Foreign bank branches can remit head office expenses overseas: BB - Share market analysis of dhaka stock exchange, Bangladesh

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11 June, 2018 09:27 AM Source: New Age

Branches of foreign banks operating in the country can now remit abroad the portion they need to share as head office expenses without prior approval of the Bangladesh Bank.
The Foreign Exchange Policy Department of the central bank on Sunday shared the decision issuing a circular. It said that authorised dealers in foreign exchange might remit such expenses without prior approval of the central bank under certain conditions.
The circular said that two previous circulars of the FEPD restricted branch offices of foreign companies, including banks, to remit head office expense abroad.
But it is observed that branch operations of foreign banking companies need to share expenses of their head offices against benefits accrued to operations in Bangladesh, it said.
Head offices allocate the expenses, on account of general management, administration and strategy of the whole company, to their branches in accordance with standard practices, the circular said.
The central bank decided to allow foreign bank branches to remit to their head offices the expenses to facilitate smooth operations of branches in the country, it said.
But authorised dealers will have to follow some instructions before remitting.
It said that the gross remittable amount, before deduction of source tax, should not exceed the limit as allowed in income tax regulations of the country.
The remittance is also subject to compliance of taxes regulations like deduction and payment of applicable
source tax and value-added tax, it said.
According to the circular, head office expenses need to be supported by certificate issued by the head office auditors in line with global standards and the expenses will not be remittable before the close of financial statements.
There should be separate disclosure in the audited financial statement for such expenses, it said.
A set of documents related to the remittances is to be forwarded to the FEID of the central bank within 15 days of remittance with an undertaking to the effect that any amount detected by the BB as excess remittance while post facto checking will be repatriated immediately.  

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