Transfer pricing (‘TP’) is the determination of price for goods and services sold between entities within an enterprise/ group of companies. In order to avail tax advantages entities within a group may trade products to related entities/associated enterprises. This may result in tax avoidance by lowering profit in an entity subjected to high tax rate and raising profits to entities enjoying tax haven. Consequently, tax authorities may lose taxable revenues for transfer mispricing and due to which TP regulations came into force in Bangladesh from 1st July 2014.

It is expected that the Financial Reporting Bill is likely to come into force around mid-2015 and is currently waiting for Parliament’s approval. When enforced, the Act shall establish a new regulatory body, Financial Reporting Council (FRC) the majority of which shall be comprised..