Transfer pricing, by definition is the setting of the price for goods and services sold between controlled legal entities within an enterprise. This system is accepted globally. Merely this process isn’t about discouraging intercompany/ related party transactions, rather to ensure that all the transactions are occurring at a fair price. Over 70 countries have adopted TP rules recently. In Bangladesh, this phenomenon is been adopted very recently and is an increasing concern for MNC’s in this country.
An entity has to keep records of following documents to face any kind of situation –
i. Ownership Profile
ii. Business Profile
iii. Brief business profiles of each of the member of the group
iv. Information on the business relationship
v. Consolidated financial statement of the group
vi. Financial Statements of the assesse enterprise
vii. Information on economic and market analysis, forecast and Budgets
viii. Detail on all transactions with associated enterprises
ix. Contract copies, and other relevant documents

According to current laws of Bangladesh, Return from an accountant is to be furnished before Income tax authority which includes examination of related papers and activities, papers and documentation procedures are compatible with Income Tax Ordinance 1984. Condition for furnishing obligatory Transfer Pricing return is applicable for anyone who engages into an international transaction of any kind. In addition to this, two different reports including “Statement of international transaction which includes expense and revenue details of an assesse and another report namely “Statement of Interest bearing loans, advances and investments” including balance figures of local loans and advances at year end.

There are provisions for penalty in case of not maintaining records or not submitting Transfer Pricing Return. Penalties are such as:
- Maximum 1% of the value of each international transaction for not maintaining accounting records
- DCT may impose a penalty of sum not exceeding to 3 lac when an assesse or person for failure to furnish Transfer Pricing return mentioned earlier.