the specified codes under the jurisdiction of Tax Circle-19, Dhaka, in accordance with the NBR's jurisdictional order.

Government Revenue Deposit Codes under Tax Circle 19, Dhaka - (for individuals - 1110215142633-1111101 and for companies - 1110215142633-1112201)

Thank you for your overall cooperation in national revenue collection.

Attached:

1. Copy of the NBR's jurisdictional order.
2. Copy of Section 102 of the Income Tax Act, 2023.
3. Copy of S.R.O. No. 417-Law/Income-Tax-2024, Date: 17 December, 2024 AD.
4. Copy of the NBR's order dated 18 December, 2024.

(Signature) 27.01.25 Dr. Haripada Sarkar Additional Commissioner of Tax

File No.- Tax Deduction/Jurisdiction-1/Tax-19/2024-2025/ Date: 13 Magh, 1431 Bangabda 27 January, 2025 AD

Copy for information sent to:

1. Member (Tax Policy), National Board of Revenue, Dhaka.
2. Commissioner of Tax, Tax Circle-19, Dhaka.
3. Director, Foreign Exchange Investment Department (FEID), Bangladesh Bank.
4. Office Copy.

(Signature) Dr. Haripada Sarkar Additional Commissioner of Tax