BANGLADESH LAW AND PRACTICE Contributed by: Shahwar Nizam, Tarannum Tasnim, Mahboob Aziz, Saif Bhuiyan, Farhan Kabir, Tanzim Ahmed and Rizvi Khan, DFDL Bangladesh
Bangladesh’s transfer pricing rules align closely with the OECD Transfer Pricing Guidelines, aiming to guar - antee that transactions between associated enterpris - es or related parties adhere to arm’s length prices. These regulations encompass transactions involving services, intangible property and intercompany loans, applying to both subsidiaries and branches. The iden - tification of associated enterprises or related parties is based on parent/subsidiary relationships, common ownership or control, and certain relationships where one company holds decision-making control. Taxpayers engaged in international-related party transactions exceeding approximately USD245,000 within a financial year must maintain transfer pricing documentation. This documentation is subject to sub - mission upon the NBR’s request, facilitated through a report prepared by a chartered/cost and management accountant. Non-compliance, or failure to furnish the required report, may lead to penalties of up to approxi - mately USD2,450. 10. Employment and Labour 10.1 Employment and Labour Framework The main pieces of legislation that are relevant to the regulation of employment in Bangladesh are the Bang - ladesh Labour Act 2006 and the Bangladesh Labour Rules 2015 (collectively the “Labour Laws”), the Work - ers Welfare Foundation Act 2006 and the Workers Welfare Foundation Rules 2010. Further, from time to time the Ministry of Labour and Employment pub - lishes policies and guidelines relating to employment by way of notification in the Gazette of the Department of Inspection for Factories and Establishments of the Ministry of Labour and Employment. The Labour Laws do not apply with respect to indus - trial undertakings located in export processing zones and economic zones. Employment matters in these areas are governed by the EPZ Labour Act 2019. Trade unions are common in the industrial sector. Under the Labour Laws, either employees or employ - ers have the right to form a trade union for the pur - pose of regulating the relations between workers and employers, or amongst the workers themselves.
The trade union, through its leaders, negotiates with the employer on behalf of its members on matters such as wages, work rules, complaint procedures, the rules governing hiring, firing and promotion of workers, benefits, workplace safety and policies. If an establishment has only one trade union, then that trade union will be considered as the collective bar - gaining agent of the establishment. However, if the establishment has more than one trade union, then the trade unions may conduct an election to elect the collective bargaining agent. Details of the election pro - Employees are entitled to receive a gratuity payment during the termination of their employment service (ie, termination on notice without any reason, or for discharge from employment due to a mental or physi - cal incapability or for redundancy or retrenchment). The amount of gratuity to be paid is 30 days’ sal - ary for every completed year of service, or for any part thereof in excess of six months. Employees with more than ten years’ service will be entitled to gratu - ity pay calculated at the rate of 45 days’ salary for every completed year of service, or any part thereof in excess of six months. In addition to this gratuity payment, employees are also entitled to receive notice pay, annual leave, bonus, provident funds and any other due. 10.3 Employment Protection In the event of an acquisition, change of control or other investment transaction, the employer is required to notify its employees and is also required to provide two options from which the employees can choose, namely either to (i) continue their service upon express written consent or (ii) resign from their service upon express written consent. The employer also has the option either to retain the employees or terminate them through retrenchment. In such a case, the employer has to pay off the amounts that are due to the employ - ees upon their termination or wilful resignation from the company. cess are provided in the Labour Laws. 10.2 Employee Compensation During the acquisition, if any disputes are raised regarding the payment of employees, then both the previous and new employers are required to consult with the trade union in relation to such payment.
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