Penalty for Undisclosed Offshore Assets in the return -Section-21 Bangladesh Income Tax Act -2023

Penalty for Undisclosed Offshore Assets in the return -Section-21

 

Penalty for any offshore asset not disclosed in the return under Section 21 | Bangladesh Income Tax Act -2023:

   

       As per section-21(ITA-2023),

1. If a resident Bangladeshi is found to own any offshore asset that was not disclosed in the tax return, and the assessee:

·   Fails to provide a satisfactory explanation about its nature and source, or

·    provides an explanation that is not acceptable to the Deputy Commissioner of Taxes,

Then, the Deputy Commissioner of Taxes shall impose a penalty equal to the fair market value of that offshore asset and take steps to recover it.

2. This penalty is in addition to any other liability under this Act or any other applicable law in Bangladesh.

3. Before imposing the penalty, the assessee must be given a reasonable opportunity to be heard.

4. The Deputy Commissioner of Taxes may recover the penalty by confiscating or selling assets of the assessee or assets held on their behalf.

5. The Deputy Commissioner of Taxes has the authority to conduct both domestic and international investigations if there is reason to believe that the assessee holds undisclosed offshore assets.

6. To prevent and recover undisclosed offshore assets, the Board may:
(a) take any necessary action; or
(b) authorize or arrange an investigation by any income-tax authority not below the rank of Deputy Commissioner of Taxes.

Frequently Asked Questions(FAQs):

1. Who does this section apply to?
It applies to a resident of Bangladesh who owns offshore assets that are not disclosed in the tax return.

2. When is the penalty imposed?
When the assesse fails to explain the nature and source of the offshore asset satisfactorily, or the explanation is not accepted by the tax authority.

3. What is the amount of the penalty?
The penalty is equal to 100% of the fair market value of the undisclosed offshore asset.

4. Is the taxpayer given a chance to explain before penalty?
Yes, the assesse must be given a reasonable opportunity of being heard before the penalty is imposed.

5. How can the tax authority recover the penalty?
The Deputy Commissioner of Taxes may confiscate or sell assets of the assessee (or assets held on their behalf) and may also conduct local and foreign investigations.